Identifying activities that add value from the customers' perspective Consider Exhibit 2-7, which summarizes the activities at Bethlehem Steel Corporation's Sparrows Point plant. The blast furnaces make the iron that is refined into steel. The basic oxygen furnaces and open-hearth furnaces refine the iron into steel" The mix of iron, scrap, and alloys used to make the steel and the characteristics of the furnace determine the steel's properties, which include formability, strength, toughness, hardenability, and corrosion resistance. The continuous slab caster uses the steel from the basic oxygen furnace to make slabs of steel. The steel from the open-hearth furnace is poured into ingot molds for cooling.

When it has cooled and hardened, the steel ingot, weighing between 11,000 and 80,000 pounds, is removed from the mold and stored. When re¬ quired, the ingots are reheated and moved to the blooming or slabbing mills, which transform the ingots into blooms (square or rectangular shape) or slabs (wide and flat shape), depending on the final product that the ingot will be used to make. This operation also improves the properties of the steel. The billet mill reduces blooms into 4-inch square billets that are shipped to the rod mill, which produces coils of rod that are then transformed into finished items such as wire. Plates are rolled from reheated slabs in the plate mill. The plates must be cut on all sides to the desired dimensions after rolling. Slabs are also used to make strip steel, which is either made into some final prod¬ ucts directly or is subjected to finishing operations to make steel sheet or tin¬ plate.

REQUIRED

(a) What do you think is critical to the customer in making a steel purchasing decision?

(b) Do you see any activities in this process that do not add value from the customer's perspective?

(c) What might be the critical performance indicators in this process?

LO 1, 3, 4