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Case Study - Bharat Engineering Works Limited

Bharat Engineering Works Limited faces new challenges with the entry of two competitors using foreign technology. The company previously dominated the market but now struggles with profits and sales. Key problems include a lack of integrated planning, old machinery increasing costs, insufficient sales support, and an R&D department focused on long-term rather than short-term projects. Mr. Kumar, the new general manager, must implement solutions like establishing an integrated planning system, increasing the sales budget, replacing old equipment, and aligning R&D with current production needs to help the company overcome these issues.

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8K views3 pages

Case Study - Bharat Engineering Works Limited

Bharat Engineering Works Limited faces new challenges with the entry of two competitors using foreign technology. The company previously dominated the market but now struggles with profits and sales. Key problems include a lack of integrated planning, old machinery increasing costs, insufficient sales support, and an R&D department focused on long-term rather than short-term projects. Mr. Kumar, the new general manager, must implement solutions like establishing an integrated planning system, increasing the sales budget, replacing old equipment, and aligning R&D with current production needs to help the company overcome these issues.

Uploaded by

aarty
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Case study: Bharat Engineering Works Limited

Bharat Engineering Works Limited is a major industrial machineries besides other engineering
products. It has enjoyed market preference for its machineries because of limited competition in
the field. Usually there have been more orders than what the company could supply. However,
the scenario changed quickly because of the entry of two new competitors in the field with
foreign technological collaboration. For the first time, the company faced problem in marketing
its products with usual profit margin. Sensing the likely problem, the chief executive appointed
Mr. Arvind Kumar as general manager to direct the operations of industrial machinery division.
Mr.Kumar had similar assignment abroad before coming back to India.

Mr. Kumar had a discussion with the chief executive about the nature of the problem being
faced by the company so that he could fix up his priority. The chief executive advised him to
consult various heads of department to have first-hand information. However, he emphasised
that the company lacked an integrated planning system while members of the Board of
Directors insisted on introducing this in several meetings both formally and informally.

After joining as General Manager, Mr Kumar got briefings from the heads of all departments.
He asked all heads to identify major problems and issues concerning them. The marketing
manager indicated that in order to achieve higher sales, he needed more sales support. Sales
people had no central organisation to provide sales support nor was there a generous budget for
demonstration teams which could be sent to customers to win business.

The production manager complained about the old machines and equipment’s used in
manufacturing. Therefore, cost of production was high but without corresponding quality.
While competitors had better equipment’s and machinery, Bharat Engineering had neither
replaced its age-old plant nor reconditioned it. Therefore to reduce the cost, it was essential to
automate production lines by installing new equipment.

Director of research and development did not have specific problem and therefore, did not
indicate for any change. However, a principal scientist in R&D indicated on one day that the
director of R&D, though very nice in his approach, did not emphasize on short-term research
projects, which could easily increase production efficiency by at least 20 per cent within a very
short period without any major capital outlay.
Questions
(a) Discuss the nature and characteristics of the problems in this case.
Ans. Here are the problems that hinders the growth of the company.
1. Previously the company had limited competition. So, they had huge market share to
themselves for machinery but after the entry of two new competitors which had foreign
collaboration the company faced marketing problems and profits dipped.
2. There were no integrated systems of planning which made it difficult to coordinate with
other departments.
3. Old machinery is still operational and hence manufacturing cost is higher.
4. Poor technical support as there is no proper department and the engineers are spread.
5. The research and development department focusses mainly on long term projects and
not on the current products working efficiently.
6. Jobs were outsourced from outside at higher costs and their work done was substandard.
7. The competitors had advantage as they had better equipment’s and machinery.
8. Their products faced quality concerns as machinery to manufacture products was old
and obsolete.

(b) What steps should be taken by Mr Kumar to overcome these problems?


Ans. Mr. Arvind Kumar was appointed as General Manager, operations and he should
take the following steps to overcome these problems.
1. He should focus on enabling an integrated planning system so that messages and
information can be communicated seamlessly.
2. Sales team budget should be apt so they can demonstrate and can offer trials to the
consumers.
3. There should be a recruiting process with proper training and orientation. And an
dedicated team of engineers should be made for technical support.
4. Research and development team should be aligned with the current projects as well.
5. Replacement of old machinery and equipment with new and improved machinery to
better their profits and market shares.

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