1. Introduction Sartorius AG is a German company founded in the year 1870.

The company

comprises of two major divisions Biotech and Mechatronics. The Biotech division is a provider of complete solutions for the biopharmaceutical industry. Its main areas of interest are in the Filtration and separation products, fermentors, bioreactors and disposable bags for laboratory, process applications and services. The Mechatronics division is a ccomplete provider of weighing equipment and technologies. Its major products are Equipment and systems incorporating weighing, measurement and automation technologies for laboratory and process applications and hydrodynamic bearings Sartorius earns a good 75% of its sales revenue as one of the global market leaders. Sartorius is the global market leader in disposable bags for biopharmaceutical applications. Sartorius belongs to the Top Three providers worldwide in fermentation and filtration for biopharmaceutical applications. Sartorius ranks as Number Two in laboratory and industrial weighing technology and, in this area, is one of only two globally operating marketers. Sartorius has manufacturing locations across the globe. In Goettingen, Germany, lab and industrial weighing equipment, particularly premium products are manufactured. All filter types are manufactured at Aachen, Germany. Industrial weighing equipment is manufactured at Hamburg, Germany. Melsungen is the home to industrial biotech equipment manufacture i. e. fermentors and bioreactors. In Aubagne, France and Tunesia, disposable bags are manufactured. Aseptic transfer systems are manufactured at Lourdes. In UK various products for the laboratory are manufactured and in Russia weights are manufactured. In addition t this there are manufacturing plants in China and India catering to the huge Asia Pacific market.

Sartorius Biotech India started operations in 1995 and is based in Bangalore. Ever since it has been a market leader in Engineering and Bangalore manufacture of complete solution to the Biotech Industry in India.

houses about 92 of the 180 Biotech companies in India. The Indian Biotech industry is fast gaining worldwide recognition and posted export revenue of Rs 4,937 crore (USD 1.2 billion) in Fiscal 2007, growing by 47 per cent over the previous year. 27 per cent of the contribution came from the top three-biotech companies--Pune based Serum Institute (Rs 951 crore), Bangalore headquartered Biocon (Rs 823 crore) and the New Delhi based Panacea Biotech (Rs 600 crore). This was disclosed by the fifth industry survey conducted by speciality magazine BioSpectrum of the Cyber Media Group along with the Association of Biotechnology Led Enterprises (ABLE) [1]. Naturally along with growth come challenges. The challenges faced by the industry owing to business pressures have been analysed with respect to Sartorius Biotech India.

2.0 The External Environment 2.1 Business Pressures, Strategic Response and HR strategy
Business Pressures,Strategic Response and HRM factors
Business Pressures Political High Customs duty Economic Strenghtening Rupee High Inflation Increase in Steel prices. Social High rates of attrition Legal Stricter metrological norms Impact(I) Term(T) 3 3 IT 9 Strategic Responses Manufacture locally Implications for HR Training

3 3 3

2 2 2

6 6 6

Low cost Strategy Continual Improvement

Best practices like Six Sigma

Career plan for employees

Establish career ladders/paths Attract the best talent

Upgrade technology Retain the best talent

Legend: Low Impact = 1 High Impact = 3 Likely to happen in the short term = 3 Not likely to happen in the near future = 1 The impact on the business is higher as the value of IT increases

2.1 Political Business Pressures-High Customs Duty The Indian manufacturing industry dates back to the British era. Thanks to the British, India had some of the best industries set up during the British Raj. This helped India in developing the manufacturing industries after independence. The excellent educational system supported the industry with educated manpower. According to the Indian Brand Equity Foundation [1], India is on the verge of becoming an Industrial Powerhouse. The low cost and highly skilled work force will act as a catalyst to this process. India is home to most of the multinationals that employ some of the best talent available. According to [1] manufacturing in India accounts for 20% of Indias GDP. 75% of Indias export comes from the manufacturing sector. Ever since the Foreign investment in the Indian Industry has seen a steady increase. In the years after liberalization the industrial production in India has more than doubled. The capital goods sector showed a healthy growth of 18.6% in September 2007,compared to 9.5% in the corresponding month last year. Capital goods sector covers factories, machinery and tools used to produce finished goods. Sartorius Mechatronics caters to the factories especially in the core sector i.e. Cement and Steel. The customs duty on imports is very high. Although there has been a reduction year on year the higher rates make it very unviable to import products and sell in the local market. This has given rise to a flourishing grey market. In the weighing sector this is one of the biggest challenges faced by Sartorius Mechatronics. In order to counter this the only option is to locally manufacture products. With the opening up of the economy the small-scale industry base in India is also very large. Bangalore, where Sartorius Mechatronics is located is home to one of the largest industrial areas in Asia. This will help the company start local manufacturing. The other option is to
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wait for the customs duty to fall. This would be like a wait and watch strategy and could prove detrimental. The grey market could slowly push out the bigger players like Sartorius Mechatronics. In my opinion the faster we start localized manufacture of products the better. Technology is no longer a cause for concern as the parent company is strong in terms of technology and transfer of technology will be relatively easy.

2.2 Economic Business Pressures- The strengthening Rupee, Higher inflation and increase in steel prices. The strengthening of the rupee is a cause for concern. Lower value of the dollar means lower import costs but also lower sale value for products. Sartorius however is not a big exporter to the US and hence the impact would be negligible. The weakening dollar has brought a smile on many of the MNCs faces. Companies who import 100% of their products are definitely benefited. However for Sartorius Mechatronics most of the imports are from Germany. The Euro on the other hand is getting stronger. This does not sere us any purpose. The Chinese Yuan on the other hand is also weaker and currently trading at 10% lower than last year. This means that Sartorius Mechatronics should look at the option of importing from its factories in china. This could further boost the profits and can serve as a short-term low cost strategy until localized manufacturing of currently imported products starts. However since delivery cycle of the imported goods is higher this strategy can work only if the rupee holds on to its strong run. The weak dollar however could have and impact on the Indian industry in general and could push up the inflation/interest rates. This could indirectly affect the businesses in India. A significant slow down in the US economic growth could potentially drag down the global economy.
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Varying steel prices are another cause for concern. In the first 6 months of this year the LME (London Metal Exchange) has recorded an increase in 60 % on the price of steel. Considering the fact that the products manufactured by Sartorius Mechatronics have a high lead-time, the varying prices can exert pressure on the business. The strategy to counter this could be to get into rate contracts with steel suppliers. The steel suppliers however would not be too willing to do this. Strategically the company should keep sufficient buffers in its costing to counter this increase. The other strategy could be to continuously improve the operations so that manufacturing cost is reduced. 2.3 Social Business Pressures-High rates of Attrition Attrition at Sartorius Mechatronics is currently at 17%. This is an unusually high number but is contributed by the booming It and BPO industry in Bangalore. Bangalore has some of the best engineering colleges and churns out more than 50000 engineers every year. Unfortunately most of the Engineers are gobbled up by the IT industry. Higher starting pays and the lure of working in foreign countries wean away the talent. Most of the Engineers shy away from manufacturing jobs. The minority that find their way into a manufacturing industry work for very short period keep changing jobs, finally ending up in the IT industry. The disparity in salaries is a cause for concern. Manufacturing Industries have started increasing starting salaries but are woefully lower than their counter parts in the IT industry. At Sartorius India the starting salaries are at least 50% less than the starting salaries in the IT sector. This needs to be looked into and a clear remuneration strategy needs to be worked out to retain talent. Although it can be argued that money is not the only factor it does play a major role. We need a strategy, which can encompass a clear-cut fast track growth plan for the Engineers. Youngsters today are ambitious and clear-cut career
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growth strategies can be the panacea for attrition. Attrition is a way of life and cannot be reduced to zero. However there should be focus on reducing the rates through a well though out HR Strategy. 2.2 Strategic Response to Business Pressures

Mission

To develop Sartorius Mechatronics India (SMI) into a full fledged Engineering company in India aimed at creating Value for its Shareholders, Customers & its Employees SMI will produce Knowledge & Engineering solutions com plimenting its parent, that can be exported to other countries To become Number One in Market Share in all Market Segments that we play in Entrench the company in Industrial Weighing Automation Become No. 1 in Laboratory weighing Create Strategic Capacity for sustained Growth To achieve 15% EBIT by 2004 Manufacture Locally Low cost Strategy Continual Improvement Career plan for Employees

Vision
Strategic Objective Strategy

The Strategy for Sartorius Mechatronics has been derived from the business pressures and aligned with the Mission and the vision of the company. The strategy will further be drilled down to the department goals and individual Key Result Areas. One of the biggest business pressures on the company is the growing grey market. High customs duty is the cause for this. One of the options that the company can look at is to manufacture locally. This needs investments and also the required economies of scale. The HR strategy required to pursue this strategy is training. Employees have to be trained on
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the new product range and the manufacturing processes. For the training it is important to identify the right people. It is always better to look at the existing employees for starting new products. After the training retention of employees is also important. Training may require a long stay at the parent company in Germany. As is the industry norm, employees sent for training should be placed on a contract with the company for a minimum period of three years. company. The Economic Business pressures may force the company to look at efficiency in the internal Operations. Best Practices should be used cross all the departments. Concepts like TPM and Six Sigma on the shop floor will bring in great value adds. Reduction of the wastes in the process can contribute a lot to cost reduction. Obviously all these needs extensive training and follow up. The process of continual improvement is a cultural change. This needs to be inculcated in the Organization. The Social pressures that are of prime concern are the high rates of attrition. This is a common problem that is being faced by most of the manufacturing industries in Bangalore. The IT and BPO industry is attracting more and more people. As a result the manufacturing industry is facing an acute shortage. One way to overcome this challenge is to have a clear career plan for fresh Engineers. Training at the companys factories in Germany and other parts of the world can be added to the training to motivate the new recruits. Foreign travel is seen in India as a privileged and the prospect of travel to other countries for training can be a good morale booster. The other option is to tap talent early in college. The company can start sponsoring students for their Engineering education and groom them for the job required. This will instill a sense of gratitude in the students and they will want to stay and work for the company that has sponsored their education.
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This will at least ensure that the employee stays with the

The legal pressures do not seem to cause any major impact on the business in the near future. Hence this has not been analyzed or explained in detail.

3. HR Strategy to be employed at Sartorius Mechatronics.

3.1 Choosing the Best fit strategy Translating the business pressures into a strategy for implementation is the most important step. Sartorius Mechatronics had been registering a stagy growth of 30 % year on year for the last three years. The overall picture looks rosy. The market however is changing and it is prudent to always be proactive. The mission statement describes the reason why the company is in existence. Managers have to be trained to make this mission statement a reality. Constant review of the mission statement and the strategy helps managers stay focused on the goals of the Organization. The strategic responses identified to help Sartorius Mechatronics overcome the business pressures are to manufacture locally, low cost strategy, continual improvement, career plan for employees and up gradation of technology. In order to meet these responses the company needs a HR Strategy that fits the strategic responses. I propose a three-step approach to the HR strategy that is required at Sartorius Mechatronics. In step one the HR practices that are required need to be identified to fit the strategic responses. In the next step the HR practices This is shown identified have to be translated into a HR mission In the last step the HR program has to be developed to suit the HR strategy. graphically in fig 3.1

Figure 3.1-Translating the Strategic response into a best fit HR Strategy

B u s i n e s s S t r a t e g y

HR Programms HR Mission HR Practices Training Best Practices Career Plan Retention of Manpower Create a culture where the Business goals are achieved by imparting the appropriate training, implementing best practices and retaining talent. Training Plan for every indivudual Special training for personnel in core competencies Soft skills training Special long term career plan for every employee Training and Implementation plan for TPM,Six Sigma and Lean Manufacturing

THE BEST FIT HR STRATEGY FOR SARTORIUS MECHATRONICS

In the first step the HR strategies identified are training, Best Practices, career plan and retention of manpower. In order to translate the strategy into action the HR mission was developed. This will form the basic guideline for the HR programmes developed to deliver the Business Strategy. The HR mission statement is as follows: Create a culture where the Business goals are achieved by imparting the appropriate training, implementing best practices and retaining talent. The mission statement will serve to guide the HR personnel into formulating the training programs. The training programs developed have to keep in mind the long-term objective of the company. In the future the businesses that will do well will be those that have the best people. Hence there is an urgent requirement for the company to start looking at employees as assets that will only appreciate in value and not depreciate. People should be treated as Resourceful Humans and not as just another resource that has to be utilized to the maximum. Empowerment of employees and self-managed teams are the order of the day. India has been witness to highly bureaucratic
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companies. This has to do with its 200 years of colonialism that has ingrained bureaucracy, and mistrust thereby strengthening the value of hierarchy. This culture has seeped into many organizations. Fortunately at Sartorius Mechatronics this kind of a culture does not exists. However it of great importance the culture is maintained this way. With the company growing and becoming larger there is always the danger of bureaucracy setting in. The HR strategies must therefore create a culture where in a Japanese kind of a culture based on long-term employment, internal training and employee involvement fosters.. A relatively small gap needs to be maintained between the white collared and the blue collared workers to create this kind of a culture. This will ensure that a tight fit is created between the environmental constraints, strategic response and HRM actions. 3.2 Organizational Structure and HR Strategy The Organization structure at Sartorius is Flat. The functional heads are the only managers and there exists only one level above the managers. This gives the company flexibility and a decentralized approach. Decisionmaking is quick and there is involvement of all in the decision making process. With over 450 employees there are only four levels separating the workers from the Managing Director of the company. Flat Organizational structures help in teamwork and foster a sense of belonging among the employees. 3.2 The Organizational structure at Sartorius is shown below in fig

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Figure 3.2: Organizational Structure at Sartorius.

Managing Director

VP- Operations

Head of Projects

Head Of Design

Head of Supply Chain

Head Of Production

Head of Quality

Engineers

Engineers

Engineers

Engineers

Engineers

Workers

4. Training at Sartorius Mechatronics It has been established so far that one of the most important HR strategies required at Sartorius is Training. Imparting the right training to the right people at the right time is he objective of the Training strategy that we will discuss now. The key issues regarding training, the training process, types of training and the evaluation of training will be discussed. 4.1 Issues in Training Although we have established a fit between the strategic response and the HR practices, the external environment is changing everyday. This can make the training process very rigid and inflexible if the external environment changes very rapidly. One way of overcoming these challenges is to plan the training calendar for short intervals so that changes in training plans can be accommodated. Similarly a quarterly or half yearly review of the business pressures and strategic responses will help in imparting the right kind of training to our employees.
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The second issue is regarding on the job training or classroom training. It is generally advisable to have technical training on the job and training on soft issues can be classroom training. Standardization of Training is of great importance today since most of the companies are going global. It would do well to have a centralized training format so that the company can follow the same across the globe. Motivating the trainees to learn through training is one of the greatest challenges. Training should always be linked to the work done by the individual. Moreover after the training it is important that the trainee practices what he has learnt. Every training can be followed by a mandatory project based on the learnings. This will ensure that the concepts learnt will be put to use and benefit both the employee and the company. 4.2 Training Process Training refers to the imparting of special and specific skills and abilities to an employee. Successful training programs must have clear-cut goals and objectives. The goals can be built from the expectations of the trainees and their superiors. The expectations of both the management and the employee have to be managed. The training process starts with the assessment of the training needs. Each department Head will make a paper on the kind of training required for his team. In addition to this the HR also makes a list of trainings that employees have to attend in order to meet the business objectives. The assessment of the need for training can be done based on analysis of the task or the individual. Feedback from Performance appraisals can trigger the need for training. After the needs assessment the training program has to be developed and
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conducted. Trainings can be conducted both in-house and outside the office. Many a time the faculty is from within the organization. The knowledge available within the organization has to be used first to impart training. Trainings can be conducted both on the job and off the job. Trainings related to the service department will more often than not on the job training. Training in the finance department on the other hand would probably be classroom training. The training can use the most readily available media. Overhead projectors are good enough if the modern day projectors are not available. Simulation based trainings can be used for training of service department employees. Training should be made lively and should contain videos and movie clippings wherever possible. The type of training imparted varies according to the need of the organization. Broadly the types of training can be divided as follows: 1. Skills Training 2. Technical Training 3. Language training 4. Multiskilling training.

Skills training are conducted to bridge the gap between the expected level and the existing level. Proper gap analysis needs to be done for identifying the gaps in each department or for each task. Technical training will most of the time be an on the job training and generally related to the shop floor. However technical training can also include the class room training
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conducted to improve product knowledge and functioning of products. Language training is important at Sartorius Mechatronics because of the German principles. With many of our employees going back and forth to Germany it makes sense to impart basic level training to the employees. Multiskilling is an important tool that gives flexibility. Training of employees in all areas give the company additional capacity in terms of resources. It also makes the job more interesting and employees are not required to do the mundane job every day. Moreover with new people learning the job new ideas come to the fore. Multiskilling can be very effective on the shop floor. Evaluation of training is an important step as it tells the organization if a particular training has helped it move closer to its business objectives. The other effectiveness of training can be measured in terms of money saved for the organization. The benefits need not always be in terms of money but can be intangible also. Many companies neglect the evaluation process. This is like throwing money down the drain. Evaluation also helps in planning the trainings for the next year. At Sartorius Mechatronics we evaluate the training programs by personal feedback from the trainees. However what is lacking is the follow up on the effectiveness of the training on the job. This needs to be measured in order to ascertain if the company is moving closer to its business objectives and goals.

5. Career Development at Sartorius Mechatronics

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As discussed earlier in order to meet the business objectives the company must be able to attract and retain the best talent. This is possible only when a clear career development plan is in place for all employees. The only way manufacturing companies like Sartorius can attract talent is by bringing about drastic changes in the career development program. A clear-cut plan not only brings about clarity in the minds of the employee but also brings clarity to the management. The employee sees a good career development plan as a upward mobility path and for the organization it is a retention and motivational tool. Good career development plans also ensure that there is no vacuum created in the organization when people leave and creates a succession plan. 5. Career Development Steps The career development plan at Sartorius Mechatronics will be based on the following three principles. 1. Individuals Need Analysis 2. Organizations need for the individual 3. Succession Planning In the first place it is important for the employee to understand himself. Though it may sound philosophical, this is the most important step in career development planning. Once the individual is clear as to what he is and what he wants to achieve it becomes very clear for the organization to create a fit according to his aspirations. It is very important in this case that most the individual and the organization set realistic targets and goals. It is also important for the HR department to convey the existing levels of skills and knowledge to the individual. Many times employees are in a world of their own and think they are doing great jobs. At the end of the day however they
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may only be fighting fire and not doing any value addition. Contribution to the company should be gauged not by the number of hours spent on the job but by the value addition an individual is able to do. Succession planning means identifying high performing individuals who can fill in senior positions in the organization. When an employee knows that in a few years time he has to fit into the shoes of his senior he has clear-cut goals worked. Out. His mind is now on achieving this growth plan and he is more focused and productive at his job. The biggest advantage is that the employee is now not bothered about changing jobs but focuses on his career development. This responsibility also brings increased control over ones career development, and a more stimulating work life. Managers can take charge of their careers by self-assessment, identifying their goals, and bridging gaps between their current situation and the desired outcome by upgrading their skills. First, managers should assess their current skill set and identify a new one, the knowledge and experiences they would like to acquire. Then, they must assess if their professional goals are in sync with the organizations goals, mission and vision. At Sartorius Mechatronics we need a career development program where the individual himself drafts his development plans after consulting with the management.

.
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[1]India 2007].

Brand

Equity

Foundation,

Manufacturing

http://www.ibef.org/economy/manufacturing.aspx [Accessed 30th October [1] The Economic Times, India fails to deliver the goods http://economictimes.indiatimes.com/articleshow/2536746.cms [Accessed 30th October 2007] [2] Sudip Bandyopadhyay, The New Gold Rush http://www.financialexpress.com/news/The-new-gold-rush/238631/3 [Accessed 30th October 2007]

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