Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

2016

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

Operational efficiency and minimization of losses is a major focus area of any progressing organization that wants to compete in the challenging dynamics of the industry in order to meet its customer demand, neutralize the effect of price increases in procurement of raw materials, its manufacturing, effect of inflation and more importantly to increase its net profit which helps the organizations to invest back in their process and consequently helps them to grow within the industry at a faster rate in comparison to their competitors. Mondelez Pakistan Limited is a subsidiary of Mondelez International Inc. that operates two plants in Pakistan. It is currently struggling to meet its operational efficiency targets set for the year 2016 and more importantly is far behind the regional expectation of 85% Global Efficiency target set by Mondelez Global Supply Chain team. This lag in efficiency has adverse effect on the manufacturing cost and unnecessary breakdowns and losses presents potential risk of not meeting the market demand and affects the overall profit margin of Mondelez Pakistan. As a result, it is critical for Mondelez Pakistan to investigate the gaps and losses behind their operational efficiency and identify sustainable solutions to improve the situation.

When focusing on improving the manufacturing efficiency, organizations must first identify the key contributors to reduced efficiency and the main losses which need attention. This study aims to identify the potential underlying reasons behind the losses which Mondelez Pakistan is currently facing in its manufacturing process through analysis of the five months machine operational efficiency data, financial impact of the losses and a mixed research methodology of interviews with the employees (n=30) and senior management (n=5), focused groups discussion with cross functional teams and questionnaires (n=60) based research with the shop floor staff to develop a cause and effect relationship between the losses and the potential reasons.

Review of data analysis and research results highlights that skill capability and training of the employees along with inadequate maintenance systems are one of the key reasons behind the weak operational efficiency due to which regional expectations are not met but more importantly has a significant cost impact on the overall cost of manufacturing. Results also highlighted that engagement of shop floor team needs improvement along with a clear and transparent reward and recognition program.

Based on the research results, researcher has proposed following set of recommendations to improve the current situation and strive towards achieving the GE targets:

1. Skill Development and Maintenance Program

a. Development of multi skilled employees through a skill development training program

b. Development of Autonomous Maintenance Teams

c. Development and Implementation of Preventive Maintenance Program

2. Implementing a Daily Management System to increase shop floor team visibility of their lines performance, issues and engage them in identifying the solutions

3. Development of a transparent Reward and Recognition program for operators linked with operational KPIs like GE

Pages

66

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