CASE ANALYSIS: BHARAT ENGINEERING

WORKS
CASE ANALYSIS REPORT

Elements of Management (UEIM004): Group Assignment 1

By
Mihir Sheth (15BEC066)
Tejas Muthal (15BEC072)
Nancy Arora (15BEC075)
Shivani Patel (15BEC083)

Submitted To
Prof. Punita Rajpurohit

Department of Electronics and Communication Engineering

Institute of Technology
Nirma University
Ahmedabad 382 481
The Case under Consideration

Bharat Engineering Works

Bharat Engineering Works Ltd. is a major manufacturer of industrial machineries besides other
engineering products. It has enjoyed considerable market preference for its machines because of
limited competition in the field. 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 co.
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 a discussion with the Chief Executive about the nature of the problems facing the
company so that he could fix up his priority. The Chief Executive advised him to consult various
heads of departments to obtain firsthand information. However, he emphasized that the company
lacked an integrated planning system while members of the board of directors insisted on
introducing this in several meetings.

After joining as GM, Mr. Kumar got briefings from the heads of all departments. He asked all
departmental heads to identify major problems and issues concerning them. The marketing
manager indicated that in order to achieve higher targets, he needed more sales managers and
professionals. His main concern was a lack of engineering support to sales and marketing efforts.
The company had adequate engineers but they were spread under 3 separate engineering
groups. Sales people had no central organization which had the responsibility to provide sales
support. Therefore, some jobs were being done from outside at higher costs or with lower quality.
Besides, he needed a generous budget for demonstration system which could be sent on a trial
basis to customer to win business.

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

Director of Research and Development did not have any specific problem and did not indicate for
any change. However, a principal scientist in R & D indicated that the Director did not emphasize
on short-term research projects which could easily increase production efficiency to the extent of
at least 20% within a very short period. Moreover, such projects did not involve any major capital
outlay. Mr. Kumar got himself convinced about the management process going on in the division
and the type of problems being faced.
Case Analysis / Problem Summary
The real problems of the industrial machinery division of the company are as follows:
 The company is facing the problem in marketing its products with usual profit margin.

 Lack of an integrated planning system.

 Lack of proper planning as the company is not able to identify the threat from the
competitors in the external environment.

 The marketing department of the company is facing the following problems:

 Not being able to achieve higher targets because of shortage of sales
professionals.
 Lack of engineering support to sales and marketing efforts.
 No central organization with the responsibility to provide sales support leading to
high cost and lower quality.
 Budget needed for demonstration system to be sent to customers on trial basis to
gain business.

 The production department of the company is facing the problem of high production cost
and poor-quality products due to the lack of new and better equipment and machinery.

 The Research and development department of the company was facing the problem of
lack of integration of short-term goals with the long-term goals. The Director, research and
development was not emphasizing on short term research projects which if paid attention
could increase the production efficiency to 20% without any major capital outlay.

 Lack of proper control and co-ordination mechanism.

Analysis Discussion
Discuss the nature and characteristics of management process followed in the Company.
The nature and characteristics of the management process followed in the company can be
described as follows:

As far as the planning process is concerned the company lacks an integrated planning system as
a result of which it was not able to recognize the threat of potential competitors in the market well
in advance and faced the problems in marketing its products at above profit margins. Also, more
focus was on long term plans and due to non-emphasis and improper integration of long-term
plans with short term plans the company was facing the problem of low production efficiency.
The weak planning system at Bharat Engineering Works also could not recognize the need for
replacement of its age-old plants and equipment. Regarding the organizing function of
management process the company is organized on functional basis with well-defined
departments i.e. the marketing department, production department, and research and
development department. However, there is lack of co-ordination between the departments as is
visible by the problems the company is facing. The staffing function of the management process
is weak in the company as they could not identify or could not do the manpower planning in
advance as the marketing department was facing the shortage of sales professional to meet the
sales targets. The controlling mechanism is not well in place as it is the lack of the proper control
that is the root cause of the problems face by the company. It is after the problem has been
realized Mr. Arvind Kumar was appointed by CEO to direct the operations of industrial machinery
division. Thus, both the planning and controlling functions of the management are not well in
place.

What steps should Mr. Kumar take to overcome the problems?

Mr. Kumar should take following steps to overcome the above problems

1. He should introduce the integrated planning system as soon as possible in the company so
that the company could analyze the threats and opportunities in the external environment well in
advance.

2. As the marketing department is facing with the shortage of sales people to achieve the sales
target adequate manpower and proper engineering support should be provided to them by proper
coordination with the HR department. Centralized organization with the responsibility to provide
the sales support should be established which will both reduce the cost and improve the quality.
Adequate budget should be provided for demonstration system to be sent to the customers on
trial basis to win the business.

3. As the production department is dealing with the problems of high production cost and low
quality due to the old machines and equipment as compared to their competitors he should
automate the production lines by installing new machines and equipment.

4. And to increase the production efficiency without huge capital outlay short term research
projects should be emphasized in addition to the long-term projects.

5. Proper co-ordination and control mechanism should be established as this is one of the main
causes of the problems faced by the company.