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Overview
Crompton Greaves Ltd. (CGL), was one of India's leading
private sector electrical engineering companies. During
the 1980s, CGL was in dire straits with profitability at all
time lows. The then CEO, Kewal K.Nohria said, "In 1982
and 1983, industry in general and the electrical industry in
particular was gripped by recession, and the scenario
changed from a seller's market to a buyer's market.
Falling demand combined with higher production
capacity and employment levels resulted in declining
productivity during 1982-84 at Crompton Greaves,
Nohria decided to focus on total quality management to
improve CGL's performance.
The Nashik Unit Overhaul
Nohria began by talking about improving quality and
response to customer demands and improving delivery.
Shopfloor workers were sent to visit customers and get
first-hand responses on products. Cross-functional task
forces were created to look into rejections and deliveries
began to be monitored closely.
The most evident of the company's efforts were at the
switchgear unit in Nashik, Maharashtra. This 1400 worker
unit was one of CGL's heaviest investments, with the
worked on for 1-48 hours, but was kept in the factory for
as many as 147 days. Factory sources revealed that
though the investments in new machinery brought down
the working time by 50% from 48 to 24 hours, the
efficiency could further improve if the above problem was
tackled.CGL worked on the housekeeping front as well to
make the unit more efficient. Material was organized so
that no searching was required. All the items were
allocated a place, close to where it was used, with the date
and inspection status marked on it. The layout was
correspondingly changed so that minimum transport was
required. None of the machines were grounded, which
meant that layouts could be changed easily. Several
meters of pipe in different colors were put up so that
problem lines could be easily identified. Fixtures were
also colored according to the product they were used to
make. Detailed instructions in both English and the local
language Marathi were put up at various spots. Charts
displaying the cost of energy per machine per hour were
put up to reduce energy wastage.
Reaping Benefits
CGL's efforts seemed to have paid off initially as between
1990-95, CGL doubled its turnover crossing the Rs 1000
crore mark. Productivity went up from Rs 6 lakh per man
per year to Rs 12 lakh. Profits also increased by six times.
There was a 30% reduction in the total number of workers