Abstract
The case introduces Cleveland Cliff, a company engaged in the production of direct reduced iron since 1992. Cliff’s main client were the Mini-mills, operating in the North American markets. In which, Ed Dowling was appointed as its executive vice president of operations and Steve Elmquist was appointed as the general manager of the company. The case illustrates a situation, in which Ed and Steve are on a flight to Trinidadfrom Miami.They engage in the discussion,about the future of the direct reduced iron manufacturing plant. However, it can be evaluated from the case that, the company had engaged in a Joint venture with Luigi Metallurgy GmbH, a German process technology company. Cleveland Cliff lacked technical expertise.Due to which, they established a joint venture with GmbH, after considering various other options. In which, each company produced Direct Reduced Iron, using different processessuch as, Voest-Alpine employed the use of FINMET technology for the production of DRI, while other company option produced DRI using different techniques. It was determined after analyzing the techniques that, the Circored technology employed by GmbH,was the best fit for Cleveland. Which, in turn, would enable them to produce high quality direct reduced iron, using the Circored technique. In which, the Iron Ore was passed through seven process steps, from Pre-heating to Briquetting. While the iron ore introduced initially facing significant mass and yield reductions in its processing steps. Which significantly increase the costs of producing the direct reduced iron in its production facility. Therefore, it can be determined that, the company need to significantly reduce the costs associated with its production process.To decrease the cost of production, lower than the selling price of per ton or DRI in the market, due to the economic downturn.
Pumping Iron at Cliffs & Associates Harvard Case Solution & Analysis
Introduction
Cleveland Cliff was established and engaged in the manufacture of direct reduced iron, which was considered to be an integral part of the steel manufacturing industries or Mini-mills. Initially the Iron used in the manufacture of steel was of substandard quality. However, due to the change in demand of Mini-Mills, the target clients of Cleveland Cliff’s had employed the use of high quality iron, with minimal contamination or DRI. Which, in turn, had compel the company to establish a joint venture with GmbH, using their expertise in Circored techniques for the production of DRI. Which would enable the organization, to fulfill the demands of its target clients (Mini-mills).By allowing them to manufacture high quality steel products. Using the high quality DRI, produced by incorporating the Circored technique. Furthermore, the location for the production facilities was Trinidad, which was chosen from a two different location Including U.S and Venezuela. In which, it was estimated that, establishing a production facility in the U.S would be very expensive.Due to the fact that, the company would have to bring gas and iron ore together. Venezuela was estimated as a risky Foreign Direct Investment, due to the political unrest within the country. Hence, Trinidad was the best option available to Cliff, both abundant in natural gas and iron ore resources..........
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