Crompton Greaves' Operation Overhaul

Crompton Greaves’ Operation
Overhaul
By: Jude Abreo (81), Ketan Mokal (82) ,Mridu Sharma (83)
Namish Sharma (84), Namrata Kumar (85), Nikhil Nagdeote (86)
POST
1937 - 66 1970 - 85
1986
 100% subsidiary of the UK based CPL, under the name of

PWL.
 GCCL acquired a 26% stake, which was later increased to
50% in 1956.
 A joint venture company between GCCL & CPL was
amalgamated with PWL
POST
1937 - 66 1970 - 85
1986
 Conversion from single location limited product manufacturing

company into a multi location multi product manufacturing
company.
 Entered into technical collaboration agreements.
 Experience of all time low profitability.
 Conversion of seller's market into a buyer's market .
 Declining in productivity
POST
1937 - 66 1970 - 85
1986
 Entrance in the telecommunications and industrial electronics

sector.
 Undertook turnkey engineering projects
 Began providing information technology services.
Timeline Operations Marketing Finance IT Systems HR External
Falling demand, Change from seller's Market
higher production market to buyers Gripped By
capacity and higher market Recession
employment
resulted in declining
productivity
1982-84
Raw material (steel) Marketing searched
storage time was for production orders
147 days although based on the
the processing time planning department
was 1-48 hours optimum load
calculations
Competition with Low Fast information Negotiations Low entry
unorganized sector margins delivery/sharing intra with labor barrier to
and low and inter company is unions for motor and
pricing missing; rectified productivity consumer
power with the use of increase of electronics
infotech systems to 38% in 1991 manufacturing
1990-95
vendors also. and 20% in
1994
High competition from
MNC's in telecom
equipment
manufacturing
Production Net
capacities not losses
consolidated reported
2000 Only 1.5%
onwards of
turnover
Measures taken at Nashik Plant
 Shop Floor workers sent to visit customers for first hand
responses.
 Cross functional team (CFT) formed to minimize

rejections & deliveries.
 Value added management approach.
 During 1993-95, unit had more than 21000 Kaizens,

making it highest number of kaizens in the country.
 Single Piece Flow(SPF).
 Arranging machines in anticlockwise, ‘U’-Shape.
 This concept was combined with kitting to reduce wastage
and better inventory control.
 Inventory carried decline to 2.35 months(1994-95) from
2.87 months(1992-93).
 Inventory turnover ratio was improved due to Computerized
model.
 Improved housekeeping and material organizing.
 Layout was changed to minimize transport.
 None of the, machines were grounded, which meant
layout can be change easily.
 Detailed instructions both in English & Marathi were
displayed at various spots.
 To reduce energy wastage various cost of energy per
machine per hour charts were displayed.
Single Piece Flow (SPF)
For Example
If there was No Material or No order, a

red bulb lit up; Similarly basket was full
,a yellow bulb lit up.
Due to this efficiency improved by 10 %

CFT Initiatives
For Example
A malfunctioning in magnetic
sensor which cost Rs.80,000 and
take six week to import was
fixed in just Rs.440.
It was set right by local

manufacturer within two days.
Andon Devices
For Example
Any fault in insulation of

copper wire resulted in a
signal from the andon
device.
Pipe Colour Coding
Color Coded Dies & Fixtures
Improvements(1990-95)
 Turnover doubled – more than 1000 crore
 Productivity – 12 Lakh/man/yr from 6 Lakh/man per yr
 Profits increased by six times.
 Managerial efficiency improved from 23% to 51%.
 Manpower requirement reduced by 30 %

 With job security union assured productivity increase of 38%
in 1991, and further 20% in 1994.
Improvements(1990-95)
 Employee training- 3% from 1%
 Skilled workers contributed to routine task at the same time they
were given authority .
 With same production volume

 Space required reduced to 1/4th
 Turnover /Rotation of space increased 3 times
 Small batches offer more flexibility & higher customization

 Inventory turnover – 2 (1992) to 7.5(1995)
Down again
 Entry barriers were low
 Domestic market was dominated by unorganized players
 Telecomm market – high competition
 CGL reported net losses in the fiscal 2000
 Low investment 1.5 % of the turnover on R & D

Activities in late 1990s
Plans to split in three companies
 Power and Industrial
 Transformers, Switchgears, Circuit breakers, HT and LT motors, Alternators etc
 Spread its root in India, Belgium, Ireland, Canada, USA, Ireland, Indonesia and
Hungry
 Consumer Products
 Fans, Light Sources, Pumps, Geysers, Mixers etc.
 Digital
 Telecom Service Providers both govt. and private
Procedural delays led to plan being deferred
Activities in 2000
 CGL setup 5 member committee to review its operation
 Sudhir Tehran was the head of this committee, taken over

from Nohria as CEO in 2000
 Focus on lessening Cost (First Phase)

 Consolidation of production capacities at factories
 Closing down some Corporate Offices
 Shifting of offices
 Reducing Employee Strength

Major Acquisitions(Second Phase)
• Pauwels Group of Belgium in May 2005
 Strong market Presence
 excellent list of satisfied global clients
 Transformed Indian leading entity to global leader
• Ganz Transelektro and its Associate Company Transverticum

in Hungary, in October 2006
• The acquisition of Microsol Holdings Limited, Ireland, in May

2007
Third Phase
 Synergising Operations
 Integrate its resources involved in R&D, manufacturing
and marketing
 Benefiting from Order Backlog

 To capitalise on Pauwels’ large order backlog
 Transforming from Products Company
to Solutions Company
Historical Scenario of Net Sales
80000
70000
60000
Rs. In Mn.
50000
40000 Net Sales

30000
20000
10000
0
2000 2001 2002 2005 2006 2012 2013
Years
Historical Scenario of EBIDTA & PAT
8000
7000
6000
5000
Rs. In Mn.
4000
3000 EBIDTA
PAT
2000
1000
0
-1000
-2000
2000 2001 2002 2005 2006 2012 2013
Years
Awards and Achievements:
 Received Golden Peacock Innovative Product /
Service Award-2007.
 Crompton Greaves bags CII-EXIM Bank award for

excellence,2010
 CG wins three contracts from PGCIL valued at Rs

231.7 Crore.
 CG wins Wind Onshore Projects in France

Thank You

Crompton Greaves' Operation Overhaul

Uploaded by

Copyright:

Available Formats

Crompton Greaves' Operation Overhaul

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Crompton Greaves' Operation Overhaul

Uploaded by

Copyright:

Available Formats

Crompton Greaves’ Operation

 100% subsidiary of the UK based CPL, under the name of

 Conversion from single location limited product manufacturing

 Entrance in the telecommunications and industrial electronics

 Cross functional team (CFT) formed to minimize

 Value added management approach.

 During 1993-95, unit had more than 21000 Kaizens,

If there was No Material or No order, a

Due to this efficiency improved by 10 %

It was set right by local

Any fault in insulation of

 Productivity – 12 Lakh/man/yr from 6 Lakh/man per yr

 Profits increased by six times.

 Managerial efficiency improved from 23% to 51%.

 Manpower requirement reduced by 30 %

 With same production volume

 Small batches offer more flexibility & higher customization

 Domestic market was dominated by unorganized players

 Telecomm market – high competition

 CGL reported net losses in the fiscal 2000

 Low investment 1.5 % of the turnover on R & D

 CGL setup 5 member committee to review its operation

 Sudhir Tehran was the head of this committee, taken over

 Focus on lessening Cost (First Phase)

 Closing down some Corporate Offices

 Reducing Employee Strength

 excellent list of satisfied global clients

 Transformed Indian leading entity to global leader

• Ganz Transelektro and its Associate Company Transverticum

• The acquisition of Microsol Holdings Limited, Ireland, in May

 Benefiting from Order Backlog

 Transforming from Products Company

40000 Net Sales

 Crompton Greaves bags CII-EXIM Bank award for

 CG wins three contracts from PGCIL valued at Rs

 CG wins Wind Onshore Projects in France

You might also like