Case Study 11 – Case Study for Delegation and ERP implemention

Company History: –

Company is in pharma-machine manufacturing. Running in Family manage business established in 1980. Started by Mr. Kirti Bhai Proprietor of the company with one machine having a very good market reputation and gradually increasing market share initially started with 5 peoples and grown to total 150 employee and increasing turnover from 1 Cr to 20 Cr Closing in the financial Year 2009-2010.

In 2009 is accompanied by his two sons and divided the duty of sales and manufacturing. Since 2009-10 company has diversified to other industry manufacturing like FMCG packaging machinery and also into other product agency business (indenting business)

The Scenario (Failure in growth plan and implementation of ERP) 

In 2008, Kirti bhai has observed that there is too much dependency on Pharma sector and decided to introduce new business vertical for manufacturing Packaging Machinery Manufacturing and also other indenting business also in the same year Mr. Kirti bhai  has decided to implement ERP specially designed for pharma machine manufacturing. From 2008 to 2009 company could not deploy the growth plan and implement ERP in spite of good ERP and adequate implementation time given by ERP consultant.

Root Cause:

  • The organization is family manage business there is no second layer.
  • The company was running on owner to operator delegation
  • Decision making and responsibility was over lapping among the management members.
  • Feasibility / Gap analysis was not carried out at the time of introducing ERP.
  • There was no hierarchy in the organization.
  • There was no clear purpose of introducing ERP
  • The Vision, Mission, Goal was set by the management but there was a gap in understanding how to deploy the same.
  • Process mapping was not done.
  • There was no succession plan available
  • All the major and minor decisions are taken from Kirti bhai.
  • There was no data analysis and actions are taken on incidents.

Implementation Solutions (Gap analysis, Business process restructuring, expansion, ERP Implementation) 

  • Gap analysis done
    1. Almost 3 to 4 session was taken with Management to understand the gap in the growth process for deployment of Vision, Mission, Goal.
      1. Discussed about introducing middle management and succession plan
    2. Discussed about management responsibility and authority
    3. Long term and short term goal set
    4. Department wise KPI decided
    5. Discussed about outcome of the ERP vis-a-vis management requirement / organization
  • Organization Structure prepared and roles and responsibility defined at each level.
  • Selection of middle management initiated
  • Simultaneously process mapping started
  • Gradually delegation to middle management started with weekly meeting with middle management and top
  • KPI for Each department Set
  • Regular meeting with individual department started to make them understand there department KPI and how to demonstrate the performance of their
  • Road Map to implement ERP decided and delegation done to various departments.

Outcome:

  • 5 departments introduced and established.
  • Accountability has brought thru MIS
  • Delegation power of middle management increased and due to that the information overload is reduced on top management.
  • Process mapping is done due to that ERP is implemented right from CRM to inventory management.
  • Culture of discipline is evident due to ERP implementation.
  • Confidence level of management enhanced to do more business in different verticals including JV with foreign Multi Nationals
  • Turnover increased from 20CR to 30CR with three additional business vertical
  • The Vision, Mission, Goal deployed
  • Data analyses improved due to this preventive action are evident

Future Action Plan:

  • Giving more delegation power to middle management.
  • Preparing SOPs and Flowchart of all process
  • Implementation of ERP in production and quality.


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