Maintenance Technology September 2016 - 85

24 Now is a good time to look at several critical issues that must be addressed to make it easier for people to work together. At the highest level, the organizational structure must be aligned to: 1. The business strategy. 2. The production process, or in some cases, the supply chain. 3. The skills of the staff running each element in the structure. No organizational structure is perfect, and compromises must be made to optimize the overall organization. Here are several examples of how to align the organizational structure to the three principles listed above: Structure Aligns to Strategy. Cash is critical in running a business, especially a growing one. A small company that has very little cash to support hiring sales staff still needs to expand its business. Rather than slow down growth, the company could develop a network of distributors and reps as their sales force with company regional managers to manage this network. Cash flow demands would be less since they don't pay the distributors until products are paid for and shipped. Hiring all the sales force typically results in a much larger drain on cash. Structure Aligns to the Production Process. It's unwise to organize by functionality with production supervisors being held accountable for production in multiple areas. This spreads supervisors too thin, which can result in each area's performance deteriorating due to the supervisors spending far too much time traveling between sites and not being able to adequately train and develop individual employees or to properly address issues and problems within a given area. The organizational structure should be changed so each supervisor is accountable for one area. This also goes to the issue of having a single point of accountability for a given process. Structure Aligns to Staff Skills. This is almost self-evident. As Jim Collins suggests in his book Good to Great, you get the right people (with the right skills) on board first then develop your strategy. To this end, it's also important to build the organization around its people to support the overall strategy. This ensures the set goals and objectives are attainable since you keep in mind the capabilities of the team at all times during planning. Structure must also consider the following issues: 1. The span of control for a given manager in a business situation. A reasonable span of control for effectively supervising people is on the order of five to seven. Even with that number of people you're more likely to spend most of your time with two to three. 2. Geographical locations of the business units, management teams and interfaces. Having people spread across different plants, office buildings, states or even countries can make it more difficult to manage and support their efforts. Travel time and differing time zones create difficulties in scheduling and planning. You lose a lot of time traveling and the processes are different, adding complexity to the managerial job. If you're faced with the task of automating teams across several different locations, work to uncover the similarities between them. This may decrease the complexity of your tasks. SOLUTIONS AUGUST 2016 10127-4056 SMRP Solutions SE.indd 24 8/22/16 9:43 AM

Table of Contents for the Digital Edition of Maintenance Technology September 2016