Confluence World
Delivering Integrated Sustainable Development Solutions

Confluence has several success stories of partnering with clients in their pursuits towards excellence.

1. Using Metrics for Performance ImprovementsPerformance improvement1
A twelve-year-old company with a turnover of Rs. 19 Crores has approached us for systems implementation. Our initial studies revealed that the organization has great culture and the top management is highly respected and inspiring for the rest of the team. There was an open and friendly work environment in the organization and people were all waiting for somebody to change the current situation. In spite of all good things, the organization has seen only a single digit growth of around 9-10% for last four to five years, wherein the their industry segment has grown at more than 15%. Through Consulting Intervention the sales went up from 19crores to 25 crores i.e., 31.5% growth in one year.
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2. Supplier Capability Developmentcapability development
A major industry employed our consultants for improving the capability of their suppliers, who were basically involved in end of the process operation. Our consultants could help the client organization in reducing the order processing time from average 20days to more than 90% orders processed in less than 3 days and reduced customer complaints from a level of 571 complaints to 10 complaints per annum.
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3. Strategy DeploymentStrategy deployment3
A Pharma Company with a stagnated growth and three to four products was transformed in an year to a company with more than 15 products and a healthy growth of 15% to 20%. This was made possible with effective strategy formulation and deployment.
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Business Transformation4. Business Transformation
A manufacturing company affected by market down-trend was struggling to survive and became an NPA. Through the consulting initiative along with our alliance partners, the organization was transformed into a profit making by financial restructuring and operational cost reductions.
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5. Operational Performance ImprovementPerformance improvement
A SME company with around 15 Crore turnover, employed our consultants for transforming their marketing team and subsequently the whole organization and Confluence had implemented a customized performance improvement solution for a period of six months. Our consultants analyzed the existing operations and identified the bottlenecks in the entire operations. Doing this the organization was able to increase the capacity utilization from 71% to 92% and throughput went upto 250 tons/ month from highest 190 tons/ mth prior to consulting intervention.
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training solutions6. Customized Training Solution
For an ISO 9001 certified company, a customized training solution was developed to improve capabilities of their internal auditors and improve internal audit effectiveness.
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Case Studies:

Confluence has several success stories of partnering with clients in their pursuits towards excellence.

1. Using Metrics for Performance Improvements

A twelve-year-old company with a turnover of Rs. 19 Crores has approached us for systems implementation. Our initial studies revealed that the organization has great culture and the top management is highly respected and inspiring for the rest of the team. There was an open and friendly work environment in the organization. In spite of all good things, the organization has seen only a single digit growth of around 9-10% for last four to five years, wherein the their industry segment has grown at more than 15% and people were all waiting for somebody to change the situation.
Based on our interaction with the client team we found some of the following reasons, which are leading to the situation explained to us

  1. The organization was adopting Make-To-Order production strategy, which was resulting in longer lead times and also results in lost orders/ opportunities and also lower capacity utilization.
  2. Lack of effective controls over C & F Agents
  3. Review systems were established only for sales and no other activity.

Keeping in view of the above reasons, the following actions were implemented

  • The sales pattern for various products were analyzed and products were categorized into Make-To-Stock and Make-To-Order with a defined criteria. This ensured that 75% orders are shipped within 24hrs, another 20% within 3 to 4 days and rest 5% within 2 weeks
  • C & F Agent ordering pattern was analyzed and a system was evolved to ensure that the C & F agent forwards all orders on the same day to the head office to ensure that the orders are served quickly to end customers
  • Designing a MIS system with a feedback to each of the sales team member
  • Evolved a review system for the entire organization wherein each HOD presents his functions’ performance and decides improvements.

Benefits Achieved:

  • Sales have increase from Rs. 19 Crores in the previous year to nearly Rs 25 Crores in the current financial year i.e., around 31.5%.
  • Reduced lead times where in 75% of orders are shipped within 24hrs.
  • Effective and timely decision making and also reduced lost orders/ opportunities and improved capacity utilization.

2. Supplier Capability Development

A major industry employed our consultants for improving the capability of their suppliers, who were basically involved in end of the process operation. Our consultants could help the client organization in reducing the order processing time from average 20days to less than 3 days and reduced customer complaints from a level of 571 complaints to 10 complaints per annum.

The organization carried out the last step of processing at sub-contractors, who are located close to customers. This actually provides them leverage of shorter lead times to deliver the products to customers. Before initiation of the project, the average cycle time for receipt of materials till conversion into required products was around 20 days.

After mapping the processes, it revealed several redundant steps and delays in the process for several reasons such delays in receiving information, lack of whole qty required for an order, operational problems with the sub-contractors, etc. FMEA was carried out to identify various potential causes for delays & product failures and proper controls were established, which resulted in the reduction of cycle time from 20 days to 3 days. People were made aware of the importance of meeting customer requirements.

As a result of these efforts, the customer complaints have reduced from a level of 571 complaints in an year to 10 complaints in subsequent year.

3. Strategy Deployment

A Pharma Company with a stagnated growth and three to four products was transformed in an year to a company with more than 15 products and a healthy growth of 15% to 20%. This was made possible with effective strategy formulation and deployment.

The company established in early nineties had three manufacturing facilities. Promoter directors were handling all the operations with one director managing marketing, commercial and administrative operations and another director was managing all factories.

Management was satisfied with whatever they have achieved and also company had a decent reputation in their industry. At the same time company was not growing in spite of good growth shown by Pharma sector. At this point of time confluence had provided ISO 9001 consulting and during various interactions with the management and involvement in operations, could feel the potential in the company.

After completion of first initiative, Confluence had proposed business strategy formulation and organizational restructuring. As part of this initiative, consultants had facilitated formulation of vision for the organization and also a restructuring was taken up. Whole organization was divided into different SBUs (Strategic Business Units) or profit centers supported by various support functions like marketing, HR, Purchase at corporate to support the SBUs. Also systems were established for business planning at overall organization level and at SBU level and budgeting systems were introduced. At the time of starting this initiative, organization had only three to four products to offer to customers, which went up to more than 15 products within one year from start of the project and one of the group companies had bagged a process patent on their name.

This was made possible by improved focus on resource utilization which was achieved by the SBU concept, competition to perform and achieve targets between SBUs leading to a motivated team and more free time with the Directors to focus on business growth plans which was made possible due to decentralization of activities and accountability with each SBU Head

4. Business Transformation

A manufacturing company affected by market down-trend was struggling to survive and became an NPA. Through the consulting initiative along with our alliance partners, the organization was transformed into a profit making by financial restructuring and operational cost reductions.

A manufacturing company was struggling to face the price competition from other players in the market, on analyzing it was observed that the organization had a considerable financial interest cost. Financial restructuring was proposed in order to reduce the financial burden and thus reduce interest cost. As part of this financial restructuring, the land and building were sold off and the factory was shifted to another place farther away from the city there by generating surplus funds due to difference in the land and building values, the surplus amounts were used to pay off the debts. Thus the interest cost was eliminated.

Then a thorough study of operations was carried out and more cost saving and waste elimination initiatives were taken up in the plant. One such measure was that there were operating at 50% capacity utilization but running generator as and when the electricity supply was down resulting in an average one lakh rupees per month on DG operation. A conscious decision was taken not to run the DG, but also see it to that the delivery commitments are still met. This has saved one lakh rupees per month for the organization. Similar initiatives were taken up to eliminate the waste in all areas.

Later a system of setting targets and working to targets was instituted and also a culture change initiative was taken up to motivate people towards goal driven approach to operations, which is yielding positive results and the organization is expected to break-even by end of FY 2007-08.

5. Performance Improvement

A SME sized company with around 15 Crore turnover approached mentioning that their marketing team is not effective as seen by the sales figures and receivable status and they also mentioned that their manufacturing operations are excellent and they work at very high levels of efficiency. The client was keen on transforming their marketing team.

Based on our interaction with the client team we found some of the following reasons, which are leading to the situation explained to us.

  1. There were no goals set for the marketing personnel.
  2. The metrics used for review were not giving the right kind of information
  3. The marketing team lacked passion for the organization and its products.

Keeping in view of the above reasons, the following actions were implemented:

  1. Case exercise of Hare and Tortoise story and application of the learning in their own areas
  2. Setting of objectives and targets for each of the marketing personnel
  3. Designing a MIS system with a feedback to each of the team member
  4. Interactive sessions with technical teams during the marketing meets

Benefits Achieved:

  1. Motivated team
  2. Improved sales over a period of six months – wherein the production was not able to meet the orders and enquiries
  3. Reduced payment realization times and improved receivables status

2nd Part of Solution:
Subsequently the management has decided to transform the organization and Confluence had implemented a customized performance improvement solution for a period of six months. Our consultants analyzed the existing operations and identified the bottlenecks in the entire operations. Based on the bottlenecks identified, appropriate corrective actions were implemented to optimize use of bottlenecks through proper planning and also effective maintenance activities to ensure that there is no downtime on bottleneck and the bottleneck stage runs continuously for 24hrs. Doing this the organization was able to increase the capacity utilization from 71% to 92% and throughput went upto 250 tons/ month from highest 190 tons/ mth prior to consulting intervention.

6. Customized Training Service

A client approached us mentioning that over a period time, the audits were becoming ineffective and management is finding it a waste exercise as most of the audits end with no findings or observations or even if there are observations they are merely about the documents. Keeping this in view the client wanted us to provide refresher training to the auditors

On our interaction with management representative of the organization and senior management we found the following causes for audits becoming ineffective

  • Most of the personnel identified as auditors were engineers and executives who are invariably occupied with their core activities and do them hands-on. Also they were confined to a specific function and their role doesn’t require any interaction with other functions of the organization.
  • Lack of maturity of auditors.
  • Auditors were not giving importance to the audits and were not willing to continue the same, as this activity no way contributes to their performance.
  • Strict instructions given to the auditors to focus only on compliance.

Keeping in view of the above causes, the following actions were suggested and implemented to make the internal audits more effective.

  • Book reading of Goal and Who Moved My Cheese.
  • Relating the learning experiences from book reading to application of concepts during audits.
  • Including carrying out audits as part of KRAs for the personnel involved in carrying out audits, which gives due credit to the efforts of personnel in this activity.
  • Modifying audit procedure to include a system for improving maturity level of auditors by various modes of exposure like regular focused training to auditors on TQM and process management concepts like COPQ, etc., participation in review meetings, sending to customer sites for complaint handling, reading of technical and managerial articles published in various magazine, etc.

Benefits:

  • Motivated auditors.
  • Improved quality of audit findings leading to improvements in processes.