Case Study:

Milk Products Limited is engaged in collecting, processing, and distributing milk and milk products in a large
city in South India. Most of the products of the company are such that these have to be distributed on daily
basis. The company has crew distributors who approach the fixed customers, both bulk buyers and
individuals. Mr. K. Ramesh joined the crew of distributions after doing MBA. The distributor manager was
quite impressed by Mr. Ramesh but initially could not offer him a better job than that of a distributor.
However, he promised to give him better opportunity whenever available. Mr. Ramesh joined gladly.

The distributors are employed on monthly salary basis. In order to ensure distributor of the products, the
company has a provision of over-time pay. Normally, crew members work slowly in the beginning just to
accumulate over-time pay. The pace becomes hectic towards the end of the day with some over time to
meet the distribution schedule. There is no group leader but there are several old-timers who influence new
comers regarding the work rules. Mr. Ramesh did not like this method working but had to follow the group
to be a good team mate. He gathered that over the years, the company had paid around 60% over time
unnecessarily.

After a year, impressed by the work of Mr. Ramesh and this overall suitability, this distribution manager
offered him the position of distribution supervisor. The basic duty of supervisor was to look after the
distribution system and to develop new customers in a given area. Beside Mr. Ramesh, there were four
other super visors also. Ramesh was sure of making distribution system effective as he was aware about the
delaying tactics of the crew. He was quite sure about cutting the over-time cost and impressing upon the
distribution manager about his capability. He advised the distribution manager about fixing the quota of
work per day in two parts before lunch and after lunch. The distribution manager felt convinced and
introduced the system. However, the efficiency dropped down considerably and no crew member was near
the target.

Question:

1. What were the reasons for decreased efficiency in the new system?
2. Advise Mr. Ramesh and distribution manager about the future course of action.
Case: Bharat Engineering Works Limited
Bharat Engineering Works Limited is a major manufacturer of Industrial machineries
besides other engineering products. It has enjoyed considerable market preference for its
machineries because of limited competition in the field. Usually there have been more
orders than what the company could supply. However, the scenario changed quickly
because of the entry of two new competitors in the field with foreign technological
collaboration. For the first time, the company faced problem in marketing its products
with usual profit margin. Sensing into the likely problem, the chief executive appointed
Mr. Arvind Kumar as general manager to direct the operations of industrial machinery
division. Mr. Kumar had similar assignment abroad before coming back to India.

Mr. Kumar had a discussion with the chief executive about the nature of the problem
being faced by the company so that he could fix up his priority. The chief executive
advised him to consult various heads of departments to have first hand information.
However, he emphasized that the company lacked an integrated planning system while
members of the Board of Directors insisted on introducing this in several meetings both
formally and informally.

After joining as general manager, Mr. Kumar got briefings from the heads of all
departments. He asked all departmental heads to indentify major problems and issues
concerning them. The marketing manager indicated that in order to achieve higher sales,
he needed more sales managers and sales professionals. His main concern was a lack of
engineering support to sales and marketing efforts. The company had adequate
engineers but they were spread under three separate engineering groups. Sales people
had no central department which had responsibility to provide sales support. Therefore,
some jobs were being done from outside at higher costs or with lower quality. Besides, he
needed a generous budget for demonstration system which could be sent on a trial basis
to customers to win business.

The production manager complained about the old machines and equipment used in
manufacturing. Therefore, cost of production was high but without corresponding
quality. While competitors had better equipment and machinery, Bhrarat Engineering
 neither replaced its age-old plant nor got it reconditioned. Therefore, to reduce cost, it
was essential to automate production lines by installing equipment.

Director of research and development did not have any specific problem and therefore,
did not indicate for any change. However, a principal scientist in R&D indicated on one
day that the director of R&D, though very nice in his approach, did not emphasize short-
term research projects which could easily increase production efficiency to the extent of
at least 20% within a very short period. Moreover, such projects did not involve any
major capital outlay.

Mr. Kumar got himself convinced about the management process going on in the
division and the type of problems being faced.

Questions

1. Discuss the nature and characteristics of management process followed in the company?
2. What are the real problems of industrial machinery division of the company?
3. What steps should be taken by Mr. Kumar to overcome these problems?