New Delhi, Dec 18: Based on the recommendations of consultant PricewaterhouseCoopers (PwC), sanitaryware major Hindustan Sanitaryware & Industries Ltd (HSIL) has embarked on a major restructuring exercise of its organisational structure. "We are trying to reduce the number of levels so as to have a flatter hierarchy," HSIL's joint managing director Sandip Somany told The Financial Express while commenting on the outcome of PwC's Project Sankalp. The restructuring, he said, was being carried out both at the corporate and the shopfloor level.While refusing to reveal the new structure, Mr Somany assured that the restructuring would not lead to downsizing in the company. "It (downsizing) would not be significant but would only involve relocation of jobs," he said.
Commissioned in February 2000 by HSIL, Project Sankalp is directed towards cost reduction and an increase in profits of the company. The project is currently being implemented at its Bahadurgarh facility near Delhi and is slated to be completed by September next.
According to Mr Somany, the organisational structure is being restructured to increase the autonomy, delegation and accountability. "The new structure would be process-centric rather than function-centric so as to increase decision making and response time," Mr Somany said.
Since most of the decision making is being driven downwards, the company expects that there will be more time at the disposal of the top management to focus on issues of strategic intent.
"Our supply chain management will help us service our customers better. We expect to reduce costs and improve productivity on a sustainable basis," he said. The company is already claiming that that post implementation, the service levels had gone up to 92 per cent from 85 per cent. It, however, was still far away from the targeted 97 per cent.
Similarly, the company has been able to match production with the market forecast more accurately. The variation levels had come down to 3 per cent from 9 per cent-10 per cent, Mr Somany claimed.
According to him, after the successful implementation of the project, the company would be able to save Rs 1.5 crore per annum at the Bahadurgarh plant. The process will be replicated at its other plants at Bibinagar and Isnapur in Andhra Pradesh.
The company has entailed a capital expenditure of Rs 1.5 crore so far on the restructuring project. On the company's decision to split the company's sanitaryware and glass divisions into two separate companies, Mr Somany said that the decision will likely be taken in the next fiscal. "We are waiting for the new capacities to be absorbed in the market," he added. HSIL's glass division, which accounts for almost 45 per cent of the company's turnover, has just undergone a Rs 90 crore modernisation-cum-expansion plan from 52,000 tonnes to 105,000 tonnes.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.