Caselet 1

1. Did Kanchan and Company Limited adept the right strategy in

improving the overall performance of the organization?
Ans: No, Kanchan and Company Limited did not adept the right strategy
in improving the overall performance of the organization as there were
still a number of problems which are as follows:
i. The organization had reduced the raw material and the finished
goods inventories but still it was on the higher side.
ii. Process improvements had been carried out only in parts because
of high investment requirements.
iii. The workers were apprehensive and suspicious about the way the
CPIS was introduced.
iv. The organization had not done the cost benefit analysis of the
changes they had made.
v. Tools and die replacement time had been considerably reduced but
still needed improvement.
vi. Synchronized manufacturing system had been introduced only in a
few parts of the manufacturing unit.
vii. To cater the changing demand, the organization had assigned
higher man power than required, leading to some idle man hours
during normal demand periods.
viii. Power supply constraints forced the company to use the age old
method of manufacturing instead of the technology.
 2. Was it right to use a complex system for determining the workers
incentives?
Ans: In order to calculate the daily earnings of the direct workers under
CPIS, following formula was developed.

ES = {(EQ1+EQ2+EA1+EA2+EC)*N/n}*{Aa/An}
Efforts for system Improvement

The workers were apprehensive and suspicious about the way the CPIS
was introduced. In earlier system, the workers carried out simple
functions based on the skills and scales were also fixed based on the type
of work carried by the workers, resulting in the disparity in the scales of
workers on the same product and having similar experience. Hence it
was not right to introduce a complex system for determining the workers
incentives as it made the workers to feel insecure.

3. If you were the head of the unit, what steps would you have taken
to remove the problems which were still persisting?
Ans: If I were the head of the unit, I would take the following measures:
i. Use a simple system for determining the workers incentives.
ii. Follow Just In Time(JIT) inventory concept so that the inventory is
not piled up
 iii. Will establish a better quality control system.
iv. Keep a close watch on market demand and ask the manufacturing
unit to work accordingly.
v. Make the workplace a more comfortable for the workers.

4. What should the company do to maintain and improve its market

position?
Ans: The company should relaunch itself it in a better way. It should
study all the factors for its poor performance in the past. When all the
reasons are noted down, it should work on these areas to improve them.
Workers should be taken into confidence and they should be motivated
and encouraged to work better. Wherever the production was lagging the
company should meet the market demand. It should use latest inventory
concepts such as Just In Time (JIT) to tackle its problem of piling of
inventory in some of the manufacturing units. A simple and easy method
should be used for determining the workers incentives.