Case STUDY MOO SYNOPSIS “ rilok Roy tells me that he is havin to spend all his time listening to his subordinates rather than his customers. Santosh Chatuan tells me that, despite cycletimes improving, the number of orders.from our customers have been falling this year. Lopa Mudra telis me that our key industrial customers are warning us that they will soon start reducing the sizes of their orders. Murugan Swaminathan tells me that we will, therefore, have to close a shuftand lay off people. Amt Sud tells me that, with our suppliers are refusing to cut tieir lead umes, our procurement costs ave shooting up despite the fact that we have become more efficient ‘as a company: Each of them blames our TOM movement for all this although Govardhan Patel and Jagat Khurana stimply do not agree with them, [ean see that there is something radically wrong with the quality pro~ gram Why, andwhers have wegone rong? Can Ise itrigh? Orshould scrap the ToMfdrveattogether?.* Such were he thoughts permeating the min ‘mana C0 oth Re rity Pa teh had Been sucked info this conundnim ever since he had jomed the company three monihs ago RPG Enverprises' 116: Rew, Duncan Goenka’s PN. Singh, and Qunpro’s Suresh Lalla ty t pinpoint his quand. and provide some quality soltions.A BT Case Stay: NANTSESHACHAR-THEATYEAROLD CO OF | ECSSETSESTEBEAP ter tsening to me ao tive Pait Works (aon) took out a cheeks | themsaidtat they wouldbe reducing ter order ies Isthisa intron fs pocketonstnancous) looked at orioirlong he this wate, I! was 320 pam. minutes to-go for the meeting with Patel Consultants Ii faving oinedd Liberty nly three years ago as ils ¢t0, bbnef nates on his conversations with Lil nor execu tives uri te past few works Ce r ates Case Study by 8. Cuanpeasernas, Refereed bythe BUSINESS TODAY Pane of Referees The names ofthe 1 | compares and the persons desenbed in this case study hare Toeatea | ten changed in onder to protect their dents, ovalCASE STUDY ———— LIBERTY'S FINANCIALS f aa cae ee _ so ‘ollie eustomner raMisoniy fates tin in bneemetey ney Ete pas aera teed en eh rb : 1 pf believe in Tom,” said Seshachar. “But f = Vo eat Se I 8 set the tone by saying;”"Belore we get into details, let me tel 0 you my own understanding of tux and whi when woo B24 fac Sroplerretrd, To ane, it means one of three trends. Fest it alia (ere il HT | Secreto career ume ws eo SS “weeks tiie Sthpved lo 12 weeks one Br cur “suppli¢ns insist on the earlier lead times since their int-riis) "eloeatabatetvesy PASI ed rand addtieretdlneahoursoeosepe. HES BIG MEM Baselintke North. Our procurement Cogs wily up Rest Ter tt heer marfacing and marketing pls or a I cr ara. 3 cal aan rnkerin hen pans mrt perce as ace ermeenrene neuer Chena, were runing tan per ent epee len sl lt wasamong the ew pat compari tine ha ‘sands OV REISTTC ONT UUTIT EGRESS bes roe «whrtetrwasti stortsupply and thported by most companies. “Two years ago, Liberty—then headed by Rajeshwar Man- {gal—had commissioned Patel Consultantstoimplement at: programme. The decision had been triggered off by several fac tors. First, te industry structure waschanging, The demard for ‘ecorative points—once taxed heavily by the government the mistaken beliethat pants were luxuryitems—was picking upbecause ofa progressive eduction intheexcise duties. nd the entry of global players in the automobile and white goods | THE COMPETITIVENESS GAP (COMPETITIVENESS| GAP — Baseline (ateurent resourees) PERFORMANCE. Thereisnoneed forconcer here Allyoruneed indeiste c= -- itorthe variousindices closely.” “Second, it could be a case of relapse. This again y cr--- ng c Temeanstno,» nlees we mone in quickly rive ithe goad arate tee ‘come unstuck. And, third, there could be laws in the way ing implement ety In which case, we ir moorings i “Your anslysle—and the arras of concern that raised—just about sum up the roadblecks in implementin Tau.” said Patel "Wis, however, likely that the could be Nappenitig sil ens at tite MioloalD: {ceevaly all the problems relate to the concegs of Total Cpr = Time cen, whichis under implementation, rer, abies cated. Intervenred Khurana, “is only a partof ‘Tow. would help if you geta background of how it all started, Juhy don't you begin at the beginning” “rctis delined broadly iS own lime cycle. When you look at tas pat ols tan Movement, you stam examining each one of those cycles i detail In the process, you would recognise numerous “tr “Once you eliminat active sy isshortened. And when a reduction in time eyete pers: = ‘every singieactty, and becomes an integral par of your ope ations on a regular basis, you can respond to customer nee: ‘asterthan competitors. That becomes a formidable weapon v= ‘be corporate areal Business. then. becomes BIER niess process ir la series of disjointed functior 5” "Response time isa crtical element of competitiveness fr any business,” said Seshachar, “but perhaps its mote so fora paints business Yes," said Khurana. “AS you hoo the paints busigess is ‘capitabintensive. Net working Capsta represents Si percentolthe tunds employed. Tue main reasons "=3: produceanumberofchadesina rareryofeotour TH.sbicc! s a lige pam of ovrMmOneD It must. however. be said that tec» nology has been of great help here during the last few years irsiredofastandardshade-card,asinthecld days aco. + uter screen provider a raster pater contains prer S) shades, and you can actually see how the paint looks on OvaIiicu wit vainCase Stupy ISSN wall before deci Cotour, ngto buy itJuxay,acustomercan have ny ny shade of his cuoicomnMeapone Medes "> cmnived at by mixing a base colour—usually, white—with appropriate strainers in an autoinatic machine This automat cally eliminates the need to stock premixed colour shades wif Me deaters which, i any case, may not get sold All one speeds to do is maintain a sock of only the base colour. While ‘hrs cutsinventory-catrying costs, the problem of high workius ‘capital remains See one has to stock a vast range of pigments lepmoduceastuide required by thecustomer * “Besides. the manulacture of paints involves arountl 1”) illreht epesofme tert sTOMMSGT To Soper ceatotihe ‘cost of sales. Lis thus commion to see 25 per cent of the sales Blocked in raw material nventoriesalone Moreover, wesell our «lrofative pants brands through 13,000 dealers who need to ‘workover I50shades:Asa result, the speed af delivery and pr SSB prrR Renee Cemtraro our commercial success ‘That's what makes the conceptof creritcal to our operations Fine. How did you go about i?” asked Seshachar, | ‘We carved up operations at Liberty into three broad time ‘xcles:the Make-Market Cycle, Design-Development Cycle, and _THE MAKE-MARKET CYCLE THE MAKE-MARKET CYCLE Strategic Thrust Cycle (IHG MSREMSREICEIEESIEND com. ‘ete operaung business cycle fromthetimeacustomerreqacsts “quotation untilthereceivablesare collected. Ithasseveralsu's, ‘cles like customer service and cashflow, each with is own "iimerous minkeyeles such as order entry, forecasting, mar. ‘cturing, purchasing. warehousing shipping The Lesign-Development Cycle covers the entire process {ieveloping new combinations of paints—from identifying {he market needs to the realisation of costetfoctive proviue, jan At the Stategic Thrust Cyele coversactvities from sit Deg Rew business opportunity to the stage when the Design, gest Bang for the buck i the Make Market Cycle, ‘ond dramatic. in fact, TL @ Prerequisite to acting upon the athertae, race dearer antough westaredfocusingon rin vany1006, Pot banalteMake-MarketCycleat Liberty. Andtheimpact Sot beginning be felt Bu the real impact on corps | oe OOO READINGS Better Designs Half The Time, King ‘Business Process Improvement, /H{ Harringion Productive Workplaces, Af. Wersbord The Mind O The Strategist, Kenichi Ohmae The Purposing Of High Performance Systems,’ Vall 1 Practical Strategic TQM For Middle Mgmt, A lehukow Five Pillars OFTQM, Creech 1A Revolution In Manufacturing, Shingo The World OF W. Edwards Deming, CS Kilian Winning With Quality, 11 fHudhberg 1 Japanese Manufacturing Tect ues, RJ Schonberger M Breakthrough Thinking, G Nadler S Hibino M Introduction To Quality, G fluchins Total Quality Management, Joh Oakland Toyota Production System, 7 Ohno results will be felt only when we complete all the three eyel Weare talking hereof a five-yearspan.” “That, in my view. isfaitly long,” said Seshachar. "We need tocutthat cycle frst. So, what happened nex? | Once we identified the subreycles and the minkeycles in {he Mahearket Cycle,” continued Patel, “we established the: ‘mnbtheoreticallyrequired forthe completion ofatlthe stages of «askin each minicycle.Thiswe called a baseline. We already had data on most ofthe baselines in ourTime and Motion Si * ‘diesimanuals Oneewe had aarp ch (he thousandsolbaselines ina company, we established a new benchmark foreach bee lire ater eiminating ne redundant steps in the cycle." “Therevised measureswaseatled Entil@Micht-Thewaptets ese the two measures was called the Competitiveness Gap, People had to make the shift rom the Baseline to Entitlement Nth SCOR na tm TeSCUTCA thas ea Orstweie yi ‘became yet another parameter of perlormanes anpratsat 1 ga See why everybody is experiencing discomfort, as [lok Roy told me during my meeting wth him, even aswe ane hallway through tc.” said Seshachar, looking al the checkelc nee again. “The brunt ofthe problem is being faced by Sud 1 caine piatvch! on “His fears of material costs going up are weltiounded. Evidently, iti only when our supplies ain Srcet TR practices thatthe quality Joop will be complete ‘Should | wy "Tot AT UBERTY HAS, INDEED, BECOME AN ENIGMA ANNOGBF The company’s cycle times have cecicede uur {Guctanty has gone up and costs are down, most of Libery’s ‘orklorce is disenchanted with the quality movement. Worse, plonpisit Ws employees. ven, Lbeny slovabeustomers re Shing away Is there cause fr alarm at Liberty aber the ig “ir 1 roa? How should Seshachar ensure thatthe quality seen remains on course? How should the managemer with the apprehensions expressed by em; ovdiiteu wittt Udlll