Company 'x' has started operations in 1968. The company was quite successful in terms of profitability during pre modernization era. But at the end of License Raj, they have suffered a lot in order to manage multinational competitors and forced to go for manpower rationalization, improve quality and to introduce strategic pricing. Being a workforce intensive enterprise, people were the only distinct competitive advantage.
Like any other process based manufacturing company, attendance and shop floor discipline were critical deciding factors for the company to ensure optimum productivity and quality as per global standards. Being a company started in late 60's, bureaucracy coupled with power politics and resistance towards change was critical problems for the company.
They have got 5 shop floors with manpower ranging from 100 to 300 for each and have deployed around 20-25 people exclusively for managing manpower allocation to shifts, change shift timings, monitor attendance (swipes), process leaves and to manage time office. Personnel Department was just acting as coordination wing for certain employee activities and there was no reasonable budget allocation for training department. Performance tracking systems were not in place and still following once a year confidential reports for appraisal.
The company had 3000 permanent employees and 500 contract workers. They have partly automated payroll, accounting processes, commercial processes and packing process.
Previous CEO of the firm had tried to automate the processes, decided to go for ERP but unfortunately the management team was not competent enough to either map the processes to the ERP software or define the process to make customizations. Finally the organization and dropped the project in mid way and lost almost 20 Lakhs. Then board has hired some new operational heads from top business schools to spearhead the organizational change process. That too failed and most of them suggested either closing down the operations or merging with MNCs to save face. Finally 5 out of 7 newly hired heads quit. The resultant impact on company was heavy...lost 60-75 Lakhs.
The quarter results were poor and the news spread across the company and senior people started submitting resignations. Their share price crumbled to the lowest in history.
Finally board decided to do one more experiment. But this time they have managed to get the expected results
1. Reduced manpower to 2500 (voluntary retirement, outsourcing and contract labor)
2. Revised productivity agreements (30% increase in production targets)
3. Reduced wastage from 20% to 4%
4. Signed MOU for productivity, salary revision and other employee benefits - Management & Employee Associations
5. Increased annual turnover from Rs.100 Crores to 150 Crores and profit from 7 Crores to 15 Crores
Sounds interesting? If you would like to know how? Please come back to the forum with your assumptions