Organisation Review for an Automobile Castings Company
The client, an auto castings company, did not have clearly defined visions and values. It had poor profitability of and an under-utilisation of capacity due to high downtime at a retail store (bottleneck). There were high rates of rejection for its products as compared to the industry standard. They had high inventory levels due to non-moving inventory and an absence of stocking norms. Other problems were a lack of clarity regarding job responsibilities across the company, low morale of employees and a lack of information systems.
UC reviewed the organisation and submitted a report with observations and recommendations, after taking the following steps:
- Defined the visions and values for the company. Translated the vision by setting targets for each business process
- Restructured the organisation around focused work-centres
- Identified the key bottlenecks and improved the capacity utilisation through set up time and maintenance downtime reduction
- Defined stocking norms for critical raw materials
- Redefined systems and procedures for the stores and purchase departments
- Developed a maintenance system with preventive maintenance schedules
- Defined consumption norms for spares and consumables
- Defined the organisation structure, job descriptions and performance evaluation systems
- Prepared the increment system based on the performance evaluation system
- Prepared a management information systems report.
Following UC’s recommendations the client improved their profitability from 3.82% to 21.4 % in a year. They also increased their capacity utilisation by 14.94 % and reduced setup time at the Shell core shop and market rejections.