Org. Restructuring

Dear Senior/ OD Specialists,

I need your valuable suggestion regarding corporate re-structuring.

We are SME (600 employees) in leather fashion footwear manufacturing, running as family owned business and intend to go under professional departmentalization with an objective to create simplicity, coordination and responsibility.

I want to know the best operational practices of latest departmentalization in manufacturing concerns. I have few question for which I need your help:

1)- Production Planning & Control (PPC). Should this function operate separately or be a part of Production?

2)- Raw Material Stores. Should this function operate separately or be a part of Purchse?

3)- Finished goods Warehouse. Should this function be a part of Stores or a part of Sales & Distrubution?

4)- Imports. Should it work with Export or be a part of Purchase activity?

5)- Maintenance. Should it be a separate department or work under Production?

6)- HR. Should it be a separate department or work with Factory Administration.

I shall be obliged for a quick response.

Regards,

Tariq Nadeem

Manager H.R.

Dear Seniors,
Waiting for expert advice and response.
Tariq Nadeem

Dear Tariq Nadeem,

Please check my replies in the italics:

1)- Production Planning & Control (PPC). Should this function operate separately or be a part of Production?

It should be separate department. PPC in charge can report to Plant Head.

2)- Raw Material Stores. Should this function operate separately or be a part of Purchse?

It should be part of Purchase.

3)- Finished goods Warehouse. Should this function be a part of Stores or a part of Sales & Distrubution?

It should be part of Sales. However, 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 despatch, 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 Purchase activity?

Imports are part of purchase activity.

5)- Maintenance. Should it be a separate department or work under Production?

Maintenance should be separate department. In charge of this department may report to Plant Head.

6)- HR. Should it be a separate department or work with Factory Administration.

HR Department is completely independent. Head HR reports to CEO.

The above suggestions are given based on what happens in India. Few changes you may do as per local requirement.

Ok...

Dinesh V Divekar