Manufacturing companies look to invest in white collar jobs

Manufacturing companies are trying to oil their productivity machine, taking a leaf out of the software industry’s books. Like software firms, they are planning to create a ‘bench’ of trained white collar employees as they battle huge capacity constraints in almost all sectors from product design to accounts. Companies are also redeploying staff to cut costs.

All these years, manufacturing companies played safe, expanding capacity only when there was a clear demand. Typically, people would be hired or shifts increased at the time of receiving new orders. Post-slowdown, however, orders have piled up and there is no capacity to fulfil them.

Senior managements thrashed out the issue at a conclave organised by the Indian Machine Tool Manufacturers Association in Pune recently on increasing productivity while maintaining quality.

“We will have to have create capacity ahead of demand. This means not just physical infrastructure at our own and at vendor locations, but also in white collar jobs,” says Pradeep Bhargava, MD, Cummins Generator Technologies, a genset-maker from the Cummins group.

There is a compelling reason for companies to look at increasing white-collar productivity: Costs. “White collar productivity has the biggest bearing on cost, even more than blue collar,” says AK Taneja, MD and CEO, Usha Pistons and Rings, which manufactures piston rings. He cites an example in the area of product development. This is done either in a linear manner, that is, one job after another, in succession, or in a linear-cum-parallel manner.

The last process involves building milestones and checkposts so that errors are caught early, saving time and costs, and not waiting till the end to find the product is unusable. This is productivity enhancement at the design stage, a white collar area. “This reduces time to development, and there is no need to re-work. That is white collar productivity improvement,” he says.

In the 1990s, software companies created ‘benches’ — a US sports term — to meet project demands as they arose. Software companies often bid for work on the basis of this bench. A decade later, the manufacturing industry is deploying this strategy.

CP Rangachar, MD of Bangalore-based machine tool maker Yuken India, says companies are increasingly re-deploying people, not sacking them. “If you start sacking people for productivity improvement, you are headed for losses. White collar productivity improvement is achieved through redeployment,” he says.



From: The Economic Times