The Grey Chronicles

2008.September.10

Recommendations for Future NSC: Strengths


NSC’s strength came from its well-trained professional technical and managerial personnel; adherence to world- class standards and production methods; comparable “state-of-the-art” high-tech facilities and equipment; favorable customers’ reception; and its proximity to ASEAN and Asian markets.

S1. Well-trained Personnel: NSC’s claim to fame during the 1990s was its well-trained personnel. Training, seminars, and workshops, including continuing educational modules, were foremost in NSC’s Human Resource development agenda. Most of its engineers and other technical personnel underwent foreign trainings in the United States, Japan and other countries. Most managerial and supervisory personnel have undergone the Industrial Engineering and the Engineering Management Training programs in 1980s and 1990s, respectively. In addition, managers were afforded access to Asian Institute of Management courses to augment their baccalaureate degrees (San Pedro, 1994).

On one hand, with GSII tapping these ex-NSC employees from the different phases of its corporate existence, some from the pre-privatized NSC but mostly from the Wing Tiek-Hottick era, the same competency and adeptness can be achieved through re-training and enrichment. With the reintroduction of Total Productive Maintenance (TPM) and 5-S, which initially came to NSC’s consciousness in 1993, high mill availability and reduced maintenance costs are definitely assured.

On the other hand, while GSPI’s rehired ex-NSC employees were well trained, these same employees are now older and aging. Based on the survey of the list of retrenched employees in 1999, the average age of most employees when NSC ceased operations was in their early 40s with an average length of service of about 12-15 years. Mosner and Craig (2003) emphasized the value of retaining experienced and capable—yet aging—employees, versus the significant costs of employee turnover. Retention, Mosner and Craig continued, “will slow this exodus from the workforce and the knowledge and talent drain while maximizing older workers’ productivity.” For GSPI, however, dealing with older and aging technical personnel and skilled crew could pose a two-prong future corporate financial problem. Retention requires the acquisition of accessible and assistive technology, while retirement obliges GSPI the disbursement of retirees’ benefits.

S2. Adherence to World Standards and Production Methods: Prior to its shutdown, NSC was a Bureau Veritas Quality International (BVQI) ISO9002:1994-certified company specifically ETL3, Cold Strip Mill and Billet Steelmaking Plant. Only Hot Strip Mills certification was unrealized because of economic constraints. Internal Quality Auditors have been trained to check continually the certified mills compliance to ISO9002:1994 systems. Product quality has been maintained at highest standards possible adhering to the Philippine National Standard (PNS), Japan Industrial Standard (JIS) and Deutsche Internationale Normen (DIN). NSC products were granted the Philippine Standards (PS) mark in 1992. Back when Kaizen was still a novelty, NSC supervisory and rank-and-file personnel have been active participants since 1986 of Productivity Improvement Program for Operating Lines (PIPOL). PIPOL (Sinangote, 1993) was NSC’s comprehensive program of quality circles comprised of personnel from different departments, such as, operations, quality assurance, mechanical and electrical maintenance, roll shop and utilities dealing with team projects ranging from productivity and quality improvement; to delay, cost and defect reduction. Thus, each of them have put to heart the concept of quality work, quality product and quality process.

S3. “State-of-the-Art” High-tech facilities: NSC facilities were at par, if not more advanced, with other international steel mills. Most of the installed equipment was supplied by original equipment manufacturers with constant consultation with USX Engineers, Kawasaki and Nippon Steel experts. Most process-computer systems are new, and vintage electronic systems have been upgraded to suit new applications (Hatch, 1996). Maintenance of these facilities is paramount to the continued efficient and effective quality operations of the mill and process lines, without which could derail customer relations because of unrealized production, thus translated to delayed deliveries.

S4. Favorable Customers Reception: NSC enjoyed a good reputation among customers. Complaints were relatively at a minimum and were promptly attended to by a Customer Service Department plus the fact that recurring ones were treated with all the help—technical or otherwise—from all concerned parties, e.g. operations, quality assurance, maintenance, support, research and development (NSC News, May 1995).

Based on this study, even during the privatized NSC phase, mean number of complaints were at a meager two (2%) of the total sales, when NSC were selling almost 30 to 35,000 metric tons per month. Although this is not the best, compared to GSPI’s Six-Sigma quest, back then this was a feat not to be looked down. Hearing the prospective resumption of NSC’s operation in 2004, many NSC customers, especially those that were then led by ex-NSC employees, such as the former Executive Vice President for Cold Strip Mills, sent words to adopt GSPI as their primary supplier of their steel requirements. Their affinity to NSC came from the long-held belief that the resurrected plant would supply them quality products once supplied by NSC before.

This is better explained by the former Customer Service Department head, in an interview (NSC News, May 1995), who described NSC’s relationship with its customers as one of transparent, open reciprocity—“a mutual exchange of goodwill with a healthy awareness of each other’s capabilities and limitations while resolutely upholding the interest of both.”

S5. Proximity to ASEAN and Asian markets: Competitively located at the heart of the ASEAN markets, NSC’s geographical location can supply products by sea routes promptly. Iligan to Manila is about 525 nautical miles. From Manila, most ASEAN and Asian countries are accessible.


Notes:

San Pedro, Angelo A. (1994) “It Was Twenty Years Ago Today . . . ,” NSC News, XIX: 2, Makati: Corporate Communications, NSC, 28 February 1994. pp. 4-5. back to text

Mosner, Ellen and Craig Spiezle (2003), The Convergence of the Aging Workforce And Accessible Technology: The implications for commerce, business and policy. USA: Microsoft Corp. and AgeLight Marketing Consultancy, July 2003. p. 16. back to text

Sinangote, Nards (1993), “Total Quality Management: Is National Steel ready for it?” NSC News, XVIII: 2, Makati: Corporate Communications, NSC, 28 February 1993. pp. 8-9. back to text

Hatch Associates Ltd. (1996), “National Steel Corporation–Philippines: Benchmarking, Optimization, and Overview of Materials Management Policies,” Final Report PR 64624.001, 14 June 1996, p. 15-16. back to text

Balali, Macky (ed.) (1995), “Settling Customer Complaints.” NSC News, XX: 5, Makati: Corporate Communications, NSC, May, 1995. pp. 5 – 7. back to text

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