TheCrompton Greaves Operations Overhaul_final.ppt

• Crompton Greaves Ltd (CGL), owned by Avanta Group, L.M Thapar as the CEO.

• Leaders in Electrical Engg components like transformers, switch gear, control

equipments, motors.

• In 1948, L.M Thapar group, Greaves Cotton & Co Ltd, acquired 26 % stakes in

UK based Crompton Parkinson Ltd, which Later increased to 50% in 1956.

• In 1966, Greaves Cotton & Co Ltd and Crompton Parkinson Ltd entered a joint

venture to form Crompton Greaves Ltd.

• Manufactured Ceiling fans and AC industrial Motors during its initial phase.

• In 1987, CGL entered telecommunication and industrial electronics arena.

• Today the company’s revenue accounts US$850 million and operates in 90

countries

With Recession down the corner(1982) and the company running into looses before hand, a desperate need to relook into its manufacturing and marketing approach was realised.

Major revamping was done through out the plant to regain the lost market share and beyond.

Falling Demand due to Recession Higher Production Capacity and Employment levels-

Declining Productivity European Model of Planning High Rejection Rate Process Layout Large amount of Inventory Carried High Work-In-Process inventory

Company’s Presence only in low margin businesses Low pricing power Lack of technology support Low investment in R&D

Step 1: Creation of Cross-functional task forces to identify and solve problems on shop floor.

Step 2: ‘Value added management’ approach under TQM.

Step 3: 21000 Kaizens during 1993-1995,the highest number in the country.

Step 4: Concept of Single Piece Flow (SPF) or Cellular Technology.

Step 5: Layout changes and emphasis on housekeeping to make the unit more efficient.

Step 6: Improvisation of SMED (Single minute Exchange of Die) to reduce set-up times and faster changeovers.

Inventory carried period declined from 2.87 months in 1992-93 to 2.35 months in 1994-95.

Inventory turnover ratio up from 2 in 1992 to 7.5 in 1995.

Productivity went up from Rs 6 lakhs per man per year to 12 lakhs.

Managerial efficiency also went up from 23% to 51%. CGL turnover crossed 1000 crores and profits

increased six times. Time spent on employee training also went up from 1%

to 3%.

Quality improvement and meeting customer demands Shop floor workers gathered customer inputs Cross functional task force Single piece flow(SPF) Computerized model for inventory control House keeping Equipment placement

Flow of work in Anti-clockwise Single product in single cell Wastage reduction & better inventory control production retained Space utilization reduced by 75% SPF analyzed bottlenecks and problems Kanban system implementation (for example red bulb-

no material or no order & yellow bulb- basket was full).

What is “value added?”

If you are considering a value-added enterprise, there are two key questions to answer:

1) What attributes of your product does the customer value? 2) What creates a value-added product?

What creates added value?

Quality Functionality Form Place Time Ease of possession

CGL worked on the housekeeping front as well to make the unit more efficient. Following are the ways to improve efficiency:-

Material was organized so no searching was required. All of the items were allocated a place, close to where

it was used, with the date and inspection status marked on it.

The layout was changed so that minimum transport was required.

Visual Control implemented like pipe in different colors were put up so that problem lines could be easily identified , ‘Andon’ devices were installed on automatic lines to warn of faults.

Detailed instruction in both English and the local language Marathi were put up.

Chart displaying the cost of energy per machine per hour were put up to reduce energy wastage.

A malfunctioning magnetic sensor was fixed for just Rs 440.