Seeking Advice on Departmentalization for Our Family-Owned Footwear Business Transition

Dear Senior/OD Specialists,

I need your valuable suggestions regarding corporate restructuring.

We are an SME with 600 employees in the leather fashion footwear manufacturing industry, operating as a family-owned business. We intend to transition to a professional departmentalization structure with the objective of enhancing simplicity, coordination, and responsibility.

I am seeking insights on the best operational practices for the latest departmentalization trends in manufacturing firms. I have a few questions for which I would appreciate your assistance:

• Production Planning & Control (PPC): Should this function operate separately or be integrated into the Production department?

• Raw Material Stores: Should this function operate independently or be part of the Purchasing department?

• Finished Goods Warehouse: Should this function fall under Stores or be integrated into Sales & Distribution?

• Imports: Should the import function collaborate with Export or be part of the Purchasing activities?

• Maintenance: Should Maintenance be a standalone department or function under Production?

• HR: Should HR be a separate department or collaborate with Factory Administration?

I would be grateful for a prompt response.

Regards,

Tariq Nadeem

Manager, H.R.

Please check my replies in italics:

1) Production Planning & Control (PPC)
Should this function operate separately or be a part of Production?
*It should be a separate department. The PPC in charge can report to the Plant Head.*

2) Raw Material Stores
Should this function operate separately or be a part of Purchase?
*It should be a part of Purchase.*

3) Finished Goods Warehouse
Should this function be a part of Stores or a part of Sales & Distribution?
*It should be part of Sales. However, the warehouse in charge may have dual reporting. With respect to internal movement material, layout of stores, arrangement, etc., he can report to Purchase. For shipping and dispatch, inventory accuracy, etc., he can report to Sales. Sales is also responsible for the Inventory Turnover Ratio (ITR) of the warehouse.*

4) Imports
Should it work with Export or be a part of the Purchase activity?
*Imports are part of the purchase activity.*

5) Maintenance
Should it be a separate department or work under Production?
*Maintenance should be a separate department. The in-charge of this department may report to the Plant Head.*

6) HR
Should it be a separate department or work with Factory Administration?
*The HR Department is completely independent. The Head of HR reports to the CEO.*

The above suggestions are given based on what happens in India. A few changes you may make as per local requirements.

Regards,
Dinesh V Divekar