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2015 TOCICO International Conference

Transforming Industries Track

Rakesh Markhedkar

Bajaj Electricals Ltd.

Bajaj Electricals Ltd: Delivering Large Infrastructure Projects on Time
September 8, 2015

Bajaj Electricals Ltd. established in 1938, is a pioneer in electrical home appliances, lighting and luminaires business with an annual turnover of Rs 3,500 Cr ($600 mn). Over the last 75 years, it has progressively diversified into turnkey project contracts involving Power Distribution and Transmission Line Towers (TLT) by establishing a new SBU for Engineering and Projects (EnP). While the power distribution projects are working on rural electrification, the TLT projects cater to connecting power transmission grids across India – connecting power generating plants or sub-stations.

Most of the transmission tower projects and power distribution projects in India are grossly delayed. This was true for Bajaj Electricals Ltd. as well.The industry ascribes the cause of these delays to the necessity of extensive coordination and cooperation between various stakeholders like state owned companies, individual landowners and contractors. This leads to stand-offs on critical issues like ROW (right of way), design, land acquisition, environmental approvals etc. and consequently to unpredictable time overruns. Once projects are delayed, more working capital is needed, increasing the cost of the project. Therefore Bajaj Electricals had to contend withcost over runs, erosion of profit margin, and late delivery penalties for nearly every project.

The objective of TOC implementation was to identify the wastages of time and capacity under the control of the company and plug these wastages and help the company complete projects within budget, and on time.

Core Conflict:
The conflict for the company in both TLT and Power Distribution projects was choosing whether it should maximize billing (or tonnage) or meet immediate site requirements. Since focus was on maximizing billing/tonnage, major items of high value was manufactured or sourced and dumped on site while minor items required for completing the projects were lost from the company’s focus. This mismatch of items meant that while the company was able to book sales, the sites could not be closed without considerable delay and cost overruns.

Solution Deployed:
WIP control: The number of work fronts was restricted. In the case of TLT projects "string-able lots” or cluster of small stretches that need to be stringed in a sequence are identified. The focus was to complete each stretch before the next is opened. In the case of power distribution, one village was completed at a time.

Full kit: Before start of the project, it is ensured that all clearances for the part of the project being undertaken are in place. Further, the projects are now supplied complete assortments required in the immediate future as opposed to supplying material to get tonnage. This ensures uninterrupted work, faster project completion and thereby maximum billing.

Norm management: Norm management was undertaken for control over inventory at site -from LOA to billing. Norms were set and items are made available at site based on priorities assigned in the Buffer Penetration Report (BPR) which indicates the extent to which inventory has been consumed. Billing is also as per full kit defined in BPR i.e. once all the items needed to start work have reached the site.

Flow meeting: Flow meetings are held daily to enable issue resolution and thereby faster financial and operational closure of projects

Post implementation the following results were achieved:

  • Managed to complete & handover old projects, which were open for a very long time.
  • Current projects are all running either ahead of schedule or on schedule.
  • Lead times for project completion reduced by as much as 50% compared to the original lead times (before TOC implementation) and as compared to existing lead times of most of the competition.
  • Set new industry benchmarks by completing most projects ahead of contractual dates.
  • The company became the first in the industry to claim incentive (for early completion) from the customer in power distribution projects.
  • Sales increased dramatically (as much as 236% in power distribution projects)
  • For all the new projects where the solution has been deployed the working capital turns have improved to 2.1 from previous turns of less than 0.8.


Norm management using BPR: For the first time a distribution solution has been implemented along with CCPM in a project environment. Material was controlled by setting norms and putting the work sites on continuous replenishment.

RAKESH MARKHEDKARjoined Larson and Toubro, an Engineering Conglomerate, as Graduate Trainee Engineer. With L&T’s structured training programme for GETs, he got exposure to various functions e.g. Tendering, Marketing, Engineering, Procurement & Erection + Commissioning during his tenure of 13 years. He got recognition as a member of "Top Talent Pool” from the L&T Management

He has the experience of handling wide spectrum of projects including EHV Transmission Lines & Sub-stations, Power Distribution Projects, Thermal Power Plant & Cement Plant - up to 7500 Tons / Day capacity on turnkey basis.

He has international exposure in Middle East & New Zealand for Power Generation & Transmission.

In his career journey of last 21 years, he has held various positions including: President, Bajaj Electricals – EnP BU; CEO, ERA Group – Power EPC; CEO, EPC – KEI; and CEO, Projects – EMCO.

Details of Education:

  1. BE Electrical Distinction – Bhopal University
  2. PG in Management System – BITS PILANI
  3. PG in General Management – IIM Bangalor3

Few Milestones:

  1. In 2008 he was designated as youngest CEO of Power Infra group while working with EMCO.
  2. Implemented improvement programs e.g. six sigma, TQM, Quality Management, ISO etc. Got recognition for an effective implementation of six sigma in a Bangalore based firm.
  3. In 2009, he was recognized by Times Of India with a "Young Achiever Award”

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