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Managing Change in Organisations

Master of Business Administration Assignment Programme Title: University of Wales MBA (Project Management) Student Full Name: Raji Shakirudeen Damilare Student STU number: STU32417 Student Email Address: [email protected] Module Name: Managing Change in Organisations Word Count: 4273 words Submission Deadline: 16 July, 2012 TABLE OF CONTENTS CHAPTERPAGE CHAPTERS CHAPTER 1 – TASK 1 3 – 5 * Introduction3 * Nature and Scope of Change3 * Major Drivers of Change4 CHAPTER 2 – TASK 26 – 10 * Key Issues and Challenges6 * Action plan 9 CHAPTER 3 – TASK 311 – 14 * Change implementation 11

CHAPTER 4 – Task 415 – 16 * Change success 15 * Conclusion 16 REFERENCES 17 CHAPTER 1 TASK 1 1.00INTRODUCTION Background: Operational wastes come with a lot of cost and it is generated in many forms within an operational system.

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The intention of any profit making organisation is to maximize customer’s values and yet minimize the waste. Aim and Structure: The assignment will identify areas that will be compelled by the Total performance management TPM as an improvement to the existing system. It will analyse the key contents and benefits of TPM implementation.

It does also seek to outline the scope of the change, dealing with key issues and providing actions plans using relevant models. The assignment will evaluate the change models application during the implementation phase, measure in milestones the change success and provide adequate feedback on success recorded. 1. 10NATURE AND SCOPE OF CHANGE Meeting production targets will not be enough anymore to judge production performance if records of customer complaints, rework or defects, overproduction, over processing, delayed inventory, human and equipment breakdowns, administrative delays caused by the bureaucratic setup and low team spirit.

Total performance management TPM is an effective performance pillar with nine key components that is designed to completely re-engineer the system, integrate functions and take functional expertise into the value creation process. In particular, it is focused on supporting frontline personnel and frontline leaders to eliminate operational waste that will guarantee the optimization of all manufacturing and production processes. The TPM pillar descriptors to be used are: 1. Autonomous Maintenance: This pillar aims to improve equipment reliability through equipment care. . Planned Maintenance: This is a step by step process for improving facility maintenance. 3. Education and Training: This pillar enhances focused knowledge and capability building. 4. Focused Improvement: This pillar provides a structured method to identify and prevent problems. 5. Early Management: This pillar is directed towards the development, design and implementation of new technology and strategy that will cope with the future. 6. Quality Maintenance: This pillar aims to create a system incapable of producing quality defects. . Office: This pillar focuses on ensuring LEAN and error free business processes. 8. Safety Health Environment: This pillar aims to ensure elimination of unsafe behaviours and conditions. 9. LEAN Factory: This pillar focuses on LEAN Thinking specifically applied to logistics management. NCE Introduction (2009, pg 8) 1. 20MAJOR DRIVERS OF CHANGE Key drivers of change are listed and described as follows: Improved Production performance: Production performance is greatly affected by incessant machine and human breakdown.

It will be necessary to implement a comprehensive shift management programme and strategic maintenance management system to improve the system. Re-engineered Inventory management: Factory inventory tracking system has been poorly managed, thereby impacting on consumables and spare parts management. Maintenance management system is undermined or sometimes ignored as a result of poor inventory control. Inventory management needs to be re-structured to speed up the existing system processes, by providing an effective system application tracking software that will eliminate the threat of delay and low productivity.

Optimizing logistical management: Raw materials stock management continues to be affected by late deliveries and poor stock management system. Production plans are disrupted, production volumes are not met and consumers are faced with products scarcity. Early management is required and implementation of a comprehensive system application tracking software that will re-structure the logistical management system to cope with increasing activities. Minimised operational cost: Defected products are separated during production and routine quality checks.

Products are also return from markets for quality reasons, thereby resulting to rework and reprocessing which will increase the operational cost of producing a product more than ones. Total quality management strategy will be required at the shop floor. Customer delight: Series of customer complaints have been recorded on products defect, short counting, late delivery and products scarcity. Scarcity provides the advantage to competitors to fill the vacuum created by our ineffectiveness and poor operational management. Market growth:

Market projection have shown a steady 10 % annually increase, which means that the total business will be tripled in the next 10 years (MBS, 2009). This forecast has proven to be realistic and achievable from the growth trend recorded in the past ten years. NCE document (2009) Total performance management system will enhance manufacturing and production performance, positioning us for the future opportunity. Excel in compliance: Factory’s existing quality, safety and environment system standards and guidelines are currently managed independently.

As these systems are interrelated, they will be integrated into a single management system. This will allow a simplified process for compliance, auditing and improved focus on the specific compliance aspects. Government policies must be fully adhered to enjoy an enabling environment and imbibe best practices within the organisation. Creating Competitive advantage: Part of the main drivers of change is the presence of a strong competitor that is working hard to take over the market. In the modern world of advanced technology, trade secrets cannot be the only advantage that must be possessed.

All competitive gaps that are created must be closed by ensuring availability of quality products to the market, delighting consumers at affordable price. Improved marketing strategy will be appropriate. CHAPTER 2 TASK 2 2. 00KEY ISSUES AND CHALLENGES This chapter is expected to identify and define major issues and challenges that have resulted to the generation of operational waste. The cause and effect analysis (Fishbone diagram) will be adopted to define the major problems, brainstorming will be achieved applying the affinity chart that will help categorise related issues and identify the major causes of the problem through Pareto.

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Problem Definition: Operational wastes have been recorded in so many forms across all major departments. Waste is not anymore limited to tangible and physical objects, but has spread deeply into key aspects of daily operations. Failure to meet production target is a major waste, which can result to increasing production cost, products scarcity and quality issues hereby posing a huge risk to the system. Brainstorming What are the major causes of Operational waste that have been identified in the system?

Collective ideas are highly needed at this stage of problem solving, where key players with common objective brainstorm and come up with pool of ideas or suggestion that could lead to the actual cause of operational waste. After a long brainstorming session and thorough investigation, the change management team have come up with list of possible causes of operational waste generated from log sheets across the departments. The group contains different member from different school of thought, which have resulted to the initial generation of a large list of possible causes of the challenge.

The list was streamlined at random and major possible causes where picked and listed in the table below; System Failure| Lack of operational knowledge| Increased production cost| Customer compliant| Rework / Defects| Production targets failure| Weak quality management system| Lack LEAN mindset| Poor logistics management| Poor inventory management| Ageing equipments| Low production output & performance| Raw material variation| Finished product late delivery| Poor production output| Manual operations| Poor maintenance management system| Less commitment & Engagement| Defected products| Equipment Breakdowns| Safety issues| Poor communication| Poor mindset / Behaviour| Network disruption & Failure| Figure 2. 0. 01 Random selection of major problems The Affinity diagram will help regroup and sort listed problems into related categories in the 6Ms format as illustrated below; People Machinery Ageing Equipment Low production output Poor operational knowledge Less commitment Low production performance Safety issues Poor production output Poor communication Poor mindset / Behaviour Manual operation Equipment breakdown Material Raw material variation Rework / Defect System

Poor logistics management Production target failure Late delivery of finished products Checks / Control Poor maintenance management Network disruption Weak quality management Increased production cost Process System failure Lack of LEAN mindset Defected / Rejected products Customer complaint Poor inventory management Figure 2. 0. 02 Affinity chart for Operational waste Identify major causes: The problems illustrated in the affinity chart in figure 2. 1. 01, shows a list of possible causes of the problem, categorising them into key six major categories that could be the summary of the possible causes of the problem.

The cause and effect diagram will provide a clearer picture and additional insight to further link the possible problems from respective sources showing the potential primary and secondary source of the problem, based on the findings of the change team. The major problems have been clearly identified and linked into various sources in a cause and effect diagram as shown in figure 2. 1. 02 below, it is imperative to analyse further the frequency of occurrence of these problems using Pareto. The referring log sheet shows the rate of recurrence of some problems more than the other and clearly defines the effect on daily operations. Figure 2. 0. 03 Cause and Effect diagram for operational waste Figure 2. 0. 4 Pareto chart for operational waste Referring to the Pareto chart above in figure 2. 1. 03, it shows clearly that “low production output” and “production target failure” have occurred more frequently than “low production performance” and others with same frequency of occurrence. The occurrence of most of the listed problems seem on the high side and needed to be treated as such, having recorded low incidence on problems like “manual operation”, “raw material variation” and “network disruption” which should not be underrated, has it is assumed that most of the major problems recorded could have triggered them as remnants.

This invariably indicates that when the bigger problems are completely resolved, it takes care of the ones with low occurrence. The machinery category is the highest contributor of the operational waste, ranging from the machine condition to operations, but seconded by the people category that have in actual sense contributed the largest share of the problems that have made the system unhealthy. Checks, system and process category have their own share in terms of occurrence recorded, this makes it difficult to ignore any of the listed problems no matter how little, because it could develop to a complex and epidemic challenge that will take longer time to solve.

Operational waste action plan Prepared by: Change management team. Summary: Operational waste has been generated across the 6 categories of challenges recorded in the organisation, translating clearly the areas that require swift response to change and improvement. The problem solving techniques adopted have identified the root cause of the operational waste and the major area that requires concentration. It is imperative to prepare an action plan to tackle the listed challenges. Solution: The main goal is to implement Total performance management TPM into all functions as the solution to operational waste. 2. 10ACTION PLAN Goals| Measures| Responsible| Target Date|

To provide a unique maintenance strategy (Autonomous and planned maintenance). | Perform daily operational review at the shop floor, weekly operational review at the management level to track improvement and report achievements. Report weekly maintenance plan and execution. Measure line performance and efficiency against set target. | OperationsOperationsManagement| January, 2013January, 2013January, 2013| To lay more emphasis on personnel training and development. | Get training feedback from trainees. Subject trainees to knowledge checks and exercises. Track personnel improvement against line performance. Use performance evaluation to appraise personnel. | HR| January, 2013| To improve in quality management system. Provide in-line quality checks system. Record defects and investigate the root cause. Embark on monthly market visit. Record batch sampling quality. Communicate quality status monthly. | Quality assurance| January, 2013| To be safety conscious at all time| Commence SHE observation and report area weekly safety status. Perform random safety checks. Carryout monthly safety drill to check and re-communicate awareness. | Operation / Management| January, 2013| To introduce early management approach. | Provide detailed template on early management programming. Provide feedback from early management plan and communicate the achievement on implementation. Management| April, 2013| To implement LEAN thinking, system and mindset. | Outline system layout in LEAN concept and map out areas according to compliance. Track awareness level in all staff. Check LEAN mindset reflection in reporting and follow-up. Report cost saving from LEAN implementation. | Operation / Management. | July, 2013| To focus more on continuous improvement. | List areas of continuous improvement, outline changes and business advantage. Compare changes “ before and after”Track improvement progress against global objectives. | Operation / Management. | November, 2013| Fig 2. 1. 01 Action plan for the implementation of TPM CHAPTER 3 TASK 3 3. 0 CHANGE IMPLEMENTATION Change implementation requires strategic and logical approach which can only be analysed using basic change management models that clearly describes the steps to effective implementation of change. The change implementation will be evaluated in more than one change management model to better outline the model that will be more effective to this particular change implementation. Kurt Lewin and John Kotter models of change management will be critically evaluated as the options for the implementation of TPM. The models will be compared to properly decide on the best option the managers can adopt during implementation.

Kurt Lewin Model: Lewin (1951) Model gives simpler overview of change implementation, although it is assumed that conditions exist because of competing forces that are in equilibrium. To effect any change, the force must be adjusted. Cited by F. Ashton Blog (2010) Change or Transitional Refreeze Unfreeze Lewin model comes in 3 stages namely; unfreeze, change or transition and refreeze. The idea is focussed at the implementation of change in an organisation that is already accustomed to a particular mindset and ideology. Existing mindset, ideology, system, attitude and performance TPM fully integrated as a guide to excellent performance. Implementation of Total performance management Fig 3. 0. 1 Lewin Change model Kotter Model: Kotter’s (1996) 8 steps model of change is a top down approach that provides a wider range for change implementation. This change model is linear and it predicts the change processes in steps that identify core areas that should never be neglected if a change where to be effective. Fig 3. 0. 02 Kotter Change model Source: The Change Management Blog (2009) Model Comparison At the first stage of Lewin’s model of change, leadership comes up with the unfreeze strategy that will alter or disengage the existing system practices.

It targets the root cause of the problem, by providing the best assumption using the force field analysis to factor out the pros and cons before considering implementation. Unfreezing is carried out at the leadership level, based on assumptions from the analysis. Unlike the first stage in Kotter’s model that clearly emphasise on the need to first establish a sense of urgency from top-down, by carrying along all members of staff from the inception of the change implementation, sharing with them the reason change is necessary at the time and also help to identify the protagonist and antagonist to the change. Although the force field analysis applied in unfreezing stage also consider the driving and refraining force for the change, but it is clearly based on assumptions.

The Kotter’s model starts change communication from the first step of implementation, where preliminary information have been provided for all to brainstorm about, not streamlining it only to the leadership. The second step is aimed at constituting a powerful coalition that will form the formidable, experienced and result focussed change management team. Rather, in Lewin’s model change management team are selected are at earlier stage based on management’s decision. Creating a vision for change is the third step in Kotter’s model, where all the ideas, thoughts and brainstorming that have been collected by the change management team are streamlined and integrated into company’s objectives and vision. Perhaps no idea is foolish and the collective enquiry to solve major issues gives employee the sense of ownership and esponsibility towards achieving the collective goal. Lewin’s model distorts an existing system with the intention of introducing or improving a system. This idea and vision comes from the management, who have practically analysed the major problems based on their experiences and knowledge of the company’s objectives. The transition stage, which is Lewin’s second stage for change modelling provides the actual implementation of change. This stage is the roll out phase of change to all employees “official launching”. This stage seems to be the hardest as the existing ideology, mindset and processes are unfrozen either to extinguish or modify to a new system.

The fear of the unknown and resistance may be recorded. That is why Kotter and Lewin emphasise more on communication at this stage. Communication becomes the tools for change campaign. At this stage continuous training and coaching is very key to acceptability and embrace. Kotter identifies communication as a day to day affair and ensuring that antagonist are converted and the supporters are maintained and developed to live the change. Lewin’s transition stage encompasses communication in all forms. Perhaps might take more time than anticipated to achieve the level of acceptance needed, it requires consistent coaching and training to get the buy-in of all employees.

Kotter insist that after communication have been initiated, though it is a continuous process but will definitely meet some deadlocks, ranging from the unacceptability, fear of the unknown, structures that do not support the change and the vision. The fifth stage identifies the major deadlocks and provides the right approach to solving them. Lewin’s transitional stage give a lot of room for neglect of some major deadlock identification, hereby living some elements like virus behind, that could develop to catastrophe in the future or even hinder this change process. Lewin’s last stage is the refreezing stage, stability establishment is the main objective once the change has been effected and accepted as part and parcel of the system. The intention is to strengthen and reinforce the change implementation, allowing for full integration by all functions.

The new change is freeze and continues to monitor progress of implementation, bearing in mind that change will be continuous and can never be permanent. Theoretically, Lewin target the adjustment of the force field to adequately buy-in employees to acceptance and embrace of the change. The change is integrated into the company’s structure and system and refreezes as the new outlook of the organisation. Part of the reason the Lewin’s model could take more time to be fully integrated is the lack of comprehensive practical application that influence acceptance. It is important to target a feedback mechanism that will encourage a swift change embrace.

Kotter’s sixth step encourages the need to create a short-term wins that will motivate employees further. Employees deserve first hand information on the benefits recorded so far to elevate their confidence and also management to gain more support from all. The best way is to set milestones where employee’s achievements can be celebrated and recognised. Kotter believes in continuous improvement, that is his main model in the seventh step. Change cannot be cast on stone that will not require further improvement; it requires building upon to achieve maximum effectiveness. The short-term win has various advantages, part of it is the opportunity to see other areas that need improvements and explore other options to achieving set objectives.

Lewin’s refreeze does not show the required detail to record areas of further improvement, because the mindset of the employee already fixed on the refreeze syndrome. Managers should consider the Kotter’s model as it also adopts the concept of refreezing, but in a different manner. He believes that when change is stick completely into the system, it should become parts and parcel of the organisation, like a revised constitution that have been adopted, but requires further improvements. It re-emphasises the need to continuously maintain the support of the management and all employees to avoid falling back to the initial problem. TASK 4 CHAPTER 4 4. 00 CHANGE SUCCESS

To assess change management effectiveness, leadership needs to focus on measuring the progress of the change implemented to ensure they are moving on the right direction. To achieve this effective implementation, milestones and measure are required to effectively measure the progress and performance of the change. The performance measures are categorised in 7 stages namely: 1. Internal Performance Assessment. When change is assumed to be completely implemented, the organisation needs to be certain of these assumptions. The reason they involve an independent internal audit team to track change implementation progress, using the qualitative and quantitative monitoring approach in determining the level of compliance.

Employee change appraisal survey is forwarded to all functions to get the right feedbacks. Individual functions will be audited and informed of areas that still require more attention, compliance and improvements. At this stage, the organisation is certain of the level of compliance and areas that requires more concentration before the pre-assessment and full assessment that will be carried out by external auditors. This usually takes about 3 months before pre-assessment. 2. Performance Assessment. It is important that a pre-assessment is done after the first nine month of change implementation to effectively measure the level of compliance and adherence to the new change.

The outcome of each pre-assessment must define the status of the change as to “what the goals are “, “where we are now” and “where we are going”. The pre-assessment must also measure individual progress using a five-level commitment scale to monitor the commitment level of employees during implementation and then choose specific strategies to help individuals progress through the five levels. Level 1: Awareness: Measure the level of awareness in all functions. Level 2: Acceptance: Measure level of acceptance. Level 3: Application: Measure skill level of employees. Level 4: Adoption: Measure level of adoption and reflection in employee’s daily activity. Level 5: Advocacy: Share and accept feedback amongst employees.

The full assessment (gate opening) will be done six month after pre-assessment certification and correction of other identified areas of improvement and a yearly post-assessment will also be carried out. 3. Perform Customer Satisfaction Survey This is the next step of assessment performance provide a gauging mechanism to monitor customer satisfaction as a tool to benchmark with acclaimed internal operational success. Feedback is vital from the customers and are closely monitored, recorded and acted upon immediately. This is a continuous exercise. 4. Measure the Volume of Defects We cannot hide from the fact that perfection is nearly impossible, but we must put measures in place to track and check level of amount of rework or defected recorded compare difference with the previous system.

System must be in place to ensure that defects are be recorded as they occur and subjected to root cause analysis to check if we still maintain residual problems and follow is the rectification. Key performance indicator KPI is to see reducing trend in the volume of defects generated over a period of time, showing the percentage of improvement. 5. Measure the Volume of Failed Changes When measuring success rate of changes being implemented, we must be able to define “what is” and “what is not” a successful change, and the criteria being used for each definition. SMART (specific, measurable, achievable, relevant and timely) criteria must be in place where changes are reviewed for success.

The KPI is to see the level of compliance increasing, showing the percentage of improvement. 6. Measure the Services Performance Service performance is wide to measure in one piece, so functions shall have a different KPI to measure their performances which is then cascaded to the organisation. Internal and external auditors perform assessment exercise to check impact on indicators, compliance and adherence to the operational documents. 7. Calculate the Return on Investment The main purpose for the implementation of Total performance management is to delight our customers, create competitive advantage and enhance operational performance. The change implementation comes with cost and it must also beget remarkable financial benefits.

We must measure and record the saving generated across all functions. Source: Mark, S (2008, pp 2-8) 4. 01 CONCLUSION To reduce operational waste to an acceptable state, the introduction of Total performance management is the solution. We have defined the major causes and the possible solution to be implemented. Solution comes with measures and deadlines, if achieved will provide the positive benefit that is targeted. The benefits from change implementation are targeted to continuously meet company’s objectives in delighting customer’s satisfaction, creating competitive advantage and compliance. The objective is to maximise profit at the best minimum cost.

Measure, milestone and deadlines are in place, which are guided by the application of renowned change management models to ensure the right approach to introducing a new change conforms to the company’s culture and objectives. Effective application of the control and monitoring mechanism to track effective transition as illustrated in change measures have enabled the changes to be effective. We have tracked and recorded minor deficiencies which are a result at the acceptance stage of TPM have since been resolved. Positive feedbacks received from customers and remarkable records of decreased customer complaints, because of the new quality management check in-house that has guided quality production output. REFERENCES Woolnough, M. , 2009. Glossary for Nestle continuous excellence NCE document, Nigeria Pg 2 – 3 Ashton, F. , 2010. Lewin Model (K. Lewin, 1951).

Available from: http://www. ashtonfourie. com Blog (Accessed 6 July 2012) Kotter, J. , 1996. Leading Change. Available from: http://www. mindtools. com (Accessed 6 July 2012) Mark, S. , 2008. Measuring success- Ideas on how to show that real benefits are being delivered, Fox IT, Pg 2 – 8 Holger, N. , 2009. Change Model 3: John Kotter’s 8 Steps of Leading Change. Available from: http://www. change-management-blog. com (Accessed 13 July 2012) Lewin Model. Available from: http://www. change-management-coach. com. (Accessed 6 July 2012) Nestle continuous excellence NCE Introduction VI. 6. Available from: http://www. intranet. nestle. com/NCE (Accessed 6 July 2012)

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