Piyush Mehta, the son of the owner of Pramanik Containers, has identified inefficiencies in the company's inventory management and printing plate organization upon starting work there. There is a bottleneck in the printing process despite excess fabrication capacity. Piyush proposes separating plates by regular and non-regular customers as a short-term solution and implementing an ERP system as a long-term solution to fully address the issues.
Original Description:
Case Analysis & Situation Analysis
Original Title
PRAMANIK CONTAINERS AND THE BOTTLENECK CHALLENGE (A)
Piyush Mehta, the son of the owner of Pramanik Containers, has identified inefficiencies in the company's inventory management and printing plate organization upon starting work there. There is a bottleneck in the printing process despite excess fabrication capacity. Piyush proposes separating plates by regular and non-regular customers as a short-term solution and implementing an ERP system as a long-term solution to fully address the issues.
Piyush Mehta, the son of the owner of Pramanik Containers, has identified inefficiencies in the company's inventory management and printing plate organization upon starting work there. There is a bottleneck in the printing process despite excess fabrication capacity. Piyush proposes separating plates by regular and non-regular customers as a short-term solution and implementing an ERP system as a long-term solution to fully address the issues.
Case Analysis Report On PRAMANIK CONTAINERS AND THE BOTTLENECK CHALLENGE (A)
Submitted by
Name: Jayant Kushwaha Roll No: 141119 Section: A Institute of Management, Nirma University Date of Submission: 16 th Aug 2014
For Office Use: Grade
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EXECUTI VE SUMMARY: Pramanik Containers Pvt. Ltd. is an aerosol manufacturing company which does business in B2B selling. Started as family business by Bansilal in 1977, it will now be succeeded by Piyush Mehta, only son of Bansilal Mehta. Piyush has just completed his MBA and is very keen to work with his father. But when he sees the mismanagement of inventory and casualness among the workers, he gets quite baffled. As an MBA graduate, he convinces his father to let him work on this chaos. He comes out with two solutions, one short term and one long term solution.
Word Count: 097
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SI TUATI ONAL ANALYSI S: Pramanik Containers Pvt. Ltd., an aerosol manufacturing company which mainly dealt in B2B selling was a leading vendor of ABC Pharma, a large multinational company. Started by Bansilal in 1977 as family business, is now a well-established company with annual sales turnover of 315 million. The core manufacturing process of aerosols, which was a high speed, high volume process can be broadly divided into two stages; making customized aerosol cans and then decorating these cans. Aerosols were mostly used by cosmetics, perfume & pharma companies but due to the vagaries of the market; these companies were forced to outsource the small runs to vendors like Pramanik. So Pramanik modified itself with time and produced wide variety of products for different product segment. Piyush Mehta, only son of Bansilal Mehta has just completed his MBA and is very keen to work with his father. But on the very first day he has some bad experience. He came to know that, though there customer are satisfied, there are many areas for improvement like record keeping, inventory management and discipline & efficiency of employees. They had fabrication capacity of 48,000 units per 8 hour shift and printing capacity of 1,44,000 units per 8 hour shift which is equivalent to one days i.e. 3 shifts fabrication capacity. Having such high manufacturing capacity, they still produced only 30,000 designed plates. Every day they got 60 orders, out of which 80% of orders were placed by regular clients. Still every month 6-7 orders used to become emergency orders because their printing plate was not found earlier and now new duplicate plates has to be made costing Rs.7,000 each plate. Also, this mismanagement and no proper arrangement of plates lead to wastage to time, space and money. Aware of all these problems & situations in the plant, Bansilal has not taken any action because of his conventional way of doing business. Also to save taxes, Bansilal have not shown profits since 1980. Over dependency on his employees has also affected their efficiency and discipline, especially that of Shankar, the head printer. After his evaluation, Piyush discussed the matter with his father but all in vain. Bansilal is not that open to new ideas of Piyush as he considers them fancy theories which make no sense.
PROBLEM STATEMENT: Inefficient printing plates management.
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OBJ ECTI VES: In order of their importance 1. Work efficiently 2. Maintaining or improving quality 3. Bringing down the total manufacturing cost 4. Grow business and to be in top 100 companies of India 5. Gaining control over employees.
OPTI ONS: i) Excel Sheet could be used in place of registers, one excel sheet for each company with their code and printing plates information. ii) Separating the plates of regular clients and other clients. iii) Disposing off plates of non-regular clients whose chances of giving order again are very less. iv) ERP System
EVALUATI ON OF OPTI ONS: 1. Excel workbook would reduce the cost of registers, will save time and avoid confusion and time required to find a plate. But we need an expert to handle that. 2. Separating the plates will make it easier to find plates as 80% of orders are from these 15 regular clients. But this separation will take a lot of time. Also out of every 60 orders of day, 30 require new plate designs. 3. This will save the space and the confusion as no extra plate will be there. But sorting out the plates of non-regular customers can be time consuming and confusing in itself as we cant be sure of companies that whether they will place an order in future or not. 4. All in one ERP system is the absolute solution but the only problem with it is the huge amount of investment which company cannot afford presently.
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RECOMMENDATI ON: Short Term: Short term decision can be separating the plates according to usage i.e. plates of regular customers and plates of non-regular customers. Long Term: All in one ERP system is the only solution for long term. Company should start saving funds for that.
ACTI ON PLAN: Company should make sure that theres no time killing during working hours. Try to reduce total manufacturing cost. Start keeping the plates of regular clients in separate place as they will be less in number. Whenever an order comes from regular client, after using plate keep it in separate place. Also start saving money for the ultimate solution, the ERP system.
CONTI NGENCY PLAN: If Bansilal rejects the above solution, then use of excel files for keeping record instead of using registers can be considered.
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Report Exhibit 1: Fabrication Capacity = No. of cans made per minute*60(for one hour)*No. of hours in a shift*No. of shifts*No. of Machines = 25*60*8*3*4 = 144000 Printing Capacity = No. of cans printed per minute*60(for one hour)*No. of hours in a shift*No. of shifts = 300*60*8*3 = 432000 So, it shows our printing capacity is thrice of our fabrication capacity. So it can complete a days work in 1 shift. Page 7 of 7
UNDERTAKI NG: To Whom It May Concern: I, Jayant Kushwaha, hereby declare that this assignment is my original work and is not copied from anyone/anywhere. If found similar with sources, I shall take complete responsibility of action taken thereof by, WAC team.
Signature NAME: Jayant Kushwaha ROLL NO: 141119 SECTION: A