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VSME- A Success Story

Transformation of

Paragon Autotech Products Pvt. Ltd.

Bhiwadi Rajasthan

Paragon’s Business

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OEM

Paragon Rubber and Plastic Parts maker

Suppliers

Customers: Tier 1 suppliers to OEM

• Sona Koyo Steering Systems Ltd.• Metzeler• Delphi• Motherson Sumi

Tier 1 suppliers to OEM

Paragon before starting VSME

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Paragon was making losses for past 2.5 Years

• The environment was dilapidated and dull• Customers were unhappy and wanted to stop

Chairman decided to close the company and brought lock

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But at Paragon when any new improvement initiative was implemented, there was …

Lack of commitment by Top Management

No Training & Skill Building

Excess Control due to Fear of Failure

Worried MD (Son of Chairman) grabbed the opportunity of VSME

Cascading of Mindset Change

External Pressure

Jump into Fishbowl

Internal Pressure

TPM Excellence

Get Confidence

Push by Dr Kapur

External Pressure

Jump into Fishbowl

Internal Pressure

Visible Results

Get Confidence

Push by Sona VSME

Chief

T1

T2

Key Factor- MD is Change Leader

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1. MD decided to lead the initiative

himself. He learned the

tools himself and applied.

2. Focused on whole

business, not only

implementing tools learned

3. Step by step approach Training of VSME at CII office Gurgaon

MD starts teaching what he learned

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Yo One Ceremony

We Found that the Transformation Process has 4 stages

Stage 1 Stage 4Stage 3Stage 2

Tran

sfo

rma

tio

n

Cyc

le

Mindset Change

Cycle

Immediate Result Cycle

Pregnant Result Cycle

Business Result Cycle

Trigger

Here is our findingThere are 4 stages of Transformation

Comparison of Results of Two Types of Approaches

Immediate Results Cycle

Pregnant Results Cycle

Types of Cycles

Time Taken for Results to Materialise

3 months 8 months

ActionAction

Type of Approach

Analysis Based

Approach

Simple Tool Implementation

Approach

Immediate results

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• Space created, no need of new building. Construction stopped.• Money saved from selling scrap used for business

All-round improvement- Periphery

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Before After

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Before

Before

After

After

Pregnant Result

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Apr'11 May Jun Jul Aug Sep Oct Nov Dec Jan Feb0

50000

100000

150000

200000

250000

In-house Rejection Rubber PartsP

PM

Pregnant result cycle starts

VSME Started

Immediate result and Analysis period

Results

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Jun,11 Jul Aug Sep Oct Nov Dec Jan Feb0

20

40

60

80

100

80 83

99

7582

95100 100 100

Delivery On Time In Full (OTIF)

Sona Gurgaon Sona Chennai Sona Dharuhera

%

VSME Started

Pregnant re-sult cycle starts

Apr'11

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

0

10

20

30

40

50

60

70

Sales

Rs

Mn

VSME Started

Pregnant re-sult cycle starts

Apr'11

May Jun Jul Aug Sep Oct Nov Dec Jan Feb

0

5

10

15

20

25

Manpower Cost as a % of Sales

% VSME Started

Pregnant result cycle starts

Sep Oct Nov Dec Jan Feb

0

20

40

60

80

100

120

140

Oil Consumpton

Lit

ers

Pregnant result starts

Results

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Apr'11

May Jun Jul Aug Sep Oct Nov Dec Jan Feb

0

20

40

60

80

100

120

140

Material Cost as a % of Sales

%

VSME Started

Pregnant re-sult cycle starts

Apr'11

May Jun Jul Aug Sep Oct Nov Dec Jan Feb

0

5

10

15

20

25

Inventory

Day

s

VSME Started

Pregnant result cycle starts

Business Result

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VSME STARTED

Sale dropped by 27.9% due to

obsolence of Damper

Results- Overall Win-Win

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Paragon became profit making company

Customers are happy , sales headed to 3X

Paragon suppliers want to start supplies again, give

discounts

Response from Society

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Other VSME owners want to visit and see the

Big change

One of the customers wants to join VSME project for their

transformation

Another company who has seen the change, wants to join VSME project Sharing the success at VLFM

graduation ceremony at Sona in Feb 2012

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Most importantly the relationship with Customer is transformed…

You made me to give up arrogance

Broken problem in small manageable

steps

Motivated to get results

MD of Paragon wrote to

VSME Chief

Thank You for Your Attention

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