Page 2: Re-structuring
During 1994, the main board of R Griggs Group Ltd decided that a major re-structuring of its shoe making business should take place. Its aim was to improve control over its operational and selling activities across the world. Difficulties had arisen due to the popularity of the brand which far exceeded the Group’s manufacturing capabilities. This re-organisation, which took place in April 1995, resulted in the consolidation of all manufacturing companies under the name of ‘R Griggs & Company Limited’ with all of the sales and distribution being controlled by ‘Airwair Limited.’
This case study focuses on the follow-up to this major upheaval. At an operational review in August 1995, a report showed that considerable confusion had followed the reorganisation. Key issues included:
- unclear boundaries between managers and departments
- inadequate systems and the absence of meaningful management information
- lack of encouragement for local management to take ownership of issues under their control
- lack of visibility of the number of orders and the available production capacity.
An operational review took place after the major re-organisation. Although it identified the main objectives of the re-organisation had been met, the review showed serious problems within business processes at operational levels, such as adverse effects on customer service, staff morale and general management control.
Re-structuring was always going to be a challenge for the R Griggs Company. In a constantly changing environment, it was important to develop the business so that products would be delivered on time. If it failed to deliver on time, the Company could lose business, despite the massive popularity of the brand. The Company’s new target markets demanded flexibility and speedy response - just-in-time supply (i.e. goods produced and delivered just in time to be sold). Such a system had to be geared to response. This required state-of-the-art information systems so that promises made to large retailers could be fulfilled. It was, therefore, necessary to link all parts of the business process, irrespective of the size of the operation, at all levels, thus allowing data collection and evaluation.
Technology was a key element of the process re-engineering, as it allowed the R Griggs Company to improve its organisation and its response. Following the organisational review, it was vital to ensure that information technology was working to the best commercial advantage of the Group. Senior Management’s major concerns were:
- late deliveries
- order process reporting
- supply chain management
- production and capacity planning.