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Transcript of Greenply
![Page 1: Greenply](https://reader036.fdocuments.us/reader036/viewer/2022082712/563dbb34550346aa9aab2877/html5/thumbnails/1.jpg)
Greenply Industries Limited(GIL)
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What is GIL?
• Greenply Industries Limited (GIL) is India's largest interior infrastructure company.
• Listed with the National Stock Exchange (NSE) & the Bombay Stock Exchange(BSE), it has a net consolidated turnover of ₨ 2044 crores for the financial year 2012–2013.
• Greenply primarily manufactures various infrastructure products such as plywood, decorative laminates & medium-density fiberboards(MDFs).
• For this presentation, we have chosen Greenply’s plywood business. We studied the annual reports from 2010-2014.
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Identify a key Operation Strategy Decision made during study period.
• Greenply’s main strategy has been to procure raw materials easily.
• From 2010-2012, to facilitate the easy access to timber & chemical resins, company introduced an open market system, making it easy for farmers & contractors to market their product to Greenply.
• They also establish a captive resin manufacturing facility to protect itself from price volatility & reduce costs.
• Last year, the company decided to invest in timber plantation cum agro-forestry model across India to enhance raw-material sustainability, reduce logistics costs & graduate farmers from subsistence to commercial planning.
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2010-2011 2011-2012 2012-2013 2013-20140
200
400
600
800
1000
1200
768.32815.58
940.17
1037.3
Net Sales(in Rs. Crores)
Net Sales(in Rs. Crores)
The official figures of Greenply of their net sales
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Explain the basis of above decisions.
• The most important operation for Greenply in its plywood business is Raw Material Procurement.
• It was a challenge, owing to spiraling international prices on one hand & scarcity of land on the other.
• Recently, there were increasing signs, as well, that Myanmar, their single largest raw material provider, will restrict the export of unprocessed timber, which is where their last decision came about.
• They will also have a lot of advantages with this:-
1. The cost of plantation timber procurement is lower than that of timber derived from forests.
2. Plantation timber has demonstrated its suitability and commercial viability for most plywood applications.
3. All of this will lead to lower raw-material costs and enhanced margins.
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2010-2011 2011-2012 2012-2013 2013-20140
10
20
30
40
50
60
70
80
41.6243.59
70.02
64.7
Profits(in Rs. Crores)
Profits(in Rs. Crores)
The graph shows an increase in the profits every year. This reinforces the fact that theirmeasures of getting plantation timber have been successful. However the sharp declinein profits in 2013-2014 could be attributed to the decision of the Myanmar governmentto restrict the export of unprocessed timber.
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Identify the process structure for any two stages of manufacture of a product of chosen
business. The first process we have chosen in plywood manufacturing is called Cutting and
Stacking. In this process, large logs of wood are cut into 8’ x 4’ size sheets. The sheets are then glued and pressed together and sent to peeler. As the sheet emerges from the peeler, it is scanned automatically and then stacked & prepared for transferring to the drying oven.
This is a batch process. • “It has a fixed set of activities that tend to be in a line. • The process has low flexibility. • The activities, while in-line are disconnected from one
another. • Product is produced in batches.”
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The next process we chose is called Trimming, Sanding and Finishing. This is the last process. It involves trimming, sanding and finishing the sheets. This process also takes the sheets down to the proper size demanded by customer. This is what makes the final smooth edges. The finishing involves testing and grading.
• This is a continuous flow process.• “It has a fixed pace and a fixed sequence of activities.• Rather than being processed in discrete steps, the product is
processed in a continuous souls.• The flexibility is very low. The direct labor content and
associated skills are also low but overseeing sophisticated equipment in the process is high.”
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Is the sales growth for the above product based on an “Expansionist” or “Wait-and-see”
capacity planning strategy? Why?
• The sales growth for the Greenply plywood has an ‘Expansionist’ capacity planning strategy.
• This is so because “economies of scale” effects on their product is high because the greater the quantity of plywood is produced, the lower will be the per-unit fixed cost.
• Greenply will have very infrequent jumps in capacity because there would be constant supply of their raw materials which is timber in this case.
• Also we see that they are planning to establish facilities like resin facility and to invest in timber plantation cum agro-forestry.
• This does not conform to the very basic “Wait-and-see” capacity planning strategy
• Also Greenply is not looking for short-term gains but is investing for long-term benefits. This proves that it has an “Expansionist” capacity planning strategy.
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References
• http://www.netmba.com/operations/process/structure/
• http://www.greenply.com/images/pdf/Annual_Report_2010-11.pdf
• www.greenply.com/images/pdf/Annual_Report_2011-12.pdf
• www.greenply.com/images/pdf/Greenply-Annual-Report-2012-13.pdf
• www.greenply.com/images/pdf/Greenply-Annual-Report-2013-14.pdf
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Created by-• Abhishek Mohan• Megha Gupta• Shrey Saxena• Siddharth Chaudhary• Mohit Bhandula• Prateek Aggarwal• Achyut Razdan