Crompton Greaves Ltd (CGL) is an electrical engineering company owned by Avanta Group. In the 1980s, CGL faced falling demand and profits due to recession. To regain lost market share, CGL undertook major reforms including creating cross-functional teams, implementing total quality management practices like 21,000 kaizen projects, and adopting single-piece flow and just-in-time manufacturing. These efforts improved productivity, inventory turnover, and profits.

2. • Crompton Greaves Ltd (CGL), owned by Avanta Group, L.M Thapar as the CEO.
• Leaders in Electrical Engg components like transformers, switch gear, control
equipments, motors.
• In 1948, L.M Thapar group, Greaves Cotton & Co Ltd, acquired 26 % stakes in
UK based Crompton Parkinson Ltd, which Later increased to 50% in 1956.
• In 1966, Greaves Cotton & Co Ltd and Crompton Parkinson Ltd entered a joint
venture to form Crompton Greaves Ltd.
• Manufactured Ceiling fans and AC industrial Motors during its initial phase.
• In 1987, CGL entered telecommunication and industrial electronics arena.
• Today the company’s revenue accounts US$850 million and operates in 90
countries

3.  With Recession down the corner(1982) and the
company running into looses before hand, a desperate
need to relook into its manufacturing and marketing
approach was realised.
 Major revamping was done through out the plant to
regain the lost market share and beyond.

4.  Falling Demand due to Recession
 Higher Production Capacity and Employment levels-
Declining Productivity
 European Model of Planning
 High Rejection Rate
 Process Layout
 Large amount of Inventory Carried
 High Work-In-Process inventory

5.  Company’s Presence only in low margin businesses
 Low pricing power
 Lack of technology support
 Low investment in R&D

6.  Step 1: Creation of Cross-functional task forces to
identify and solve problems on shop floor.
 Step 2: ‘Value added management’ approach under
TQM.
 Step 3: 21000 Kaizens during 1993-1995,the highest
number in the country.

7.  Step 4: Concept of Single Piece Flow (SPF) or Cellular
Technology.
 Step 5: Layout changes and emphasis on housekeeping
to make the unit more efficient.
 Step 6: Improvisation of SMED (Single minute
Exchange of Die) to reduce set-up times and faster
changeovers.

8.  Inventory carried period declined from 2.87 months in
1992-93 to 2.35 months in 1994-95.
 Inventory turnover ratio up from 2 in 1992 to 7.5 in
1995.
 Productivity went up from Rs 6 lakhs per man per year
to 12 lakhs.
 Managerial efficiency also went up from 23% to 51%.
 CGL turnover crossed 1000 crores and profits increased
six times.
 Time spent on employee training also went up from 1%
to 3%.

9.  Quality improvement and meeting customer demands
 Shop floor workers gathered customer inputs
 Cross functional task force
 Single piece flow(SPF)
 Computerized model for inventory control
 House keeping
 Equipment placement

10.  Flow of work in Anti-clockwise
 Single product in single cell
 Wastage reduction & better inventory control
 production retained
 Space utilization reduced by 75%
 SPF analyzed bottlenecks and problems
 Kanban system implementation (for example red bulb-
no material or no order & yellow bulb- basket was
full).

11. What is “value added?”
 If you are considering a value-added enterprise, there are
two key questions to answer:
1) What attributes of your product does
the customer value?
2) What creates a value-added product?

12.  What creates added value?
 Quality
 Functionality
 Form
 Place
 Time
 Ease of possession

13. CGL worked on the housekeeping front as well to make
the unit more efficient. Following are the ways to
improve efficiency:-
 Material was organized so no searching was required.
 All of the items were allocated a place, close to where
it was used, with the date and inspection status marked
on it.
 The layout was changed so that minimum transport was
required.

14.  Visual Control implemented like pipe in different
colors were put up so that problem lines could be easily
identified , ‘Andon’ devices were installed on
automatic lines to warn of faults.
 Detailed instruction in both English and the local
language Marathi were put up.
 Chart displaying the cost of energy per machine per
hour were put up to reduce energy wastage.
 A malfunctioning magnetic sensor was fixed for just Rs
440.