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Change Management in Manufacturing

Published: · Last updated: · 19 min Lesezeit

Change and change management is something every organization must deal with, regardless of industry or processes. Companies must actively monitor their growth, opportunities, threats, risks, and strengths while remaining agile enough to pivot. 

Twenty years ago, it was possible to make decisions for months or even years. But with the rapid digital transformation occurring in most industries and the explosion of data-exploiting abilities, reacting slowly is not only inadvisable but can also be suicidal. 

For manufacturing companies, this fact is even more imperative now than ever before. As technological advances create smarter manufacturing processes, along with the ever-present need to produce in the most cost-effective way possible, companies must continuously remain on their toes to identify and exploit opportunities. 

Whether your manufacturing company is seeking to predict industry trends or react quickly to them, change management is crucial to sustained growth. 

What is change management?

Every plan, process, or procedure to create a company that is ready for change whenever needed comes within change management. It involves creating dynamic organizations that understand the fact of change, prepares adequately for it, and take advantage at the right time. 

Although it is natural to only think of change management as something necessary for transformative pivots, this is not always the case. Organizations are typically experiencing internal and external change impulses all the time, both big and small. Some may come in the form of manufacturing process changes needed to optimize small parts of the production line. Simultaneously, others include the significant changes that affect an entire organization, bottom-up, or top-down. 

According to CEB, a technology best practices and insights company, change is even more common than we think. They find that the average organization faced 5 crucial changes within the past three years. Besides, 73% of companies will face more changes within the next three years. Some of the most common types of change initiatives they see companies experience include: 

  • Culture change 
  • Leadership transition 
  • Market expansion 
  • Merger or acquisition
  • Restructuring 

Considering that change happens so often to organizations, it makes sense to ensure dedicated systems to manage and usher in change. It is especially so because, due to various factors we will discuss later, change initiatives do not always succeed. 

CEB reports that of the 400+ change initiatives they examined, only 34% were successful. Of the rest, 50% failed, and 16% yielded mixed results. It hits home the need to prepare for change adequately. 

Digitization in change management

For most companies, the concept of change management usually involves an evolution of technical and IT resources. This leads to digitization, which can be considered one of the aspects of change management initiatives.

Many definitions have been offered to explain digitization, but a simple illustration will suffice here. “Digitization is the transformation of processes, media and other objects from formerly physical, analog to digital.” Although simple, this definition captures the essence of digitization.

Companies with well-developed or outdated production processes often pursue digitization to transition to a more modern way. While the underlying processes or products may remain essentially unchanged, digitization is often introduced to complement what is already in place.

Companies also have different goals for digitization. They may be thinking of really destructively changing their business model or products, making big changes all over the place. Or they may be considering supporting existing products with digital services, leading them to expand the scope of their current capabilities or modernize them. Finally, they may instead focus on their processes, making the products and the business itself more digital.

You can also make a distinction between an IT project and what we call a digital change project. Some of the changes we mentioned above are IT changes. Converting an analog process to a digital system without significant changes to core processes or methods is usually IT-oriented. That is also true for converting a previous IT solution to a new, updated version, such as a migration from FORCAM to FORCAM Force.

However, a digital change project has a deeper focus than a pure IT project. It can impact products, processes, and even the structure of the organization itself. Here, there is a change at the core of the methods and the way things are done. It is the aspect we will focus more on in this article.

Why change management is important in manufacturing

Manufacturing in the most cost-effective way possible is a goal for most manufacturers, regardless of size. They want to be sure they are leveraging the right technologies (and methodologies) to ensure they can remain profitable and in pace with the competition. 

However, being fleet-footed enough to beat the competition or catch on to new trends’ coattails depends on being “change-ready”. It might not always be possible in a manufacturing industry subject to regulations and standards that prioritize safety over speed. Besides, a large part of change management involves getting employees, who have become comfortable with familiar workflows, to adapt to change.

As a result, the policies and processes become locked in after being made. Numerous rely on what has been described as the “unfreeze-change-refreeze” model to implement change. In this environment, effecting change fast enough to benefit at the right time can be complicated – crucially because the organization is not change-ready. 

Many companies are adopting a ground-up mentality to change management to circumvent this problem. Rather than sanctioning massive IT overhauls or calling in the specialists at the point where change is necessary, these organizations treat change as a part of their initial structure. 

There are many ways of achieving this. One is by adopting the right methodologies, such as lean and agile, to ensure the organization itself is mobile and flexible. Another is by housing the production process on ERP or turnkey solutions that promote flexible, change-ready production. 

These solutions help manufacturing companies rapidly scale up or down since they can enjoy fine control over their production processes. For instance, a manufacturing change can typically occur on the shop floor when a line worker discovers an issue in the production process. However, the change process does not stop when a solution is developed to solve the problem. 

A fair change process should go beyond this to store the information centrally and feed it into the design process. This way, engineers are aware of the production line situation and consider that information in ongoing and prospective design iterations. Other departments can also see this information, and the organization maintains a bird’s eye view of how it impacts the entire production process. 

“Progress is a fine word. But its driving force is called change. And change has its enemies.”

Robert Kennedy

Shopfloor management

An interesting aspect of change management in manufacturing to consider is shop floor management. Although changes in a manufacturing organization can occur in many ways, a large portion of these changes occurs on the shop floor.

As we mentioned earlier, an important goal for all manufacturing organizations is to explore how to make production faster, leaner, more innovative, and more cost-effective. Proper operations management is often critical to this effort.

Manufacturing management is the day-to-day process of monitoring the production line – the core areas where the work gets done. It involves analyzing and discussing the current processes on the shop floor and considering what adjustments need to be made. This may involve figuring out what is causing the most problems during the process or how to make the most progress to improve metrics and achieve sustainable growth.

There are three aspects to this management. We have the “go & see” module, which means going to the production line and knowing firsthand what is really happening. Then there’s the process of using the line toolkit to describe and analyze problems and then identify possible solutions. Finally, there is the process confirmation aspect, which is about seeing that new solutions and processes are implemented, as discussed.

As discussed above, good manufacturing management should be part of a process where all departments can provide input on necessary changes, see how the solution is implemented, and work synergistically toward successful change management.

The Change Management Process

Now let’s talk about how a change project is implemented from the first phase of the process and how to ensure success. Although everyone accepts that change is inevitable and desirable in most cases, we still have an unconscious bias against change. As humans, we are creatures of routine, and when someone interferes with that routine, it can make us uncomfortable or even cause us to reject change.

Ensuring a successful outcome depends on following the right process from the beginning. There are three main areas to keep in mind when designing and implementing the process – what will be changed, how will the process work, and what actions are required.

What is being changed?

This is what we would call the work system theory. It is important to have a good idea of the need for change, the specific areas that can be changed, and proper cost-benefit analysis. One methodology we use here at FORCAM is what we call Iterative Process Prototyping.

We start by creating a full playbook of the views of stakeholders, from executive to management to departments, to get a good picture of the expected functionality of the project. This helps us create a blueprint of the requirements and then build a solid technical profile of the expected solution.

In the Executive View, we talk to senior management, executive management, and plant management to establish the strategic goals of the project. Then we move to the Management View, where we talk to the heads of the departments affected by the project, production management, and supporting departments. We can start to map process flows and design flow values that help us see that everyone has the same picture in mind.

Then we work with the technical experts in the production department to clarify the processes and requirements for the project. These are the nuts and bolts of the expected solution and how the solution will work in reality. We also take care to clarify these requirements and compare them with solution components in FORCAM Force or our partner applications to ensure that the solution can work as desired.

The common picture we create here keeps everyone on the same page and ensures that we have a clear strategy and approach, both from a business and technical or IT perspective. It’s also important to remember that requirements can change, so there should be some flexibility in the approach.

How does the process work?

Once we have a clear picture of what needs to be changed, we can move on to the specific process for implementing those changes. Three things are important here – the timeline of the project, the scope of the project, and the maturity level associated with it.

We need to consider what the target timeframe for the project will be. Are we dealing with a project that needs to be fully implemented within a year? Or is it a situation where we want incremental steps over a longer period of time? This has implications for how the process will be managed and controlled.

Next, we look at the scope of the project. Is it a small, process-specific solution in one department? Or is it about standardizing operations management across multiple plants?

Then the maturity of the company or the processes involved comes into play. For some companies, the target process or product has years of experience behind it, so all that is required is the migration and implementation of updated processes. For others, things are very much at the base level, and naturally, these projects will require a bit more in the implementation process.

There may be unplanned events here and major discussions that need to be had internally. So it’s important to plan buffers into the process for those kinds of uncertainties.

What measures are involved?

Finally, it is important to clarify the specific measures that are necessary to bring about a successful change project. A helpful starting point for determining what strategies or actions to take will consider the project team, the project scope, and the urgency of the project.

The team aspect takes into account the level of buy-in already secured for the change and the corporate culture. What is the level of buy-in from management and employees? The project scope and urgency also determine how we can adapt the strategies to the size of the project and how fast it needs to be.

What strategies are actually followed here is fluid. They include the right vision, skills, incentives, resources and a clear plan. However, it is important to keep the theoretical underpinnings firmly in mind. For example, as explained in Kurt Lewin’s field theory, one must assume that performance and productivity will break down in the early stages. You can’t discount the learning curve effects that occur in the beginning, but they can be planned for.

Removing obstacles

Change can be painful, especially for the employees or departments that need to adapt their methods and processes. Therefore, not preparing adequately will be fatal, no matter how beneficial the changes are in theory.

A good framework for implementing change is Kotter’s 8-step model. In addition to following this model, the following points can be key to ensuring user acceptance and a successful outcome:

  • Plan with change in mind: organizations that build their internal structures with change management in mind find it easier to manage change. With a workforce that is used to thinking and working in a flexible and agile manner, it is easier to implement change quickly.
  • Designing for change: organizations that build their internal structures with change management in mind find it easier to manage change. With a workforce that is used to thinking and working in a flexible and agile way, it is easier to implement change quickly.
  • Ensure management support: When transformative change is necessary, it is critical to ensure broad support throughout the organization, especially from management. That way, change initiatives won’t choke on substantial support in the middle of the project.
  • Involve employees: realistically, change is impossible without broad employee participation. Failure to get employees on board can lead to resistance to the initiative and even create operational risks.
  • Comprehensive Planning: Finally, no matter how exciting an opportunity is, it requires proper planning that covers all the bases before embarking on it. Buffers should also be built into the plan to accommodate unforeseen events and activities such as test runs.

Implementing change management the right way

A common way manufacturing companies will often experience change is when they are pressured by significant growth. Quoting a survey by Epicor, the Process Industry Informer observes that almost half of business leaders worry that development puts more pressure on operations, potentially damaging quality. 

However, the problem often stems from not having dedicated IT and organizational infrastructure that encourages change management. In line with this, the survey mentions that almost half of businesses also express concerns about their business IT systems’ capacity to accommodate a more complex or more extensive business model. 

Partnering with a provider that brings a high-performance, future-proof manufacturing solution can remove the IT concern in change management. But this is only one part of the goal, which should be to ensure the organization is ready for change, long before it comes. Some of the things to keep in mind in creating a change-ready organization includes: 

  • Building for change: Organizations that create their internal structures with an eye on change management find it easier to manage change. It is easier to rapidly implement change with a workforce that is used to thinking and working in a flexible, agile manner. 
  • Securing C-suite buy-in: When transformative change is necessary, it is crucial to ensure broad support across the organization, especially in the C-suite. This way, change initiatives will not be starved of substantial support midway through the project. 
  • Getting employees involved: Realistically, change is impossible without broad employee buy-in. Failing to get employees on board may result in resistance to the initiative, and may even lead to operational risk. 
  • Comprehensive planning: Finally, no matter how exciting an opportunity is, it needs adequate planning covering all the bases, before diving into it. The plan should also have buffers integrated into it to account for unforeseen events and activities such as testing. 

Create a change-ready process with FORCAM

FORCAM has supported the world’s largest companies with comprehensive Industrial Internet of Things (IIoT) solutions for years. Our turnkey and freely extensible cloud platform provide companies with the control, transparency, and insights they require to create an intelligent, change-ready manufacturing process. 

Change management is already tricky enough without managing processes across a slew of legacy systems or market-ready solutions. FORCAM integrates the production process in a single platform that encourages rapid, flexible change management. 

Contact us to learn more about how manufacturing companies around the world are enjoying productivity gains with FORCAM. 

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