Journal of Research Technology in Engineering & Management (IJRTEM) ISSN: 2455-3689 www.ijrtem.com Volume X Issue X ǁ XXXX. 2015 ǁ PP.
Human Resource Management Policies and Supply Chain Management in Apparel Industry in Delhi /NCR 1
Dr Suruchi Mittar, 2Priyesh Deep 1
National Institute of Fashion Technology 2 Bachelor of Fashion Technology
Background: This study aims to determine the impact of human resource management (HRM) practices on supply chain management (SCM) in garment manufacturing firms. Methods: This study found that garment manufacturing firms perform moderate level of HRM which have an impact on Supply chain Management (SCM).There is a correlation between HRM practices that proactively contributes in supply chain success. Training, an important HRM practise contributes greater to SCM success. A two way approach was followed to collect Data which was from research papers and garment manufacturing firms. A Questionnaire was prepared which was filled by middle level managers of garment industry in order to know their perception as well as to understand the existing HRM practices which have or can have an impact on SCM. Keywords: Human resource management, supply chain management, organization structure, competitive advantage, SME. 1. Human Resource Management Human resources management (HRM) is a function in organizations designed to maximize employee performance in service of their employer’s strategic objectives. HRM is primarily concerned with how people are managed within organizations, focusing on policies and systems. Human Resource (HR) departments are typically responsible for employee recruitment, training and development, performance appraisal, and rewarding (e.g., managing pay and benefit systems).HR is also concerned with industrial relations, that is, the balancing of organizational practices with regulations arising from collective bargaining and governmental laws. It is not difficult to formulate objectives for an organization but to establish and to personally ensure that these objectives are realistic. Mathis, R, Nica P, Rusu C (1997),Naisbitt and P. Aberdene (1985) states "human capital has replaced dollar capital as a strategic resource”. Mittar (2014) stated that “Human Resource Management (HRM) is an art of managing work force in an organization to achieve organizational goals. Investing in human capital has a direct effect on Organizational performance. Employers grapple with the question of how much to invest in the work force, and whether the benefits will cover the cost of investment. For Indian Apparel manufacturers, these questions are more mystifying as little research has been done that relates to their experience”. Novac E. (2008) states , "Human resource management is one that provides a systematic check on a set of interrelated processes affecting and involving all members of an organization, processes that include human resource planning, recruitment, selection and evaluation employee training and human resources development, motivating and rewarding employees. " HR assesses talent through use of performance appraisals and then rewards them accordingly. In fulfilment of the latter, HR may sometimes administer payroll and employee, although such activities are more and more being outsourced, with HR playing a more strategic role. Finally, HR is involved in employee terminations - including resignations, performance-related dismissals, and redundancies. At the macro-level, HR is in charge of overseeing organizational leadership and culture. 2. HRM Practises HRM practises are established by an organization, to support administrative personnel functions, performance management, employee relations and resource planning. Each company has a different set of circumstances, and so develops an individual set of human resource policies. These policies, when organized and disseminated in an easily used form, can serve to pre-empt many misunderstandings between employees and employers about their rights and obligations in the business place. It is tempting, as a new small business owner, to focus on the concerns of the business at hand, and put off the task of writing up a human resource policy. Having policies written is important so that it is clear to all what the policies are and that they are applied consistently and fairly across the organization. Moreover, when issues concerning employee rights and company policies come before federal and state courts, it is standard practice to assume that the company's human resource policies, whether written or verbal, are a part of an employment contract between the employee and the company. Without clearly written policies, the company is at a disadvantage.
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Human Resource Management Policies and Supply Chain Management in Apparel Industry in Delhi /NCR
3. Supply Chain and Supply Chain Management A supply chain is defined as a set of activities that span enterprise functions from the ordering and receipt of raw materials, manufacturing of products, through to the distribution and delivery to the customer. These activities are associated with the material flow and information flow (Li 2007). Supply chain management (SCM) is a set of synchronised activities for integrating suppliers, manufacturers, transporters, and customers efficiently so that the right product or service is delivered at the right quantities, at the right time, to the right places. The ultimate objective of SCM is to achieve sustainable competitive advantage (Li 2007). With the implementation of SCM, suppliers and customers are viewed as partners and their relationship becomes a cooperative one as enterprises in the supply chain recognise that coordination among partners within the supply chain is a key factor of success. In order to operate a supply chain efficiently in a cooperative manner, all related functions across the supply chain must operate in an integrated manner in which the various partners within the supply chain must be efficient with respect to every aspect including quality management. An increasing reliance on more collaboration supported by better integration within the supply chain which is resulting on information systems to grow. An efficient supply chain is characterised by real-time collaboration and sophisticated integration (Zhang et al. 2003, 2004, Li 2006). Research indicates that SCM would not be possible without integrating HR to technology and 4. HRM and SCM Many studies conducted in different working conditions reveal a strong correlation between HRM and SCM (Gowen and Tallon, 2003). McAfee et al. (2002) emphasized the necessity to create a fit between supply chain and human resources strategies. Very few of them investigate the relationship between human resource practices and supply chain process which was the focus of this study. Gowen and Tallon (2003) found a link between managerial and employee support as well as employee training to enhance the SCM practice success. This research demonstrates that SCM has a substantial competitive advantage in four dimensions: Value added, rareness, imitation cost barrier and organizational structure. All these four dimensions are activated by HRM factors such as employee training and employee support. In brief, HRM enhances the value added chain by providing more effective resources in terms of trained and enthusiastic employees. Hence, organizations could achieve a greater competitive advantage by directing more resources toward managerial and employee support while marinating employee training (Goldstein and Ford, 2002). However, there is little literature that describes the relationship between human resource activities or organization variables and supply chain success (Shub and Stonebraker, 2009). The success of the SCM system depends on adopters who develop specific capabilities (Chandra and Kumar, 2000). Attaining these capabilities requires employees, who are flexible in their role to have a broad set of skills, adaptable to recognition, able to work in boundary-spanning responsibility and are innovative (Othman and Ghani, 2008). Moreover, companies said to be effective in their SCM practices put a lot of emphasis on developing their human resource through training and retraining of employees (Gowenand Tallon, 2003). In addition, Shadur and Bamber (1994) pointed out that effective SCM practices also rely on teamwork and continuous improvement. Basu and Miroshnik (1999) explained that such collaboration also requires high trust among employees and with suppliers. The study by Othman and Ghani (2008) provided evidence that there was a positive relationship between HRM practices and the SCM success. Moreover, they found some support for the contention that the adoption of SCM needs to be supported by specific forms of HRM practice. HRM& SCM links can take two forms: Human capital resources within organization needed for supply chain to function effectively (recent SCM revolution requires HR in SC to possess different skills and more capabilities as their responsibilities have increased) and activities between organizations embedded in supply chain partner relationships. First being Intra-organizational HRM &SCM links. This talks about managers in supply chain functions and their process & change management skills and ability to work cross-culturally. Main HRM issues in supply chain sector are educating and training workers before and after hire, assisting workers in keeping up with technology and succession and career planning. Supplier related team building and problem solving training are significantly related to supply chain success. Second is Inter-organizational HRM &SCM links. This has two primary types: (1) Applying HRM & SCM to manage relationships with other firms in the supply chain, e.g.: extensive research on selection and recruitment of personnel can be used to design a selection system for suppliers. Diffusing or aligning HRM best practices across supply chain partners (require supplier certification to HR standards). (2) Use of HRM practices by supply chain partners to manage their employees, particularly to encourage collaborative behavior and knowledge sharing (Fisher et al., 2010). SCM being integrated into organizational processes and management functions and came to be considered the strategic advantage for firms around the world. HRM emerged as a dominant organizational function with significant effect on the firm's performance. HRM proactively contributes to SCM success while it has direct & indirect effects on HRM practices (Khan et al., 2013).There exists a unidirectional relationship between HRM and supply chain, in which HRM affects supply chain management. It is conclusive of the fact that that organizations need to focus more on HRM to not only improve employee performance, but also enhance the supply chain management and contribute to its success (Khan et al., 2013).
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Human Resource Management Policies and Supply Chain Management in Apparel Industry in Delhi /NCR Khan et al. (2013) states the way HRM factors like employee training and employee support advantageously activate SCM in four dimensions, achieving a significant competitive advantage. The four dimensions here being: value added, rareness, imitation cost barrier and organizational structure. The discussion is conclusive of the fact that a greater competitive advantage may be achieved by deploying more resources towards managerial and employee support and training. Mittar (2014) concluded that the more HRM practices in place, the more the employees remain motivated to work effectively and efficiently and improve the SCM performance with lesser intention to leave the organization as well. Human Resource & Supply Chain Management (HRM&SCM) combines suppliers, information systems, finance, employees, manufacturing and operations, sales and marketing, research and development, inventory management and customer relations, and integrate them into a single unified model to create value chain system. Successful SCM depends upon employees with a broad skill-set, HR development through training & retraining, teamwork & continuous improvement, high trust among employees & suppliers, integration of Internet into management and managerial accounting. Managing people within and between firms in supply chain relationships offers opportunities for competitive advantage. This results in cost savings which are in turn passed on to the customers. Successful supply chain management depends upon the performance of the people in the supply chains. The current complex business environment comprises of shorter product-life cycles, product proliferation, outsourcing, globalization of the supply base and markets. This has magnified the challenges of HRM in supply chains.
Objective: To study the relationship of HRM practices and supply chain in apparel Industry in Delhi/NCR
5. Methodology Adopted For Secondary Data, various research papers and articles on HR Policies, SCM and their examples understanding the barriers in application of various HR policies and its impact on Organisation were considered. Furthermore, for Primary data, a questionnaire on factors influencing the HR policies and its impact on garment manufacturing was developed. This helps in identification of present scenario, complete process involved in SCM and analysis of responses received from customers as well as garment manufacturing firms.
6. Data Analysis and Interpretation The formulated questionnaire was sent to export houses which had turnover of more than 50 crores and are based in Delhi/NCR. The filled questionnaires were received from 35 export houses and data was then evaluated in percentage method. 54 % of employees accepted that efforts are being made to generate awareness amongst the employees about the organization’s financial position, customer’s needs, and quality of product/service, cost etc. Agree
Disagree
15%
No Idea
0%
31%
Neutral
54%
38 % of people consider that there are distinct career paths and internal promotion norms within the organization.
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Human Resource Management Policies and Supply Chain Management in Apparel Industry in Delhi /NCR Agree
Disagree
Neutral
No Idea
8%
15%
39%
38%
38% of people believed that the organization utilizes the assessment centre/development centre for identification and development of management potential. 30% of people believed that the organization has provision for employee recognition programmes and awards. 30 % of people think that HR policies provide a sense of understanding and proper functioning of supply chain management. 62% of the people don’t agree that the organization has a wide network of computerized human resource information system with the latest software. Agree
Disagree
8%
Neutral
No Idea
8%
23%
61%
68% of employees felt that training on understanding of various production activities as the merchandiser provided an interface between the buyer and the company. 70% of employees believed that training imparted in soft skills like negotiation and communication skills was significant for export oriented units. 85% of employees felt that knowledge of foreign languages helps better co-ordination with the buyer. Agree
Disagree
15%
Neutral
No Idea
0%
0%
85%
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Human Resource Management Policies and Supply Chain Management in Apparel Industry in Delhi /NCR  77% of employees voiced that systems well placed in recruitment and selection necessitates efficient employees. Agree
Disagree
Neutral
with well-defined job descriptions
No Idea
8% 0% 15%
77%
7. Conclusion The research showed the impact of HRM practices on effective supply chain management. The study concluded that SCM methodologies can enhance intra-firm HRM, for example, the bull-whip effect (small changes in consumer demand are magnified across the supply chain) can apply to long term personnel planning. Organizational culture impacts supply chain integration, integration practices in the supply chain act as a mediating link between culture and performance. Some HRM practices have a positive effect on building intra firm SCM relationships while some have a negative effect. Intra organizational divides can be as strong as, if not stronger than, inter firm divisions, therefore HR practices are important in both settings. Internal supply chains provide greater opportunities for top management to control and extract value from the supply chain, compared to supply chains consisting of separate organizations. HRM practices enable the proper functioning of Supply Chain and ensure that employees are treated fairly, managed well, appraised effectively and rewarded financially and non-financially. HRM helps specific tasks and performance parameters for various levels and functions of employees based on their education, experience, and designations Just like an SCM function is responsible for sourcing and bringing raw material in. So, also the HR team is expected to help the business bring in the talent and staffing required to run the business appropriately. References 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21.
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