Product Overview

Dr. Nalin Shinghal was selected for the post of Chairman and Managing Director (CMD) of Central Electronics Limited (CEL) in the year 2013. He was contended of having led the turnaround of CEL. CEL was a loss-making Public Sector Undertaking (PSU) with many problems of discipline, operational inefficiencies, aggressive unions, skill gaps and high employee cost. In the past, restructuring of the company has not led to performance improvement. CEL had already eroded its net worth by nearly 90% and was merely INR 66 Million as against a paid up capital of INR 558 Million. A glance at its balance sheet showed a large number of qualifications reflecting health of systems in the company. CEL was established in the year 1974 as a Central Public Sector Enterprise, under the Ministry of Science & Technology, with an objective to commercialise technologies developed by National Laboratories and Research & Development Institutions in the country. It had, in subsequent years, taken up the manufacturing of a wide range of products in collaboration with various labs & institutions. CEL initially started off with manufacturing of Ferrites as its primary business. It soon started two key business verticals, Solar Photovoltaics (PV) and Railway Signalling systems. CEL operated in a business environment characterised by assured demand by Public Sector Undertakings (PSU). The cleaning of its premises was his first step in the first phase of turnaround. It helped in developing confidence among people for undertaking bigger important changes. Subsequently he took initiatives to arrange working capital, reduction in interest rate, improving the upkeep of the plant, arranging a team to improve the morale and competency of employees. He changed the structure of the company and formed divisions with clearly identified chain of accountability. Internal governance was strengthened by introducing ERP and strengthening the key processes. There were instances of material/equipment not returning back to the plant, once given out on loan. Accounts were not updated. He undertook initiatives to streamline both the practices in the company. In the second phase of turnaround, initiatives were undertaken to articulate company vision, strategic direction and development of capability for undertaking strategic transformation. To strengthen HR systems, he took help of a retired top ranking HR professional of the Indian Railways. Business teams were reorganised. Company also streamlined manufacturing processes to address quality and productivity challenges in a couple of shops. To sustain the performance of the company, diversification initiatives were undertaken.

Learning Objectives

Sensitize participants about industrial Relation challenges of turnaround of production units. Make participants understand the importance and dynamics of managing external stakeholders. Make participants understand the causes of firm's decline and turnaround steps.