Pramanik Containers And The Bottleneck

Written Analysis and Communication
Individual Assignment No 2
Case Analysis Report On
‘Pramanik Containers And The Bottleneck Challenge (A)’

Submitted by

Name: Rahul Agarwal Roll No: 131246 Section: B

Institute of Management, Nirma University Date of Submission: 16 August, 2014

EXECUTIVE SUMMARY
Pramanik container was a family business owned by Bansilal Mehta which manufactured and supplied customized aerosol cans to pharmaceutical companies. They were the sole supplier of aerosol cans to ABC Pharma. Piyush Mehta, Son of Bansilal joined the business and was intrigued by constant bottleneck of printing department. Printing plates were hard to locate when required for repeat orders which lead to constant delay in start of work. Shankar and his crew often had to work overtime to complete the orders due to mismanagement of plates. Bansilal is not ready to spend any money to upgrade the system but piyush wants to improve the storage of plates. He should look to outsource storage and delivery of plates to external firm and introduce ERP technology for the same.

WORD COUNT: 120

SITUATIONAL ANALYSIS

Pramanik containers Pvt Ltd, established in 1977 was a family based business owned by Bansilal Mehta in Mumbai. They used to manufacture customized aerosol containers and was the sole supplier of cans to ABC Pharma, a large MNC since 1977.An informal meeting between Bansilal Mehta and Mohan Singh, purchasing director of ABC Company had initiated the business partnership and within a year’s time Pramanik supplied aerosol cans to ABC Pharma. Pramanik had created a value on its own through product quality and fast service. Many new customers tied up with Pramanik because of its ever spreading capability and quality service (for which they were known) which resulted into an annual sales of about Rs 315 million by 2009. Bansilal was also interested in bidding for new business and supply aerosol cans to Radiant healthcare who were entering Indian market to sell deodorants. Pramanik used to manufacture aerosol cans according to specific customer requirements viz. size, shape, diameter of cans. These requirements were met by installation of 4 high speed automatic fabrication machines which operated at a rate of 25 cans per minute. The printing department had to decorate cans according to customers specifications and this required a high-capacity machine which could print 300 parts per minute.
By 2010, Piyush Mehta son of Bansilal Mehta joined his family business after completing his family managed business (FMB) program. On his first day in the company he walked into the printing área and saw Shankar, the head printer sleeping on the job and also observed that operation management in printing department was in total mess. Printing plates required for printing process were hardly found in time resulting in delay of entire process. Upon enquiring from Rakesh the Accounts Assistant of the company he got to know that plates used for new orders were kept in storeroom after use to be subsequently used in repeat orders. But there was no proper mechanism in place for arrangement of plates so they could not be located easily. So to compensate the time lost in finding the plates employess often worked overight to complete the order. It resulted in extra costs as workers were paid overtime wages and new plates were made only in emergency orders in case old ones were not found.
Pramanik received about 60 orders per day and manufactured 30,000 cans per day. It had produced nearly 30,000 designs during last 15 years. Plates of all these customers were maintained for use in case of new order. Maintaining accounts of such vast data required meticulous work. But Shankar insisted that they should hire another person to maintain the registers as he was already busy running the machine but this was not acceptable to Bansilal. Piyush decided to deal with the problems and discuss the same with his father. Piyush wanted to restructure the storage operations of plates in his company, but further investment is not acceptable to his father. So Piyush has to come up with a concrete plan whether he should introduce technology for data maintenance of printing plates, reduce the extra costs which are paid for working overtime or he should hire extra employees to maintain the registers of plates.

PROBLEM STATEMENT
Improper management of print plates records leading to unnecessary load on the employees of printing department resulting to the low efficiency and extra costs.Bansilal was not ready to make any investments in upgrading the present system.

OBJECTIVES:
1. To improve operation and time managing department of printing division with minimum extra cost.
2. To store and locate printing plates in an efficient manner.
3. To introduce technology for maintaining data of printing plates and customers orders.
4. To reduce excessive work load on employees.

OPTIONS:
1. Buy a new warehouse or rent it to store printing plates.
2. To introduce technology like ERP system to maintain computerised data of printing plates.
3. Hire extra people to specifically maintain printing plates registers.
4. Outsourcing the work to some company so they can maintain data storage of printing plates properly.

EVALUATION OF OPTIONS:

OPTIONS

O
B
J
E
C
T
I
V
E
S

1. Buying a new warehouse will require lot of investments initially as well further operations costs for running the facility as well buy new equipments. It would be beneficial for proper maintenance of plates, cost incurred would hinder its implementation.

2. Introducing ERP system will professionalize the system. It would store information of each and every plate and employees will be able to prepare printing plates whenever customers place their orders. But it will require huge setup cost and they will have to hire employees and train them.

3. Hiring employees for maintaining record of plates will be a better option keeping cost factor in mind. Although it will lead to extra costs but it will be negligible as they were paying Shankar and his crew overtime wages. Also it will reduce unnecessary load of current employees and they will be able concentrate properly on their work. But for maintaining huge amount of data, use of technology is advisable.

4. Outsourcing maintenance of printing plates to external firm will help Pramanik to focus on its core service of manufacturing and supplying aerosol cans which they are known for. Printing plates can be made depending on customers order and the outsourcing firm can maintain the data according to that. This will help employees of printing department to focus on decorations of cans and need not worry about locating plates for every order. But this implementation requires investment and he will have to convince his father who is not willing to spend any money.
RECOMMENDATION:
Piyush should try to negotiate with his father and convince him to invest money in outsourcing firm and to reduce constant bottleneck in printing department. Although hiring new employees will avoid extra costs but recommendation would be to outsource the work to the external firm. As Pramanik is well known aerosol manufacturer company,they should focus on its better quality service and fast service and let the external firm take care of the records of printing plates. This will reduce load from Shankar as well as his crew’s shoulders and they will be able to work efficiently on printing machines.

ACTIONPLAN:
Piyush has to come up with a concrete plan and convince his father and take him into confidence to invest the money into the outsourcing firm by showing him that they are already spending extra cost due to mismanagement of printing plates so they can cut down on the unnecessary spending which is affecting the company and customers not receving their delivery orders completely due to orders becoming an emergency order. To implement the idea of outsourcing firm Piyush should ask his team to float tenders to invite firms interested in storing and delivering printing plate.

CONTINGENCY PLAN:
Piyush should implement ERP technology in the firm as the data storage of the printing plates will be computerised. It will equip the company and it would help him as the company looks to expand the business in the future.

Word count-1150

UNDERTAKING
To Whom It May Concern:
I, Rahul Agarwal, hereby declare that this assignment is my original work and is not copied from anyone/anywhere. If found similar with sources, I take complete responsibility of action taken thereof by WAC team.

Signature
NAME: Rahul Agarwal
ROLL NO: 131246
SECTION: B