You have joined as the Operations Manager of a large multinational company ABC Company that produces products for the Textile industry. Your company is a key Tier 1 supplier to the manufacturers of garments and footwear for leading brands. 
Your role requires you to take care of the operations of two manufacturing plants situated in Bangladesh. One of the two manufacturing plants is an upstream, captive manufacturing plant for a key intermediate for the products produced by the company. The other one is a customer-facing manufacturing plant, i.e., produces finished goods that is then sold to B2B customers who use the products to manufacture garments and footwear. You have been with the company for a month and are trying to get to grips with the situation in the Bangladesh operations.
The operations in Bangladesh have a long history of problems with poor business metrics across the board. You have been told that your key KPI in the next 3-12 months is to get the operations back on track, but by taking an end-to-end view of the business. You are part of the country leadership team and report to the Managing Director.
To begin with, you chart out a plan to review metrics and numbers that are drawn out of your previous experience. You also realize that this company – ABC Company – has huge strengths in the area of access to lots of data. You also have access to a bright young team member who has the skills to quickly put together various analysis of metrics and indications across the business. In a week, you are given a full report that has the following details for the customer-facing plant manufacturing finished goods. 95% of products sold to customers are manufactured in-house, hence you decide to focus on those.

Diagnostic Metric (Year 2022)	Average/ Full Year	Highest	Lowest	Internal best in class average
Finished Goods Forecast Accuracy	45%	70%	20%	75%
Finished Goods Forecast Bias (-ve indicates over forecasting)	-15%	+20%	-35%	+/-3%
Service levels for sales orders (Fulfilment on time in full)	55%	80%	20%	90%
Order lead-times Days (lower is better)	20	35	9	5-6
Availability for MTS materials	60%	68%	50%	90%
Adherence to broad Master Production schedule	72%	81%	65%	95%
Average Production lead-time	10	15	6	Avg 2, 95% in less than 3 days
Production lead-time adherence to standard (standard lead-times already higher than benchmark for this plant)	50%	65%	35%	95%
Production quality (Right First Time)	90%	86%	94%	97%
Adherence to production sequence on work centre	67%	75%	55%	75%
Annual sales to plan	80%			100%
Gross Margin	15%			45%
SD&A (Sales, Distribution & Admin expenses)	20%			12%
Conversion costs (vs benchmark)	105%			95%
Energy/ Water costs per KG of prodn output	$1.1			$0.63
Production output vs S&OP monthly plan	90%	99%	79%	99% to 101%
Manufacturing Headcount per KG of Finished Goods produced (Direct+Indirect)	5			3
Sales order cancellation value (% of total sales)	4-5%			Less than 0.2%
Production order realizations				
Rework success rate	50%	90%	25%	75%
Warehouse shipping reliability	93%			98%
Purchase Delivery reliability	60% on time, 35% late by more than a week, 10% late by more than a month	85%, <5% late by more than a week
Purchase order creation times (Days)	5	20	2	1-2
Instances of repeat production of small MTS lots within a month (except bulk A category items)	50%			15%
Min lot sizes for production execution for stock items	Not implemented			Implemented for all stock items and reviewed every 3 months
Factory Capacity utilization	65%			85%
No of different products (Portfolio) per $1M of sale	350			150
Percentage of products produced to global company specifications	25%			85%
Industrial Engineering standards for process times, wait times, etc.	Not existent, incorrect Masterdata			95% accuracy, maintained in ERP system
Process capability of key process/ work centres	Cp=0.8
Cpk=0.7	Cp=1.5
Cpk=1.6	Cp=0.4
Cpk=0.3	Cp=2.0
Cpk=2.5
Sales & Operations planning process maturity score (Out of 10, internal audit findings)	2			7
Stock accuracy	95%	85%	98%	99%
Demurrage charges on import consignments (% of sales)	2%	3%	1.5%	<0.1%

Analysis of root cause of service failures (last 3-4 months)
Area	% contribution to failures (OTIF failures)	Remarks
Customer Service	20%	Credit blocks, Customer delivery blocks/ hold after production, change to due dates, Changes to order priority to accommodate other urgencies
Production execution	25%	Delay in production process, Delay in starting order execution, production shortfalls to standard quantity, poor quality (Right First Time)
Production Planning	15%	BOM Component shortages, Capacity constraints
Warehouse Execution	40%	Customers not accepting deliveries, labour shortages, poor picking efficiencies, stock differences

Analysis of sales orders:
Total open orders are $3 Million. $500K of orders are more than 90 days old; some were placed more than a year back.
The company sells 60% from a standard range of products and about 40% of the total volumes are on an MTO basis. For the non-standard products, the operational team had agreed on specific lot sizes that the customer(s) need to place orders in to maximize production efficiencies and minimize overproduction. However, the adherence to this agreement is only 40% of the time, i.e., we seem to be accepting orders for smaller batch sizes as well as non-standard batch sizes 60% of the time.
There are some special customers who work on contracts. The contracts are normally placed at least 15 days before the anticipated date of first supply and 90 days. The customer calls off partial quantities on a weekly basis over the 90-day period. Analysis shows that:
•	Contracts from two years back are still open.
•	More than 50% of the total contract quantities across customers is available in stock but not getting shipped.
•	$200K of orders are overdue and the plant has already produced and holds stocks of the same.
•	Most of these materials are MTO materials that are only sold to this customer(s).
Order cancellations – Around 4-5% of sales orders get cancelled as compared to the global company average of less than 0.3%. Also, clarity is lacking on why these orders were cancelled because there is no communication from the customer asking for cancellations.

Manufacturing process preparation:
As part of a key step in the manufacturing process, the MTO materials need to have a validation of the process parameters for the production ahead of the production order release. This normally takes a day in the other manufacturing plants of ABC Company. At this plant in Bangladesh however, it takes 3 to 5 days, with many materials awaiting manufacturing confirmation of the process parameters for as much as 10 days. There is no data available of the daily output in this area which is handled by a “laboratory” team looking at production planning priorities received from the planning team.

Production Order realizations
Class Interval	Bangladesh Plant	Global Best in Class
<90%	15%	2%
90% to 95%	10%	6%
95% to 98%	10%	10%
Within +/-2%	25%	80%
102% to 105%	15%	2%
105% to 110%	5%	1%
>110%	20%	0%

You delve further into the above to see if these are exceptions for certain products but find that the nos are consistently similar for all class of products produced at the plant – be it standard products, non-standard MTO products, more complicated products/ processes, premium products/ commodities, larger or smaller batch sizes in production.

Production Process Leadtime analysis
Process step	Average Leadtime (Hrs)	Std Deviation	Standard (95% confidence)
1	15	15	9
2	6	9	4
3	11	20	5
4	200	300	24
5	20	35	6
Overall incl wait times	240	300	72

WIP position
Production orders pending ahead of different work centres in several instances. The plant is able to handle about 100 orders in a day. Current WIP shows around 600 open production orders, with about 15% of orders more than a week old and almost 100 orders released more than two weeks ago.
There are also many orders that are urgent and need to be released to the shopfloor for production, but the plant does not have labour or machine capacity or raw materials for the same.

Inventory:
Total inventory of finished goods in the business used to be $2M; this has doubled over the last couple of years as service levels have continued to plummet.
Out of this, $1.5M is in materials which are non-stock and no orders from customers for those materials. $600K is already designated as slow-moving and obsolete after having not moved for more than a year. There is also approx. $300K of stocks maintained as consignment stocks at a couple of customers; out of that, $100K has not moved or been consumed by the customer for more than 6 months. The consignment stocks were put in based on pressure from the customer to hold those stocks with monthly forecasts, but the volumes have not materialized.

Other - Manufacturing:
Except for this bright person who is providing you with data and insights, you do not get clear answers to your questions. People spend time in several meetings all the time and any questions go around for days before an answer is received. 
There are no clear product specifications; ERP data on production process and BOMs are unreliable; there are multiple raw materials of the same type with slight differences and there are several changes to the bill of materials on a daily basis. You have asked around and this is not a problem in other countries.

Others:
You are also surprised to learn/ observe that:
There is a large churn in people including top management over the last 3-4 years.
The underperformance in the business is not recent.
There have been multiple projects that have been run to take corrective actions, but most actions have not stuck beyond a few months.
The team is focused more on answering questions, making PowerPoint slide summaries for status updates on improvements than on actually getting the job done.
The key managers at the plant all live in another city a couple of hours away and are on site only five days while the plant operates seven days.
The local culture is quite laidback, and rarely does he get answers to a question that does not point the fingers at someone else.
Everyone complains about a lot of work pressure, but he sees basic issues not getting addressed and finds few are inclined to taking accountability and getting things done. A lot of discussions in the meeting room do not translate to results outside.
There is lack of awareness amongst his team on what the key metrics and financials mean; even basic concepts are not clear.

Based on the above diagnostics,
Outline your approach, recommendations, RACI, etc and decisions focused in the following areas, with reasons. No generalizations – recommendations need to be linked to data in the case, making suitable additional assumptions, simulations, etc. Logic and detailing is what is expected.
1.	Summary of key problem areas, highlight most important (top ones) – link your hypothesis/ conclusions to data given in the case.
2.	Short-term actions/ recommendations
3.	Medium-term actions/ recommendations
4.	RACI/ Timelines
5.	What does success of actions look like? How would you measure it?
6.	Challenges and Risks to improvement
7.	Linkages to other areas (improvements in one area may not lead to overall improvement due to interlinkages – remember TOC)
8.	Mitigation actions
9.	Highlight linkages to concepts learnt.
10.	DON’T just repeat words from the case. That is not an answer. That is merely stating the case. If the content of the submission is seen to be largely repeating facts, then the submission will be penalized.
11.	Address as many areas with interpretation of the data provided in the case - Demand forecast, Order management/ Customer service, Procurement reliability, Manufacturing Reliability and Speed, Adherence to processes, Sales processes, Manufacturing Right First Time, Order Realization, Manufacturing Reliability, Data consistency, Finance processes, stock policy, Planning/ Masterdata, Warehouse order management, Human Resources. Please also delineate any broad linkages to other areas that may not be listed above.