Production Incentive Policy

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Sample / Template Production Link / Based Incentive scheme of an Manufacturing Comapny with Plans & Calculation

Production Incentive

INTER OFFICE MEMO

To
The Management Team
Rocket Sales Ltd.
Khapoli
                                                                                                                         
Sub: Production Incentive

RCL has passed through difficult times this year due to the unfortunate fire in the Blast Furnish System, and the breakdown of main LDF. With the dedicated efforts of all, we are coming back to normal. Though the company has suffered huge losses, the Management is confident that we can bounce back within the Jan-Mar qtr.

The new Production Incentive has been introduced so we all focus on the key issues which affect our company’s profits. Our Target is to produce 300000 - 360000 mt of HRC each month with 90 - 95% ‘A’ grade yield.

Presently the SIP problem is hurting both our output and quality. In Feb the ARSENAL team is visiting to guide us on the best solution. The repaired Blast Furnish system is to be installed in mid Feb, which will increase our line speed and hence output by 150000-200000 tons.

In Jan we produced 100000 mt of HRC Coils with 80% ‘A’ grade yield giving an incentive of Rs 7500 (compared to Rs 4500 as per the old incentive system). About 20000 mt HRC Policing was lost due to machine breakdown. We can recover this by Policing the backlog in Feb.

Hence we can plan to produce 300000 mt of HRC board in Feb. And through proper planning, try to achieve 90% ‘A’ grade yield. At this level the production incentive will be Rs 15000. The enclosed chart gives details.

LET US ALL WORK TOGETHER to improve the plant output and quality yield. Apart from getting more money for ourselves, we shall contribute in a big way to increase the viability of our Company.

All the Best !



ANIL KAPOOR
DIRECTOR




Production qty MT
`A’ Grade
Incentive Rs. pm
TARGET
-
-
-

January actuals

-
-
-

2 days Policing Production loss

-
-
-

Speed increase due to New LDF system

-
-
-
FEB Plan
-
-
-
-

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