Dear HR folks,
I have been working in a heavy construction equipment manufacturing company (OEM) as a corporate HR having employee strength approx. 3500 employees including contractual workers. I have bee asked by the management to prepare the trend of management to staff ratio in manufacturing industries in India.

Could you please help me to prepare this ratio in the manufacturing sector?

e.g Sr. level Management ratio
Middle level management ratio
Junior level Management ratio
Staff ratio
Contractual workers ratio

Looking forward to hearing from you soon,

Regards

From India, New Delhi
Dear A. Abhivisit,

There is no standard formula for the Staff: Managers ratio that works for all types of manufacturing companies. The total staff depends on the following factors:

a) The level of automation in the production processes
b) The number of production processes involved in the production
c) Methods of scheduling used in the production processes
d) The machine downtime because of stockout (of the material)
e) The machine downtime because of the poor quality of the material
f) The machine downtime because of the curative maintenance
g) The machine downtime because of the preventive maintenance
h) The number of components produced in-house
i) The number of components purchased from the suppliers
j) The turnaround time for the final assembly of the finished product
k) The time spent on reworking
l) The time spent in QC in the intervening stages as well as at the final stage
m) The competence of the production staff (please note, I am saying "competence" and not "experience")
n) The level of education of the staff
o) The Operations Research (OR) techniques used in the entire company in general and in the production department in particular
p) Is the "Quality Management" philosophy of the organisation or it is just lip service?
q) The overall organisation's culture of the company. Are the policies people-centric?
r) The overall interpersonal environment in the company? What is the level of rivalry amongst the departments or the managers?
s) The level of coordination amongst the Production, Purchase and Sales department
t) Is the labour union dormant, active or hyperactive?
u) The level of empowerment of the supervisors, managers in your company?
v) The level of bureaucracy in your company. For how much time an average manager has to wait for getting approval?

The list of the points is exhaustive. However, if one were to study the systems and processes of your company, the above list will get still longer. Against this backdrop, deciding the Staff: Managers ratio is very difficult.

So what is the solution? The solution is not to worry about the Staff: Manager ratio but to measure:

i) The costs and ratios associated with the production, purchase and quality departments
ii) The turnaround time of the processes for the production, purchase and quality departments

Your goal should be to:

iii) Optimise the costs
iv) Increase/decrease of some ratio and
v) Reduce the process turnaround of the processes for the production, purchase and quality departments

Above all, you need to measure and strive to increase:

vi) Multi-factor productivity
vii) Partial productivity, especially the labour productivity
viii) Measure the labour index
ix) Quality-Productivity Ratio (QPR)

Results: - The points mentioned from (vi) to (ix) would require reduction in manpower also. This will reduce your manpower, and it will improve the Staff: Managers Ratio.

The Final Comments: - The staff that you have been given pertains to the Ops Management rather than HR Management. In fact, no single person can handle this activity, but you have to form an "Operations Study Cell" that continuously studies the production and operations processes. To keep your boss in good humour, you may do some work, however, being from HR, you have limitations, and these limitations will cast a shadow on your work. Anyway, feel free to contact me if you wish to discuss this further.

All the best!

Dinesh Divekar

From India, Bangalore
Dear A. Abhivisit,

The ratio of workmen, Staff, Managers of an establishment decided on the basis of requirements of the manufacturing companies. The ratio aspects are different from one to another because of their production process and mechanization involved.

In most of the manufacturing industry a separate department i.e. Industrial Engineering exist to decide the devise efficient systems (i) requirement of different category of workers ( in Roll & Contractual), Supervisor/Foreman, Managers & staff, materials and energy for the plant.

It seems your company does not have Industrial Engineer to asses the work which has been endorsed to you. This is a complex job because the work involves different formula and equation. it would be good to consult a Industrial Engineer or Industrial Engineering Firm for better result with complete data of your plant. If not possible you make the time study and motion study of the process by involving HOD of each department.

From India, Mumbai
Dear Colleague,

The views given by our Colleagues are very valid and very good insights given. It was a good learning for me too. Kindly read my sharing as below in addition to those views and suggestions:

Similarly, you will have your own good insight and expertise in this area of operation technically which will be helpful in addition to the sharing.

As far as Manufacturing Industries are concerned, in my over 30 plus years of HR work in several group companies in Manufacturing, we traditionally follow the pattern of a Pyramid structure. The Ratio of bottom line will be thick whereas once move upward the ratio is thin. In Top most level the number is very much less and countable. As far as cost is concerned the upper layers will be more cost oriented than the lower levels.

In your case where in you have been working in a heavy construction equipment manufacturing company (OEM) as a corporate HR having employee strength approx. 3500 employees including contractual workers. You have been asked by the management to prepare the trend of management to staff ratio in manufacturing industries in India.

e.g Sr. level Management ratio
Middle level management ratio
Junior level Management ratio
Staff ratio
Contractual workers ratio

I strongly believe, out of my personal experience each organization's Talent Count is to be determined only based on internal bench marking and by doing a quick internal Industrial Engineering Study. Whatever sector in Manufacturing when you compare externally it may not be really going to help you as it will be a futile exercise. The main reasons are difference in-terms of :
- Lay out of your Factory/Factories
-Technology adopted
-Production Flow and Process you flow
-Skill Level of the Talents
-Support Technology provided for Business Function ( Digital Operations Vs Manual)
-Level of Automation and use of Modern Production Technology adopted and such other factors

Hence there is no ready made solution to arrive the number but to work internally. I will share how we did long back before several years back and how we approached, which will some good insight to you for your use. More or less we worked in similar assignments and started without knowing the starting end of the thread.

We worked like this in sequence:

1. Formation of TT: Later we formed a Task Team ( TT) involving the Plant Head+ Plant HR Head+ Plant Finance Head + Plant Operations Head + 4 Members from Shop Floor.

2. Mapping Matrix of Work Process (MWP) : The TT visited each machine by machine, section by section, department by department, function by function for 3 months time dedicated and mapped all the Work flow - Level of Automation- Further scope for Automation - Technology and list of Operational Jobs involving Manual work which got further divided into Core ( affecting quality) and non core( not impacting quality)

3. Mostly this was done in simple Excel by one key Engineer after taking inputs of TT and Plant Operations Head - Work Flow involving manual work - Man hours required to complete the task- Manpower required based on the past Production data etc

4. Talent Table : Then the Table - Current Number - Proposed Number for next 2 years - Ambition Number Level 1(Post automation level 1 which are already in progress and in pipe line) Ambition Number 2 ( Post automation level 2- possible future automations)

5. Bench Mark Reference : We also collected the number and ration of Similar Industries through our Manufactures Association for only a reference point or calibration

6. Now the Spread Sheet was ready with all required data

7. Then the Corporate Team and TT sat together and listed the ration and as an out come the ration covered the Brain Work - Execution Work - Manual Work Core - Manual Work - Supportive

8. We had more than 8 to 10 joint meetings and some time we involved Trade Union Leaders also in the sitting and strengthen the spread sheet.

9. Broadly we arrived a ratio based on a concept called " Profit Per Employee" ( PPE) for all levels upto Senior Management starting from so called blue-collar

10. Roughly ( which may be different for your organization) as a joint decision we arrived a number that overall 15% was on the Senior Management Level 35 % in the Execution Level and all On -Roll Executives (We converted all Staff to Executive Level) and these numbers are direct employees comprising Permanent Workmen, Executive and upto Senior Management level. Then the TT recommended 35% Contract Workers and 15% Flexi Staff ( on-call only based on orders for production from Sales Team) This was decided as a midterm solution and the Group wanted to go-in for a full fledged Manpower Bench Marking study involving MNC Consultants who are experts in this area which is still not done I suppose as the cost involved is huge and huge.

11. At that time for that business module of that Unit/ Organization the ratio arrived by the TT was approximately out of 100% of Talent Count the ratio was 25% of Business Functions - Finance, Supply Chain, HR, Administration, QA and similar. Then 75% on the Operation and Sales & Marketing, R&D and new Products which were Revenue Generating Departments. But the real challenge came up later was there were many disagreements from Unit Heads/ HODs /Union and here and there lot of modifications were done to buy their agreement

12. At that time the Units were given target to work on Ambition Numbers constantly and to work towards possible automation by Capex Projects in Production Line to make the work flow simpler/automated.

I also share few good articles related to this subject.

https://www.onlineclothingstudy.com/...ine-ratio.html
https://www.investopedia.com/terms/r...eremployee.asp

To sum up, overall- like a Finger-Print, the Organization under discussion needs to frame internal strategy considering different Check Points like Business Module, Business Objectives, Level of Automation, Nature of Technology, People Philosophy, Short Term and Long Term Business goals, Proposed Future Technology, Industrial Relations , Profit per Employee targeted etc and then work on a sound strategy to arrive the ration/ number in a befitting manner. Another possibility is to quickly check with cluster Industries of similar nature of manufacturing (and if any Employers Association to use for help ) and to collect the ratio/ numbers for refence point.

This will be a very good exercise helping the Business and People for profit and progress
All the Best and God Bless,
Dr P.SIVAKUMAR
Doctor Siva Global HR
Tamil Nadu

From India, Chennai
I am delighted / enlightened by the great minds that have contributed on this issue of ratio. I work in the hospitality sector and not as HR, so mine will be a road side, African let's work entre'. Like Dr Sivakumar, P opined, that what's is mostly adopted a Pyramid, structure. Now in Africa, the pyramid might have a very large top squeezed as Board of Directors, Owners family and Friends, direct and indirect CEO/General Manager Influencers. They might not be in your pyramid, but their consideration as keeps them checked and at bay.

Some top down work place has the General/Top Manager/Owner directly involved in the affairs of the company to the least worker, making less effective the hierarchy developed or used in the system. Like most Assistant Managers are seen as likely replacements for the Managers, so the managers make them as redundant as possible to keep their sits. In some, the Top relays to the next in line, i.e Assistant Manager who also relays downwards till the ground level staff is reached.

In such case, for us its the military sectioning that is most adopted. You have your ground staff with a headman/line supervisor (that will factor the type of work and the capability of the headman) How many can one handle effectively. The the list of headmen report to a superior, if like in your case the manufacture line is divided into several sections/departments, so should the line up be. The next line supervisors might have a manager or senior supervisor they also report to, how many can one senior supervisor / Manager handle.

The head of section now overseas the middle managers and so till you reach the General Manager/CEO.

The office of the Executive is placed as one, irrespective of the familiy/friends/associates interference. And to succeed its better if the General Manager Manages them directly or through an Owners Representative.

Like I said this is out of years of experiences in Africa, where your structure can be changed at will, because of one person can come and add or reduce without recurse to budgets. Again thanks for having me here.

From Nigeria, Lagos
This task is not only of HR.
As shared by learned Members, there are many aspects /areas/ departs are involved, there fore task needs appropriate formation of teams experts in their areas to pour in the the needed inputs in terms of manpower, resources, and ability of the company to invest on providing resources for automation/ technology and expertise required to maintain the up graph for at least next fifteen years.
It Also should include Business continuity management systems and procedures to ensure sustenance even in emergencies.
As such I agree that simple Pyramid hierarchy structure works and the ratios can be adapted but best results can be achieved through study and inputs in respect of what business the company is doing. what are their further short and long term goals, how much how qualitative expertise is required. Resources investment and inventories. Production Flow chain and many other resources that may be required to be available and therefore considering all these and manay other factors One can arrive at what would be the ratios of Human resource required from top to bottom to manage a organization with best of planning and outcomes for next xx years.
Yes, I suggest a reference study of similar kind of study would be of great help.

From India, Vadodara
In one of the Shock Absorber manufacturing Factories, where I was on additional responsibility, for some months, due to different exigencies. The Factory was a assembly unit, from beginning to dispatch, by a small groups No supervisor inside the shop floor. Only one Engineer each for Electrical, maintenance and quality.
There was a separate office for procurement and marketing and the part number were given on the work spot by loaders, on ‘just in time concept’. Dispatch from the factory to external customer also, was also on the same concept.
The workers have been well trained in multi jigs and fixtures operating concept, and capable of working in any parts of assembly sections. There were several line numbered, and each line was responsible, for the group line output, through one of their senior member (Team Leader). He is being identified by different colored ID card. The supply from one line to his customer is based on cycle time fixed, by external Industrial Engineer study and accepted by the Management. One line pushes the trolley of the assembled unit, to the next line / group / customer, for further assembly. If any delay in one line, may be for want of particular part number or fixtures repair, or stoppage if particular line on quality reasons, the recipient group, having pushed his assembled parts to his customer /next line, will assist his supplier line for correcting and pushing the backlog. Every assembly line has ‘supplier and customer concept’. Every line is also responsible for the quality of the assembled part, as each line has quality check instruments also.
The output all groups and the team including the package, shall be assessed as part of incentive points / factor for the day’s production, calculated for 26 days per month.

From India, Madras

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