Synopsis: Communication For Productivity
Letters written to some 7500 Workers / Managers /
Union Leaders, following a period of strike / Go slow / Murders (1979 -
1987), at Mumbai factory of Larsen & Toubro Ltd. This direct / open /
honest communication led to a remarkable atmosphere of trust between
Workers and Management, which, in turn, increased productivity at 3% per year
(ave).
|
13 Feb 1983
To:
Dear Mr.
THE BATTLE
OF SURVIVAL
Sub: Growth,
Survival And Productivity
This is with
reference to the discussions I had with you, & some of your Jt. Secretaries
on 10th inst. when I took the opportunity of briefing you on the Management's
decision to wind up the Company's activities in the area of Packaging Machinery
manufacture and the consequent task of re-deployment of the persons concerned.
In my recent
letters to BKS Union, on the subject of 'Productivity' I have mentioned about
fierce competition to many of our products and the consequent threats to their
survival. When one or more competitor offers better-quality products or cheaper
cost products (or both), we lose our market-share and production-volumes go
down.
On the other
hand, costs keep on rising -
- the material costs
- the labour costs
- the financing costs etc. etc.
Rising costs
force us to raise our selling-prices and we lose still more orders.
This vicious
circle goes on and on;
Sometimes we
succeed in breaking this circle by raising productivity and manage to survive
that product.
But
sometimes, we fail and must give up the manufacture of such a product !
This has
happened to us several times in the past. For example, in the past, we have
been forced to stop the manufacture of
- mild-steel vessels
- sheep-foot rollers
- domestic switches
- connectors
- marine junction-boxes
- diamond & T.C. bits
- drilling equipment etc., etc.
On several
occasions, we have come very close to stopping manufacture of petrol-pumps.
And based on
similar considerations, recently we decided to stop the manufacture of
'Packaging Machinery'.
One more
product has fallen in the 'battle of survival' !
This means
that, the group of persons who constitute the Packaging Machinery Dept. will be
required to be moved to other Departments/Units in order to save their jobs.
In a
language that we - you, I, workmen - all understand, this means that we
must-now re-deploy these employees in other areas of our operations.
You will
recall that when we discontinued the manufacture of drilling equipment in Madh
Works, with your cooperation, we were able to re-deploy over 250 workmen in
other areas and thus, we were able to save their jobs. As compared to the
re-deployment of Madh workmen, the re-deployment of Packaging Machinery Dept.
will not pose much difficulty considering that only 22 workmen are involved.
The names of
the persons affected are given in Annexure 'A'.
As mentioned
during our meeting, we have started working on the preparation of a
re-deployment plan and I shall make the same available to you within 10-15
days.
I wish to
thank you for the understanding shown by you and your colleagues during our meeting
and I feel confident that, with your cooperation, we will be able to carry out
the re-deployment exercise smoothly.
We must
however, look beyond the immediate problem. By a copy of this letter, I am
requesting the Group General Managers to let me know if, in our other
operations, there exists areas of 'weaknesses/competitive threat' where we may
run into a similar situation in the foreseeable future. Early identification of
products which we may be forced to discontinue to manufacture in the months and
years to come, would help the company do some forward planning with regard to
the manpower that may be rendered surplus. It would enable all of us to do some
thinking regarding the 're-training' of such employees and their most effective
re-habilitation.
With kind
regards,
Yours
sincerely,
H.C. PAREKH