Everyone present in the meeting, including the GM, was highly optimistic and expected a significant increase in the output levels. However, contrary to their expectations, the performance review of EFMD revealed that the production level for Q III had gone down by 2.5 per cent compared to the levels for Q I and Q II of the current financial year. (Refer to Exhibit 1 for production details.) Disappointed and infuriated, Reddy told Gagan Dixit, Head of EFMD, to find a solution within seven days and ensure an increase in the production level.
COMPANY BACKGROUNDDelta Engines Limited, an Indian diesel engine manufacturing company, with headquarters in Chennai, Tamil Naidu, had established itself as one of the leading diesel engine-manufacturing firms in India. Various earth-moving equipmentmanufacturing companies like Alpha Motors and Beta Earth Movers used engines manufactured by DEL.The manufacturing facilities at Chennai were distributed in two main departments, namely, Machining Department and Engine Assembly Department. The Machining Department was further subdivided into three departments, namely, EAMD, ECMD and EFMD. (Refer to Exhibit 2 for departmental structure.) EAMD manufactured auxiliary components of the engines like pistons, gears, nuts and bolts, fuel valves, rocker arm, and flywheel. ECMD produced critical components of the engine like camshaft, connecting rod, crankshaft cylinder head and oil sink, whereas EFMD produced the most important and critical part of the engine-the engine frameon which all the auxiliary components, critical components and other standard components were mounted. All these machining departments had separate and