The Owner Who Approves Everything
Rahim Textiles is a small garment unit in Gazipur with 48 sewing operators, 6 helpers, 3 line supervisors and one owner-manager. The owner approves every purchase above BDT 2,000, signs every leave request and personally checks each shipment before dispatch. The three supervisors report directly to him, and each supervisor oversees 18 operators. Last quarter, 11 of 40 export orders shipped late and two buyers issued written warnings. Three supervisors left within twelve months, each saying they had 'no authority to solve anything'. The owner refuses to hire a production manager because it would 'add a salary and slow decisions'. A buyer now offers a larger order that would require a second shift of 25 operators.
1. Using span of control and centralisation, explain what is actually causing the late shipments. Is the owner's own span of control too wide or too narrow?
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The owner's own span is narrow, not wide: three direct reports. Each supervisor's span is 18 operators, which is wide for a line that needs in-process quality checks. But span alone does not explain 11 late orders out of 40. The pattern - lateness plus three supervisors resigning 'with no authority' - points to centralisation of decision rights. Every purchase above BDT 2,000, every leave request and every shipment passes one desk, so routine decisions queue behind the owner's other work and line stoppages wait for approval. Supervisors hold responsibility without authority, which explains the turnover.
Diagnosis: the structure has one decision node and no middle layer. The fix is not mainly to widen or narrow spans but to push routine operating decisions down and keep only exceptions and strategy with the owner. A second shift cannot run on this design at all, because 25 new operators would add another stream of approvals to the same desk.
2. Propose a specific structure and written delegation limits for the second shift. Include numbers where they matter.
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Add one production manager between the owner and the floor: owner → production manager → supervisors → operators. Place the 25 new operators under 2 supervisors (12-13 each) and rebalance the existing 48 across the other 3 (16 each). Keep every supervisor's span at or below 18.
Written limits:
- supervisor: may commit up to BDT 5,000 and stop the line without approval;
- production manager: up to BDT 25,000, casual hiring, overtime up to 10 hours a week;
- owner: above BDT 25,000, new buyers, capital spending.
Cost test: production manager BDT 50,000 plus one extra supervisor BDT 28,000 = BDT 78,000 a month. Before approving, compare that with the cost of 11 late shipments - chargebacks, air freight and two buyers at risk. If that figure is not available, obtain it first; the second shift should be accepted only with the number on paper.
3. What is the main risk of delegating purchasing authority, and what controls would you put in place that do not recreate the bottleneck?
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Main risk: purchase fraud and collusion - a supervisor splitting orders below the BDT 5,000 limit, or steering orders to a related supplier at inflated prices. The second risk is that delegation becomes abandonment and quality falls further.
Controls that do not recreate the bottleneck:
- three written quotations above BDT 10,000, kept on file rather than pre-approved;
- a vendor master list; adding a supplier needs the production manager's sign-off;
- segregation: the person who orders is not the person who receives goods or files the invoice;
- monthly reconciliation of purchases against bank payments by the owner or accountant;
- exception reporting: only variances above 5% reach the owner;
- a surprise audit twice a year and a confidential route to report pressure to split orders.
Sample-based, after-the-fact controls catch fraud without putting the owner back into every BDT 2,000 decision.