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How I Handled Labour and Supply Chain Disruptions?

Ravichandran Ramachandran

CIRP

Corporate debtor had 17 branches all over India and all factories are labour intensive. In some places, Labour Unions were very strong. The key raw material prices were highly volatile .

 

Promoters and the Senior Officials did not give any co-operation to RP in running manufacturing units. The Promoters instigated Senior employees  and ensured that no cooperation was given to RP. Senior employees in the units were indulging in unethical practices in purchase, transport, selling prices etc.,etc.,

 

The Promoters and the Senior employees instructed (1) the Suppliers not to supply raw materials and (2)  the Customers not to remit any money for their purchases, due to their long association with the Suppliers and the Customers. In addition, the raw material prices continue to be very volatile, and the Customers refused to pay higher price whenever the raw material price was going up.  Last but not least, some of the MNCs/ Large Corporates discontinued their orders , since, this company had gone under CIRP.

 

Solution: As RP, the objectives were (a) to keep the company as a going concern (b) generate cashflows for the organization(c) not to remove any labor.

 

Initially, the units were running as in the past ( as it was prior CIRP) but due to the misdeeds of Promoters and the Senior employees, the Company was running under loss. Hence, we had detailed discussions with similar manufacturers in and around each manufacturing unit in India whether they were willing to take the units under lease.  We could get positive responses for all units and decided to lease all units. This one step solved the problems with Suppliers, Customers ; the employees were gainfully employed; the units were up and running; and cashflow was better.

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