WORKFORCE STRATEGY IN A MANUFACTURING COMPANY TO IMPROVE PIMS VALUE
The workforce is a critical source for a manufacturing company to remain competitive. However, the company is facing significant challenges in managing a substantial workforce and rising expenditures, which increased annually due to inflation, minimum wage legislation and economic growth. Thes...
Saved in:
| Main Author: | |
|---|---|
| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/85940 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | The workforce is a critical source for a manufacturing company to remain
competitive. However, the company is facing significant challenges in managing a
substantial workforce and rising expenditures, which increased annually due to
inflation, minimum wage legislation and economic growth. These concerns serve
as the foundation for study because it impacts the company’s competitive
advantage, strategic decision making, budget planning, and cost control.
Profit Impact Marketing Strategy (PIMS) is a metric used by lubricant
manufacturing businesses to measure their competitiveness. The company is
expected to raise its competitive level annually by reaching the PIMS value, which
is expresses in units of total blending volume per total expenditure. The annual cost
of expenditure is a key component that the company may control to increase its
PIMS value. Currently, salary, wages, and benefits constitute the largest portion of
the cost components, accounting for more than half of total annual expenditure.
Therefore, a comprehensive study into workforce management and labor cost trends
is critical. This approach enables companies to develop effective strategies for
workforce efficiency, which is essential for ensuring long-term competitiveness and
growth.
This study aims to evaluate the workforce amount and determine a workforce
strategy to improve PIMS value. This study employs a mixed methods approach to
obtain a comprehensive understanding of workforce management and labor cost
trends by a descriptive qualitative approach by carrying out semi-structured
interviews with five managerial respondents to provide an overview of the relevant
aspects to the indicators that were used in the study. In addition, this study also
applies quantitative data collection from internal company reports such as
workforce number, workforce expenditure and operational efficiencies that will be
carried out internally. Data analysis methods for this study is using internal
Business Model Canvas (BMC) by assessing nine elements such as Customer
Segment, Value Proposition, Channel, Customer Relationship, Revenue Stream,
Key Resources, Key Activities, Key Resources, Key Partnerships, workforce
stewardship tools for quantitative data to evaluate workforce stewardship process
and cost structure; and Strengths, Weaknesses, Opportunities, and Threats (SWOT)
analysis for to determine workforce efficiency strategy.
iii
This study provides a comprehensive overview of the current workforce and
associated costs within the company. It also identifies focus areas for developing a
workforce strategy aimed at enhancing company PIMS value.
The study reveals the current business models which emphasizes on company
competitiveness as a company objective, highlights three key pillars such as
operational efficiency, third party partnerships, and workforce optimization which
specifically focusing on improving PIMS value.
The study analysis also reveals the following insights into the company’s workforce
and associated labor costs, including workforce composition, labor cost, and main
cost components. The workforce composition in the company comprises 80% NonManagement Professional Technical Employment (NMPT) and 20% Management
Professional Technical Employment (MPT). The labor cost estimation is 1.07 M
US$ for the year-to-date (YTD) period ending June 2024 which represents 64% of
total expenditure for the six months period. The main cost components consist of
salaries, wages, benefits (SWB), and overtime.
Company strategies are built by SWOT analysis and TOWS matrix. There are three
main strategies which can be applied to improve PIMS value such as invest in
technological tools for full Automation (SO), reduce rising labor costs with
outsourcing and automation (WO) and maintain competitiveness through
continuous operational efficiency improvements (ST).
By having these results, the company can determine its workforce strategy by
understanding its position, aligning the workforce with business plan over the next
three to five years, optimizing workforce size and composition with business needs,
improving workforce quantity by labor management, automation and outsourcing
non-core activities.
This research significantly contributes to the scientific understanding of workforce
management in manufacturing companies. It provides a comprehensive analysis of
workforce composition and labor costs, integrating the PIMS metric to link
workforce efficiency with business performance. Applying the Business Model
Canvas (BMC) and SWOT analysis, the study offers strategic insights for
optimizing workforce size, quality, and costs. It emphasizes data-driven decisionmaking and addresses the impacts of economic factors like inflation and wage
legislation. This study’s methodological framework serves as a model for
continuous improvement in workforce strategies and fosters the development of
best practices in the field |
|---|