Customer focused virtual cell

Abstract

Avasarala Automation Ltd. is a manufacturer of custom-built capital machinery for the industry having a product range of Special Purpose Process Machines, Conveyors and Automation Equipment. In a year, Avasarala gets around 100 orders ranging from Rs. One Lakh to Rs. Five hundred Lakhs from different industries like Automobile, Electronics, Consumer goods, White goods etc. From past two years Avasarala is facing major problem in delivering the equipment according to the committed delivery schedule. The problem is continuously rising at the alarming rate. For the year 1998-99, the average delay of the project due to various reasons was approximately 285%. The management is seriously worried about the delay in projects and they are prepared to change the organisation system and to train people to improve the situation. In this study, customers opinion about importance of delivery performance and Avasarala's delivery performance was obtained through a questionnaire. Avasarala's delivery performance is assessed based on a study of sample 30 projects executed during 1998-99.Avasarala's order flow process is analysed and executives of various departments were interviewed to gain deeper insight into the phenomenon of delivery delay and the associated causes. Based on the analysis, certain recommendations were made to overcome the delivery problem. Customer feedback analysis revealed that Avasarala's delivery performance is poor. 25%customers are satisfied with Avasarala's delivery performance, whereas 70% of the customers gave priority to delivery. Avasarala fares well in quality, which is first priority, followed by delivery and cost. Avasarala prices lie slightly above the Indian competitors price, but is much below compared to foreign competitors. Avasarala customers are unhappy about service provided by us, though customers gave last priority to service. The major reasons for the delay may be listed as follows. The analysis of project data of 30 sample projects Average time overrun for the projects is 285%. Time overrun for the major activities like design and drawings ranged from Delay in parts receipt (47%) ** New design order (36%) Job specification not clear (36%) Project schedule under estimated (33%) Project schedule under estimated (33%) Long lead time for bought out items (27%) Modified design order (23%) Long trial time (20%)Problem due to the organisation function and process. Understanding customer need and customer support is not sufficient Delivery dates are committed only by guess work and without any scheduling Barrier between the departments for smooth functioning Looking for a scapegoat instead of problem solving Authority and responsibility is not delegated to project in charge. Improper project scheduling and planning Inefficient project control There is no single person accountable for the delay Most of these causes could be traced to lack of order focus. As Avasarala products are not repetitive in nature, recommendation is given for implementing virtual cell in the organisation to overcome the delay and meet the customers need. The expected period to see the improvement may vary from 6 months to a year.