Case Study

Pramod Kumar (PK) had recently taken over as a CEO of a 500 Cr. Multi product manufacturing company. Before this assignment, he had a stint with a competitors firm for about 5 years and was largely credited for pulling this company out of red through his application of some modern manufacturing techniques. His 25 years of manufacturing experience was full of challenging assignments and an excellent track record.

His new company had good market reputation and was in top 5 bracket amongst about 15 competing companies in this field though its position had dropped from no. 2 to no. 5 in last 4 years in terms of its market share. There was also a steady erosion of its profitability during this period. Though the company had many products in its range, its top 5 products ( Products A, B, C, D & E ) accounted for almost 90% of its total turnover. Products D & E were introduced in the market about 2 years back and the company had pinned very high hopes on them. Introduction of these products in the market was considerably delayed due to a number of problems during the development stage. Similar products of a competing company were doing quite well in the market and as a matter of fact, this company which was considered as a non entity only 3 years back had jumped to no.3 position in the market share the last year.

Comparative figures of the last 3 years were in front of PK and to a seasoned campaigner like him these looked quite ominous.

Product	Sales (Rs. Cr)			% Market Share			CSI %			Profit (Rs. Cr.)
	04	05	06	04	05	06	04	05	06	04	05	06
A	223	210	230	15	12	12	95	90	85	22	11	-8
B	160	180	205	8	10	12	90	92	95	14	12	15
C	70	75	75	6	7	7	95	96	97	4	5	5
D		10	25		3	6			72		-2	-5
E		5	15		2	4			65		-2	-3

PK knew that the problem was not with the workforce. Company had excellent industrial relations. His predecessor had introduced a very lucrative incentive scheme for products A & B, which prompted the workers to give maximum outputs in these areas.

Supervisory and managerial staff was competent and dedicated. Company also boasted of excellent suppliers relations. There was of course some irritation amongst the dealers of companys products due to cut in their margins which were done to keep down the prices for the end customers.

Immediate problem which PK could see were:

1. High rejections and rework in products A & B.
2. Delivery delays and short deliveries in product A.
3. Loss of 4 major dealers in northern region to the competitor.
4. Sharp erosion in profitability in last 3 years.
5. Disappointing performance of newly introduced products.

PK knew that he was facing the biggest challenge of his career.

What should he do in this situation? NOTE : CSI Customer Satisfaction Index