Cases

A Diagnostic Review for the Manufacturer of Stainless Steel Products

Background and Challenge

The company had been incurring losses for a period of two years due to a recession in the steel industry and thanks to the imposition of a ban on exports, by the European Union. The company’s operating performance had been deteriorating for the previous six months. There was an increase in debt and rising interest / the PBIT ratio resulted in a shortage of working capital funds. There was high non-productive time on the shop floor.

The company had a lack of a formal planning process and system, a lack of clearly defined processes in procurement and order fulfillment, and no coordination between various locations. Job responsibilities across the organisation were unclear. There was low morale of employees across the organisation and no reporting relations in the organisation.

Approach and Recommendations

UC conducted a diagnostic review and identified improvement opportunities in the following areas:

  • Operations

    1) Identifying and de-bottlenecking in manufacturing

    2) Designing and implementing standard operating procedures for procurement, order management and dispatch processes

    3) Designing the planning cycle

    4) Organisation

    Designing and implementing organisation structure

    Defining job descriptions for key positions

     

  • Recommended operations initiatives

    1) Identified initiatives to reduce the non-productive time (reducing set up time, maintenance downtime etc.) which would result in increase in revenues by Rs. 10 Crore

    2) Implementation of the initiatives

  • Designed and initiated the implementation of the following processes -

    1) Procurement process

    2) Order management process

    3) Dispatch process

  • Designed a planning tool to ensure co-ordination and proper planning across locations
  • Designed and implemented the organisation structure and job descriptions

Results

UC delivered their diagnostic review and a number of areas the company can improve in.