Cases

Diagnostic Review for a Chemical Manufacturing Company

Challenge

The client, a chemical manufacturing company located in Gujarat, was one of the oldest manufacturers of soda ash in the country. It faced intense competition from end consumers like detergent manufacturers that integrated backwards to manufacture soda ash. This resulted in low profitability for the client. In order to improve profitability, top management wanted to identify and evaluate the capital investments to be made. They also wanted to identify the initiatives to be taken for improving operating profit.

Our Approach 

To develop the diagnostic review for the client, UC adopted the following approach:

  • Studied plant operations in detail

    1) Plant layout

    2) Work centers operations

    3) Preventive maintenance

    4) Raw material logistics

    5) Inventory Management

    Raw Material

    Packaging Material

    Stores and Spares

    6) Raw material quality analysis

  • Designed inventory norms for raw material, packaging material and stores & spares
  • Redesigned preventive maintenance tasks and schedules
  • Conducted bottleneck analysis of work stations and defined investment plans to de-bottleneck the plant
  • Identified potential savings in

    1) Inventory management

    2) De-bottleneck work center

    3) Productivity improvement

  • The Marketing Strategy included analysis & recommendations in the following areas:

Impact

The client gained a better appreciation of the competitive forces at play within the industry and threats from different entities in the value chain and a plan to tackle these threats. Further, after diagnostic review of the client’s operational processes, UC provided the client with measures to improve efficiency and save costs. The savings from these measures was in the region of Rs. 1 crore.