Explore this casestudy to learn how EPP Composites turned around its sluggishness to realise enhanced employee and customer satisfaction together with improving its core business through restructuring organization and adopting J.hirani’s Agile Transformation program.
Where the journey started…
Composites manufacturing, a global multi product and multi divisional group
- Established in 1986
- Employees: 2000+
- Corporate: Rajkot, Gujarat
EPP composites was established in 1986 as a small company focused on a narrow customer and product segment with a 50 people team. In a short span, the company was able to expand its facilities and cater to a wide range of markets and customers with the help of 2000 people. This fast paced growth of the company was facilitated by growing market demand and opportunities which it was able to tap into with its team and their experience in catering through production and sales; becoming India’s largest composites manufacturer.
However, in this journey of fast growth, complexities started crawling up at the same speed. As the work kept on increasing, more number of people were employed on the same positions leading to a wider span of control between managers and executives. Data and communications became tough to be managed. There was little to no focus on growth or improvements. Departments became hard silos and kept their focus strong on getting things done in their purview. Nobody had the idea how this zero cross functional knowledge and coordination was going to hurt them. Gradually issues started presenting themselves. Departments received complaints from customers, team and other departments; but with no one to answer them. Everyone was busy doing their work and yet they had nobody to stop and revise the roles they had to play in this large organization with challenges seeping in every day. The slowness started to be reflected in growth in sales, production and individuals alike. It was hurting its people as much as it was hurting its management.
- Decreasing sales
- Slower operations, no growth culture
- Meeting resistance to change
- Departments working in Hard silos
- Organization structure not aiding smooth functioning or communication
- Unhappy people
- Dissatisfied customers, unheard of and unanswered
- Corporate acting as a purchaser of raw materials and a governance authority for individual plants creating confusing roles
- Agile transformation- Implementing Scrum and introducing Startup theory
- Separation of manufacturing facilities (generation of SBUs) based on market and customer segment for the products
- Moving shared business functions like Procurement, Finance, HR etc. from Corporate Office to Individual Business Units, giving them autonomy
- Enhancing value chain through operations transformation
Swift growth, shaking foundations
In 1986, EPP was just foraying with a team of 50. Limited market and customers but the ability to scale up and do it fast. The enormous expansion to different markets, addition of production capacities to match growing demands, leading to building a large ship of close to 2000 people working day in and day out to match orders with production and dispatch.
Isolated functions, broken value chain
Sales, production and procurement were isolated from each other. While the sales team were shared for all markets, procurement was common and production was based in different sites. With physical isolation, they were also isolated in their functional role. No prediction from the sales team made its way to production and no planning from production made to procurement. The culture was need driven against planning driven thereby not adding value of their existence to each other. There was a need to link them together and open communication lines through the value chain in order to break silos and add value.
Apart from internal complexities, EPP was unable to service its customers well. Due to delays and lack of information, customers were greatly dissatisfied.
Focus on speedy growth, gaps in structure
The speedy growth of the company led to multiplying positions at executive level for the functional roles. This was because the company added people to share work load to support sales and production expansion. It led to a big span of control under the managers creating massive leadership gaps. There was top management, the corporate office and the production units.
Shifting to New Phase
KEY PLANS MADE AND IMPLEMENTED TO ACHIEVE SUCCESS
- New organization structure
- Identification of key and support functions required in each unit
- Splitting teams where necessary and employing managerial staff
- Revisiting and revising the value chain to ensure right processes and enhanced communication channels
- Redefining role of Corporate as a Governance Authority. Drafting new governance guidelines for Corporate functions
- Guidelines on how individual scrum will function
- Drafting advantages of autonomy and how to use it
- Mentoring programs on how to function and drive team
The need to break roles of corporate, new code
Functions like procurement, finance, accounting, HR, logistics etc. were part of the corporate office. Corporate acted as a purchaser of raw materials for production units as well as governance authority for these individual plants. With broken chains of communication between plant and office, in events of delayed material supply, plants had to only wait until they received material. Requirements of funds and raw material were unheard of as corporate was unable to segregate individual plant requirements in terms of cash or material.
Corporate was governing plants through policies on accounting, people, operations, finance etc. While this was beneficial for the company, there were imbalances in managing common resources of cash and material; plants were going through a situation of internal conflict because of delays caused due to other plants.
Adding Agility, revising culture
A complete turnaround was obtained through Agile framework adapted and implemented by J.hirani. SBUs were generated based on target market segment and product application. The SBUs were given all resources to work independently. All SBUs worked were provided guidelines to work as a startup. The SBUs were now individual companies with all departments from production planning, procurement to sales and finance.
With corporate roles redefined as governing authority, it helped end the conflicts group had to go through. Corporate was also able to focus attention on more important job like thinking and improving growth aspects as well as mentor SBUs on directional strategies.
One step at a time
Whenever an organization tries to change too many things at once, it becomes fragile. Planning and implementation of Agile transformation was done one baby steps at a time. It was a journey filled with implement, check, resolve, check, freeze. Since it was a huge shift in culture of EPP and how this company had been working in past, it was evident that this transformation will meet resistance. J.hirani planned turnarounds through mentoring, guiding and resolution of working conflicts between teams and departments.
A lot of time and effort were spend in implementation programs to ensure people know what they are working on, have meaningful work, and are able to perform and work cohesively. Teams were mentored on value chain, roles of departments and how to work in teams- giving a sense of how each area of work affects others.