Mastering Change Management for Manufacturers

Handling the rapidly changing manufacturing landscape. Chris Bustos, FactoryFour’s Senior Solutions Consulting Manager, dives into how manufacturers can master change and set themselves up for success.

Choice Stairways

Manufacturers make a living by being masters of process. Without well-defined processes, a manufacturing organization is in jeopardy of losing business, rising costs, and falling behind their competition. It’s this focus to create a well-oiled machine which often breeds an aversion to change management in a firm’s processes. As such, the phrase, “if it ain’t broke, don’t fix it,” seems to be a fallacy which is unfortunately still followed by many. On one hand, if a firm has been successfully meeting market demand, what’s there to change?

With ongoing advancements in technology continuing to disrupt manufacturers across industries, organizations must push aside this outdated mentality and instead look at how they can best adapt to this rapidly changing landscape.

Challenges to change management

Change can come in many shapes and sizes for manufacturers, from abiding by new ISO standards to rolling out a new manufacturing execution system. Regardless of whether this change is spurred on by corporate objectives of higher revenue, reduced costs, or simply customer demands, the fact is that organizations are pressured to change because change ultimately drives competitive advantage.

Simply stating an organization needs to embrace change and actually doing it are two entirely different things. One of the biggest challenges with instilling change in an organization is gaining buy-in from all stakeholders involved. That means not only middle management and executive leadership but also operators and technicians on the shop floor. However, there are plenty of reasons individuals may be wary to adopt change. For example, increased automation may breed fear for a loss of jobs in foundational positions. Changing industry standards or quality enforcement may require upskilling and additional training, some of which may be difficult for employees to grasp and succeed at. Not to mention that a change in process naturally introduces interruptions to everyday work as implementation and transition occurs. These interruptions require management to perform proper scenario planning in case of significant downtime during the implementation of major changes.

Levels of Operational Maturity

So with a myriad of issues facing organizations looking to embrace change, how can a firm ensure they’ve set themselves up for success? Let’s take for example the strenuous project of rolling out a new manufacturing execution system to the floor. Within the rapidly changing landscape of manufacturing, more and more firms are looking to adopt a new era of MES platforms to support more efficient processes and provide greater visibility into production, among other objectives. Of course, different firms begin at different levels of operational maturity, each presenting a unique set of challenges.

ERP The fewer levels an organization tries to ascend in a single transition, the simpler change management often is. Take for example an organization like Choice Stairways , a high mix and highly custom stair and rail manufacturer based out of Southern Maryland. Through 2019 Choice Stairways sat comfortably as a Level 3 organization in regards to operational maturity. They had systems in place to handle their day-to-day operations, such as an ERP, which were put in place several years prior to help them transition from a Level 2 (based heavily on Excel spreadsheets) to a Level 3 business. Because of their recent upgrade to a Level 3 organization, Choice Stairways had already put in place best practices to handle the change management required in introducing a manufacturing execution system to the business. Their operators were accustomed to a digital-first process through the use of tablets and workstations on the floor and they had already bought into the idea of a technology-driven business.

Setting employees up for success and instilling a culture compatible with the upcoming change required were not Choice Stairways’ only keys to success in elevating their business to a Level 4 organization. According to Heer Rami, a Client Services Manager at FactoryFour, Choice Stairways succeeded in having a smooth implementation of their MES platform because they had a clear vision of what problems they were trying to solve from the start. This vision was supported by choosing a strong project manager to see the implementation through. A key to successfully managing change for a new system’s implementation is having a “project manager that can be sure to set the boundaries of what [the system] should be responsible for and what it shouldn’t internally,” says Heer Rami.

Working with External Vendors

Additionally, for change management surrounding upgrades in technology, it’s critical for organizations to not only have well-defined objectives internally about what these technology changes will help the business achieve, but also a well-defined relationship with any external vendors or partners who will assist in the new technology’s implementation. In an interview with Choice Stairways, when asked about the relationship between our organizations, Steve Headley said that the implementation process of FactoryFour felt “almost like [the client services team] works here.” For many manufacturers however, horror stories abound of multi-year implementations for ERPs or similar systems. Miscommunication, over-engineering, and a failure to stay on the same page with external support teams can hamstring even a well prepared manufacturer when it comes to new technology implementation. To prevent this, manufacturers should ensure their technology provider has a well defined implementation model and a solid grasp of the objectives which must be reached to consider the implementation a success.

While there may be plenty of manufacturers out there already taking the right steps to develop a sustainable change management plan internally, there are of course those that are drowning as they fall behind and look to jump from a Level 1 or 2 in organizational maturity to, say a Level 4 or 5 in an attempt to stave off rival firms. These larger more dramatic jumps in organizational maturity can be far more taxing on a firm’s employees and require even greater levels of preparation to ensure a successful transition.

Keys to Successful Change Management

So again, what are the keys to bringing successful change management to a manufacturing organization?

  1. Gain stakeholder buy-in and establish critical relationships: For more dramatic changes, it’s crucial to lead with the why behind the change before discussing the how in order to successfully gain buy-in. As mentioned previously, critical relationships are not only with internal parties but also external parties in the case of technological changes.
  2. Building a culture of flexibility: This is something which can be started immediately in any organization. By establishing a culture of flexibility internally, firms can alleviate their employees of the “if it ain’t broke don’t fix it” mindset. As with any major culture change, this step is best served from the top down. Without executive sponsorship and displays of commitment, calls of culture change may be seen as a facade that is purely optional by employees. As a best practice, executives should look to endorse a strong project manager to lead the change internally and empower them to make the decisions necessary for success.
  3. Set those who will be impacted by the change up for success: That means incentivizing the right behavior and being open and honest with employees on how certain changes will impact their jobs.

As manufacturers continue their ascent up the organizational maturity ladder it would behoove them to establish these change management foundations as they look towards the next horizon of manufacturing