Industrial company of the refrigeration sector with headquarters in Barcelona. Its subsidiary in the Czech Republic presents continuous losses and the company management feels that it does not have the situation controlled. For more problems, from the Czech Republic are delaying the orders they had made from the central. In the branch work about a hundred people and, apart from being one of the component factories that nurture the organization, it is also a strategic commercial position to operate.
The company has partly tolerated this situation or some time because of the tranquility that gave good results in other markets, but it is becoming urgent to be competitive in the eastern countries because the competition is positioned and the margin is increasingly more narrow.
The General Director is very busy with more important tasks and can not follow up exhaustively or travel to the country regularly.
Our task is to audit the management of the company and its procedures and propose a solution that facilitates greater control by the head office.
We traveled to the company’s facilities and we met with the subsidiary’s Management Team. We analyze the day to day tasks together with them, including all the information records they use, the meetings they have, the content of their work and what degree of responsibility they hold. It is important to penetrate their interdepartmental relationships and their company culture.
Our analysis, supported by the evidence we have been able to obtain, derives in the following conclusions:
The Organization of the company is very flat and excessively dependent on the Manager, there are too many departments that report directly to him without intermediate commands. In addition, the organizational chart of the company does not imply the functions of each department.
The responsibilities are not well distributed among the departments. There are some who assume much responsibility and others very little.
The relations between the subsidiary and the headquarters are very fluid with an almost non-existent communication.
The strategy of the company is wrong. They try to gain volume by lowering prices when their product is totally personalized. Therefore, the production is very destandardized and the technical department is not sufficiently agile.
The hourly rate of the workers is poorly calculated and there is no way to calculate the actual margins with which the company works.
The management of purchases is totally decentralized. Everyone buys material according to their needs and without any restriction. The warehouse is full and there is almost no space to handle the merchandise.
The use of technological resources is inefficient and as a consequence, the productivity of workers decreases and the registration and transfer of information is not efficient enough.
They use a reporting system outside the ERP system that the company manages. The consequence is that managers spend too much time doing manual reports and do not have time to analyze the content. The same case happens with the Manager, for which the information that is prepared is useless since nobody looks at it.
Improve Advisors prepares a document that includes the review of the functions and responsibilities of each of the departments, an assessment of the technology used and expresses the explanations listed above. Additionally, it proposes an Action Plan that includes aspects such as how the company should be organized, the design of the most appropriate functional organization chart, the design of the company’s processes and the application of the distribution of proposed functions and responsibilities.
The subsidiary now works in an organized manner. The distribution of functions is equitable and corresponds to the level of preparation of the people. Everyone knows what their function is and communication is much more fluid thanks to the continuous meetings that heads of department have.
The Manager of the subsidiary is no longer so burdened and can spend time organizing his people following the indications of our Action Plan.
The Director of the parent company should not move so often because immediate problems are no longer common and obtain the information that is important to him through a specifically designed reporting.
The Company has been able to absorb the strong growth that has subsequently occurred, increasing the productive capacity through a better organization and efficiency of its existing resources.