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Turnaround excellence (TCIL) case-Case analysis


Tinplate is an environment-friendly packaging material that can be easily exposed to different

can manufacturing process. Tinplate company of india limited(TCIL), operating from Jamshedpur to
produce tinplates for oil can and non-oil can usages. Case speaks of cycle of decline and rejuvenation of
the company first in 1980s and then in between 1997-2002, both recoveries was credited to then MD of
TCIL, R.K. Bhasin and Bushen Raina respectively. Three Major Challenges faced by TCIL in 1997 are:

1) Financial challenges: Company had negligible net worth, and financial institution were unwilling
to support TCIL.
2) Closure of HDP: TISCO was unwilling to continue production of tin bars had to close HDP, but
problem lies in dealing with 3500 employees of HDP plant.
3) Operating ETP and CRM above their rated capacity: These plants were barely stabilized and
have never been operated even close to their rated capacity.
To overcome these challenges, TCIL approached financial institutions for restructuring of the loans,
and they were successful in reducing their cost of borrowing in 1999 from 19.2% to 17%. For closure of
HDP, company decided to reduce manpower through voluntary retirement scheme, it would have to
bear the burden of around Rs. 400 million to retire more than 3000 people. TISCO agreed to provide
loan at 15.5% to implement VRS. By mid Oct. 1999, all but 400 employees had taken VRS, and
company retrenched those 400. Closure of HDP helped company raise cash of nearly Rs. 90 million
through sale of plant and machinery. TCIL also tried to alleviate the problems of employee who
undertook VRS by extending many facilities like free education, subsidized electricity, free medical
facilities, vocational training for younger employees, etc. Senior managers frequently met retired
employees to redress their problems to the extent possible.

For Enhancing capacity utilization of the plant, three major initiatives were taken by TCIL:

a) Competing for TBM award: it developed the system oriented mindset, also targets were
displayed at relevant work places and people consciously tries to achieve those targets.
b) Total Operational Performance initiatives: An independent team was formed to implement TOP,
which linked it with aspirational targets. TCIL implemented suggestion scheme. It received 360
suggestions in 1999-2000, estimated to save Rs. 10 million for the company.
c) Revamping Marketing Operations: Individual zones were made responsible for material dispatch
as well. Later in 2002, TCIL separated sales and marketing to provide adequate thrust in
business development.
All these efforts resulted in increasing cash profit to Rs. 282 million in 2002-03, from the loss of Rs.
270 million in 1998-99