Prepared by Group 7

Introduction to Chaparral Steel

Founded in 1973 in Texas as a JV Texas Industries and

Co-Steel International Ltd Texas Industries bought out Co-Steels share of Chaparral in 1985 20% of Chaparral is offered in a public offering in 1988 in which over 95% of Chaparral employees became shareholders A small player out to break all the rules in an industry dominated by huge giants Highly skilled management

HR Practices at Chaparral
They hired mostly enthusiastic farmworkers with no

background in steel as shop-floor workers Mgmt. stressed on Individual Growth and Teamwork and created a very conducive environment to attract and retain talent Employees at all level were continuously undergoing training and development programs on and off the job Healthy job rotation also helped maximize exposure and learning Only 3 layers between CEO and shop-floor employee

Ownership Among Employees

Employees showed high level of ownership and would

be ready to play any role that the company demanded, whether it was in their area or not Even Shop-floor Employees carried business cards reading member of the sales force and visited customer sites Supervisors were rendered unnecessary and teams became self-managed so that the supervisors could be allocated elsewhere when needed Employees: We want to do the best we possibly can

High Productivity and Quality

Among minimills, Chaparral already had the record

for best productivity, using only 1.8 labor hours per ton By 1990, it set a new record of 1.4 labor hours per ton, as compared to the national average of 2.2 for minimills and 4.6 of the bigger integrated mills Its quality was also equally good. Chaparral was the 1st American company and 2nd company outside Japan to get the Japanese Industrial Standard Certification, award to companies with consistent high quality.

Innovation at Chaparral
Despite not having a separate R&D department,

Chaparral was highly innovative and had cutting edge, state-of-the-art technology Huge amounts were invested on R&D, to the shock of suppliers The whole factory was an R&D center and every employee was a research scientist Innovation was made a routine activity, and was kept alive by the freedom to perform and fail