From loss to profit ALIMCO’s journey through the COVID pandemic

The COVID-19 pandemic has negatively impacted businesses around the world. However, as it says, “change is the only constant,” companies that have embraced technological solutions and gone digital have managed to stay afloat in these troubled times. Artificial Limbs Manufacturing Corporation of India (ALIMCO) is one such organization. DR Sarin, Chairman and CEO, ALIMCO, highlights the strategies and means that allowed ALIMCO to operate successfully even during the pandemic at Elets Innovation Talk with Krishna Mishra from Elets News Network (ENN).

What were the challenges you encountered during the first and second waves of the COVID pandemic? How were you able to ensure that employees are sufficiently motivated and aligned with company goals?

The COVID pandemic is a global challenge. ALIMCO was one of the organizations affected by the pandemic. Our primary method of distributing products is through camp activities where we first assess people who usually gather in large numbers, and then distribute aids and assistive devices. The advantage of this format is that we can disseminate the information about the diet to the masses and the quality of the products distributed can be seen by people.

The last camp we organized was in 2019, when Prime Minister Narendra Modi visited Prayagraj camp. It was a mega camp organized for a lakh who received aids and assistive devices. The camp took place on February 29. However, after COVID, our operations were severely affected due to out-of-camp activities and necessary preventative measures like social distancing. In addition, production at ALIMCO remained closed for 63 days in 2019 and again in 2021, production was suspended for almost 70 days due to containment.

In 2019-20, before the plant was closed for 63 days, ALIMCO achieved a record turnover of around Rs 341 crore. However, in the first quarter of the year 2020, we were only able to register Rs 78 crore. There was an operational loss for the company for the first time, at least during my tenure. However, we put our socks back on and in six months we were able to register a turnover of 268 crore and a profit of 56 crore.

Due to the second wave of COVID, operations were severely affected and we saw a non-production period of approximately 70 days. However, we were able to record a turnover of around 250 crore later. I feel compelled to say that we were able to undertake aggressive operations to get through difficult times and survive the pandemic. Another important aspect is that we have not laid off any employees. Even when the business was closed, we paid full salaries to all of our employees. Also, I made sure that all of our employees were vaccinated. Other than that, in the event that a COVID-related issue arose with an employee, a task force was formed through which we were able to help whoever needed it. Unfortunately, we lost two of our colleagues during the pandemic.

Due to COVID, this was the first time you suffered an operational loss, but thanks to your tireless efforts, you were able to turn the tide in no time. What has been your mantra for success?

I believe that people are the greatest assets of any organization, but sometimes they become difficult to manage. I feel lucky to have a great team working for ALIMCO.

In terms of the success mantra, I would say, we designed new standard operating procedures (SOPs) as soon as we could and shared them with the department for their approval. Employees have been informed that physical camps will no longer be organized but that a similar activity will be carried out via online modes. We have also decentralized the distribution network. We used to call people at the campsite and now we reach out to people at their doors to provide assistive devices.

Also read: Building accessible, inclusive and resilient Indian cities

In addition, we have two types of camp activities – the first one where the number of people is 1000 or more. In such camps, ministers tend to participate and interact with people with disabilities. Then we have camps where the participants are less than 1000. In such cases, we have organized small camps where we were able to distribute aid and assistive devices, provide consultations or any other service to the population and also generate income.

Elaborate on the scope of ALIMCO’s activities and how it has been of service to society as a whole?

ALIMCO has been in business for over 50 years, since our inception in 1971. We are a major executing agency of two government programs – the first is the ADIP program (Assistance to Persons with Disabilities for the Purchase / Installation of ‘appliances / appliances) and the second is Rashtriya Vayoshri Yojana to serve the elderly of India.

Apart from that, we are also CSR partners of large PSUs. We have a distribution network of dealers. ALIMCO’s only goal is not to make a profit, however, we do not operate on grants and must earn money to continue operations. Our goal is to provide quality aids and assistive devices at a reasonable price.

This industry is represented by two broad categories: high volume and low value and low volume and high value. ALIMCO is part of the first category because the challenge is great. We have around 2.68 crore of people according to the 2011 census, which could be down to four crore by now. We have the challenge of providing aids / assistive devices nationwide.

How can power supplies prevent loss and improve their operations, accuracy and efficiency?

There are three issues that PSUs have faced for a long time. The parliamentary committee also identified these three factors that play a major role in the loss of a business. The first factor is the lack of appropriate technology and diversification. Some examples of companies that have not changed over time or that have worked on innovative solutions could be HMT, BSNL, ITI, etc. It used to be that people would line up to buy an HMT watch, but today we hardly see any watches from the company. Probably a case where the company refused to change over time. The second factor is unregulated labor. We should not hire labor as it becomes a burden on the business. At ALIMCO the turnover was around 150 crore when I took over and in 2018-19 it reached over 300 crore which is a 100% increase. Meanwhile, the membership which was 306 when I joined the PSU is now 284. The third factor is “leadership, transparency and accountability”.

Besides the Indian market, ALIMCO has sought to explore overseas markets. How has the business scenario been so far?

ALIMCO has had its share of ups and downs. It had a good start, but there came a time when the Indian government was planning to shut it down and sell it. At the time, ALIMCO had nearly 1,200 employees and many of them had to wait six months to receive their wages. After hard efforts, the company was back on track.

We were operating a particular factory with a fleet of obsolete, obsolete machines with zero book value on our balance sheets. Therefore, it was difficult for me to stop at the beginning when I joined in 2014. This is why we did not go outside the boundaries of aggressive marketing as it was difficult to meet only the requirements of government programs.

However, we installed a few essential pieces of machinery later, as our first goal is to meet government demands. In the meantime, we have developed a few other sources of income. I’m happy to say that the ratio of government revenue share: non-government was 90:10 respectively, whereas today it is 60:40. We have put in place a modernization project and by March 2022 the construction works will be almost finished and the machines will be installed. We have already started our marketing strategy.

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I had introduced ALIMCO to the embassies of 68 countries with the help of the Ministry of Foreign Affairs and we received a good response. Meanwhile, we also complete the paperwork and acquire certification to export our products to international markets. We also let our machines open in reserve capacity for the work of the private sector. Therefore, we have a good plan ready. We are on the right path.
We are developing products that we will soon launch on the market.

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