Sparkling Glass

Sparkling Glass Limited Situational Analysis

Sparkling glass limited, a glass container manufacturing unit with a turnover of 300 million, has been making losses for last two years. The main reason is production cost is 75% of sales turnover. Sales cartels, government controlling the input prices (silica and sand) and unions determining wage rate lead to rise in the cost. As no specialized training was available, workers were given on the job training. Industry could not produce variety of bottle as it did not prove to be economical, even though it had a demand. Competitors had an advantage over the company as they provided low price products. General shift in charge of the company is responsible for production planning, scheduling and costing. Production planning includes the process of buying the raw materials and converting them into the final products. Scheduling involves allotting work to the labours, at a particular time, for a specific task, which helps in reducing production time and cost. Costing is keeping accurate track of the expenses for the production of each unit. Working in shift is necessary as manufacturing glass is a continuous process. Frequently turning on and off the furnace leads to fluctuation in the temperature, bringing down the quality of the glass and also incurs heavy cost. Company is facing an issue of hiring a person in place of Ashok (retiring in few months), who is general shift in charge. The company can either recruit internally or externally or give an extension to Ashok. Recruiting externally would involve cost of hiring and training, which the company cannot afford and giving extension to Ashok would not solve the company’s problem in the future. Internal recruitment involves promotion of four shift in –charges: - Khanna, Punjabi, Gupta and Gulati. Khanna is a glass technologist with five years of works experience and has good communication skills which have helped him to resolve problems with a customer. However he has...