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Jayant Dairy was set up ten years ago by the Government of Karnataka to supply milk and
milk products. It is located in the interior of Karnataka and has been catering to the needs of
almost the entire state for more than 30 years. Most of the big cities depend on it for their
milk requirements. It has set up its own retail shops in different parts of the state to sell milk
and milk products. These shops are attached to small hotels, pan shops, etc. It also sells its
products through other retail units like supermarkets and general stores. Off late, two other
dairy firms have started functioning at Bangalore and Mysore. They deal in pasteurized milk
only. Although they are nowhere near Jayant Dairy in terms of sales or distribution network,
it started feeling the pinch in these cities. These two firms have cut into the revenues of
Jayant Dairy in a very short span of time. Moreover, they have plans to engage in joint
operations in other cities. These firms are also tryin2 to market their own dairy products. As
the Government is trying to reduce its ownership and wants to hand over the dairy to private
owners, it wants to improve the profitability of the dairy. Upendra was therefore made the
Chairman and Managing Director of the company. He was given the task of turning around
the company so that the government could get higher price for it. Upendra had earlier worked
as consultant with several organizations in different areas including logistics, SCM, ERP etc.
As soon as he took over, he noticed that the employee morale was low. They were
apprehensive about their future because they had heard that the company was going to be
privatized. He also came to know that for the past two years there had been a rumor that the
company was to be restructured. The distribution network was in disarray. Jayant Dairy had
its own fleet of refrigerated tankers, which collected milk from far off places and brought it to
the plant. Often there was a shortage of tankers and the milk collected by small vendors was
spoilt. The pasteurized milk was supplied to different retail shops all over the state by
refrigerated trucks. These trucks were taken on lease from transport companies and were in
poor conditions. Moreover, these companies diverted trucks in good condition to other clients
like seafood transporters who paid them more. Often, it was not able to deliver milk to some
areas in the morning. Since its rivals were located in the cities, they could deliver the milk at
the correct time. Though demand had grown and supply of milk had also increased, plant
modernization and expansion had not taken place. Upendra had six months to set things right.
Questions for Discussion:
I. What according to you should the CMD take care of first? Give a reasoned answer.
2. What should he do to ensure proper functioning of the distribution system?
A Productivity Problem
Naidu and Sons Private Ltd is a leading maker of wooden artifacts. Manohar Naidu (Naidu)
established the company in 1970, and he and his sons are now managing the company. The
company had a humble beginning with two employees and a production rate of two or three
artifacts per day. In the early days, the customer reach of the company was limited to the twin
cities of Hyderabad and Secunderabad. Later, it expanded its reach to other parts of the
country. The company paid special attention to the quality of the output and products were
checked for the quality at every stage of production. Soon, the products of the company were
renowned for their quality. The company has grown considerably and the number of
employees is now 100. The demand for the company products has also increased
significantly. Traditional Indian artifacts have a large foreign market as well and the price
commanded by these products abroad is very high. The company therefore, expanded its
reach to foreign markets. To meet the erowing demand, the company automated its
production processes. As there were not many players in this sector in the country, it was
difficult for Naidu to benchmark the company performance. His focus was always on
improving the efficiency and effectiveness of the production processes. Recently, Naidu
noticed that in spite of automation and other facility upgradations, the improvement in
productivity was negligible; further, during his round of the factory, he saw that people were
working without any interest and enthusiasm. Being a considerate man, instead of
reprimanding the employees, he wanted to know the reason for their apparent lack of interest
and enthusiasm. lie tried to analyze the reasons for it but could not come up with any reasons.
He knew that human knowledge and skill was the key for the survival of the business. He
also understood that if he did not attend to the problem now, it might become severe and
difficult to handle. He therefore decided to conduct an organization-wide employee
satisfaction survey to find out why productivity had not improved. He appointed an external
consultant to design the survey questionnaire and analyzed the findings. He made it clear to
the employees that their identity would not be disclosed. and requested them to be frank
while answering the questions. The consultant conducted the survey and presented the
analysis to Naidu. On the basis of the opinions expressed in the survey, he found that only a
few employees were happy with the job they were doing. Most of them stated that their work
was boring. The satisfied workers were those involved in the final carving of the artifacts.
The workers, who did the cutting, polishing and basic shaping of the artifacts, were not
satisfied with their jobs. They said that their tasks were highly repetitive and did not provide
them with any challenge. With this analysis, Naidu was able to understand the cause of the
problem. In order to obviate the dissatisfaction among the workers and provide them with
new challenges, he decided to rotate workers among tasks that required similar skill levels.
Workers were given basic training in all the low-skills jobs. For instance, a cutter was trained
in polishing and vice-versa. After some time, Naidu could see the effects of these endeavors
in the form of increased productivity, and improvement in the satisfaction level of the
employees.
Questions for Discussions:
1. What problems could Naidu face in future due to lack of interest and enthusiasm in
the employees? How could the concept of job rotation help Naidu improve the morale
and enthusiasm of employees? What are the other advantages that he will get from
implementing job rotation?
2. What additional steps would you suggest to improve the situation in the company?
Scheduling Operations
Avinash Mechanical Works Ltd. is a supplier of 0.25 inch diameter alloy rods, needed for
electric arc welding to a large number of organizations. These include workshops,
manufacturing firms, and fabrication firms. Alloy rods of 0.5-inch diameter are procured by
Avinash from a supplier situated near to the unit. These are then machined to the required
specification and coated with special compounds, which help in the welding process. The
firm has five specialized machines into which these 0.5-inch diameter rods are fed, machined,
shaped, cut and indexed. Then these rods undergo a process of coating with compounds. The
management of Avinash is now facing a problem. The supplier's plant has been closed for an
indefinite period due to labor problems. The inventory management system in Avinash is
strong and since the supplier has stopped the supply, the company is now in danger of
running out of raw material inventory within four days. After an analysis of the situation, the
management found that it had two alternatives. A supplier is willing to supply one-inch
diameter rods to Avinash. Another supplier, situated in another city, is ready to supply 0.5inch rods to Avinash. However, they are charging a premium and need a long-term contract.
If Avinash settles for the one-inch rods available nearby, then it has to modify the existing
five machines so that the rods can be fed into the machines. The machines are costly and very
sensitive. However, there are experts who can adjust the machines within three days. The
labor unrest is expected to last at least for a month.
Questions for Discussion:
1. If you were the MD of the firm what would you do?
2. What should be done to avoid problems of this kind in the future?