A spare parts manufacturing organization – factory located in Okhla, New Delhi- (80 core employees and 50 non core employees, approx. turnover 150 Cr)


Problem Areas

• Plans for expansion, investment in a new factory and machinery- hiring of 35 new employees who require training.
• Redeployment of old employees for training purposes and the need to form cross functional teams
• The need for flexibility and improved communication in a hierarchical organization structure- minimal middle management
• Employee demands on an increase requiring cost management in terms of employee compensation- retention and loyalty programs for experienced employees
• Maximizing workforce productivity to obtain fast returns from investments made in expansion

Current Situation Analysis

• Current organization structure capabilities in redeployment of workforce
• Ease of communication
• Current compensation structure and loyalty/ benefits programs
• Employee skill level and qualifications
• Appraisal techniques and results
• Current workforce productivity level and methods of gauging productivity
• Management vision in terms of expansion investment and customer demands
• Competency of management identified employees who can provide training to new ones

Findings

• A hierarchical organization with strict reporting structure cannot allow for increased communication across functions
• The management identified trainers among current workforce required an agenda, documents, training material and timeline with deliverables
• Current compensation structure and employee loyalty/benefits program not standardized or performed in an ad hoc manner
• Productivity of the workforce measured in terms of ‘completed works per day’ but no internal benchmarking set to compare productivity of an employee with the maximum productivity levels
• No appraisal methods in place- incentives given in an ad hoc manner depending on the number of extra hours put in by employees
• Management vision has taken into consideration current economic conditions and the impact on demand- however infrastructure and manufacturing industries still have high demands for spare parts and components. Demand is still high

Recommendations

• 3 permanent workforce teams (core and non core) with a supervisor as a team leader of workers. e.g. for welding works, fabrication and assembly.
• An agenda spreading over a2 months for training purpose was created. 5 selected Trainers from within the organization were given timetables to devote 50% time to training and 50% time for current roles and responsibilities. They are to train the 35 new employees.
• A 9 man team of multi tasking workers (core) were identified- workers skilled in all three divisions- fabrication, welding and assembling. They are to be deployed to work on specific target oriented projects under different supervisors in both factories.
• On the basis of the highest performer in all three divisions ‘finished work per day’ and an average of finished work taken over a period of 30 days helped us in setting production targets for all three divisions.
• Incentives were paid out on the basis of- number of extra hours and finished components in the extra time.
• The need for middle management for ease of cross functional communication helped us in identifying 2 employees who will act as managers in the 2 different factories supervising permanent teams. While a 1 new manager was recruited to supervise the mobile team.
• Each manager was required to plan quarterly targets for all three divisions and the mobile team would be deployed on request when ever required.
• Employees under training were required to put in ˝ a day of work in practice so as to maximize time usage.
• The managers would be responsible for motivating and pushing towards targets as well as creating a status report at the end of every working day. Reporting need not be strictly documented but documenting work in progress and finished goods is a key factor in tracking productivity.
• A monthly report on progress and a systematic method of inventory management is required. Procurement was being done on a needs basis but VNV intervened and has suggested the standardization of products in the organizations portfolio for ease in procurement of raw materials which are daily requirements.
• A loyalty / benefits program for employees who have been in the service of the organization in excess of 5 years and more is being considered. The retention of experienced workers through bonuses or promotions as per performance as well as number of years in the service is a must.

At Present

The 6 factors mentioned under Findings have been implemented with minimal cost and great success.

We are at present in the process of standardizing products in the company portfolio and creating a systematic inventory management method. VNV has suggested using 4 internal employees in the 2 different locations to manage inventory and report directly to upper management. It is yet to be decided.

A Loyalty and Benefits program is being designed as per management criteria's as well as the number of long term employees in the organization. It will be implemented as per the VNV roadmap charted out for the organization.