How to Effectively Manage Change in Your Shop

It’s how we implement change that can make the difference between success and failure.


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No matter what our attitude, change is inevitable. It’s how we implement change that can make the difference between success and abysmal failure. Each time a company attempts to change and fails, it just makes it that much harder to convince employees that the next time will be different. Let’s compare forays into change management that took place at real companies.


Management Involvement

Management involvement in change management can be a two-edged sword as the following examples illustrate.

Example 1
At Company A, the launch of every new product was plagued with setbacks and poor quality, the sales force had no pre-training and thus were reluctant to sell the unfamiliar products, new products often didn’t meet the needs of customers, and rework was constant. As customers began fading away, the CEO demanded rapid improvements to the situation.

The problem? The CEO did not articulate clearly exactly what he wanted to improve nor did he allocate any money or time to make the improvements. Team members assigned to tackle the problem were expected to perform their normal daily tasks and meet their normal deadlines and only use tools that were already available within the company. The team members were already overworked and the existing tools were a major part of the inefficiencies. The CEO meddled in every decision the team made, undercutting the authority of the team and bringing morale to an all-time low. The CEO had merely paid lip service to making improvements without giving the team the resources or concrete, achievable objectives that were required.

Example 2
Company B was facing a completely different story. New product launches were handled so well that production could not keep up with the orders that poured in. The plant manager hand-picked a cross-departmental team to tackle the problem of increasing production without sacrificing customer satisfaction. The team met on a daily basis and the plant manager met with the team at least once a week. The project was given top priority and feedback from all employees was encouraged. The team had full responsibility and authority to make necessary changes. Only when problems were encountered did the plant manager step in to make sure the project stayed on track.

Over the course of three months the team implemented production improvements that had orders flowing out the door. The active involvement of the plant manager and his complete confidence in the people on the team ensured the success of the project.
Managers need to get the right people on the team, provide clear objectives, have confidence in their abilities, make team members accountable, and then stand back.


Same Problem, Two Solutions

The saying “Two heads are better than one” applies by a factor of 10 when a company undertakes manufacturing improvements.

Example 1
At Company A, unfinished parts would queue up in front of the CNC machines even though the machines were running at maximum capacity. Orders were late and customers were getting angry. The production supervisor got approval to purchase three new machining centers to replace some of the old equipment. Soon the new high-performance machines were installed and ready to run.

The problem? The company had only one CNC programmer who did not receive training on the new machines until one week before they were actually on the floor. Plus, the outdated CAM software could not generate CNC programs to take advantage of the new machining capabilities. A plan had never been created for how to convert the hundreds of existing programs, so parts were only re-programmed as orders came in. The production supervisor pointed the finger at the CNC programmer when asked why backorders were piling up. It took the company four months to start making gains from the expensive new machines. Unfortunately, parts started queuing up in front of the older machines farther down the line.

Example 2
Company B had the same problem with parts queuing up, but the problem was intensified by a high scrap rate that caused the rejection of at least 15 percent of the parts that finally came off the production line. A joint team was set up between engineering and production to analyze the problem and increase production. Their goals were to cut the scrap rate to less than 6 percent, meet shipment goals 100 percent of the time and improve overall quality at every step.

The team identified several underlying problems: setups took too long, new machinists made mistakes because they didn’t have the information they needed, experienced machinists made mistakes by relying on memory instead of pulling blueprints, worn tools caused parts to be out of tolerance, machinists had to stop production to wait for inspectors, and some of the castings were difficult to machine under the best of circumstances.

The engineers went to work redesigning the problem castings and designing new fixtures to reduce setups. The production crew went to work setting up a central tool crib with a full-time clerk who delivered all the necessary tools directly to the machinist at the start of every job. Engineering, production and quality assurance worked together to produce easy-to-read manufacturing instructions that provided all of the information a machinist needed on one side of the page and first article inspection instructions on the other. Changes were tested, improved and retested before being released to full production. Within three months scrap levels fell below 5 percent and customer satisfaction went through the roof as a result of timely deliveries and higher-than-expected quality.

The most obvious solution isn’t always the best solution. Getting different perspectives provides a much better picture of the problem and can offer more creative solutions. Employees feel more invested in their company when their voices are heard.


Reducing the Resistance to Change

The chief obstacle to change is resistance from employees, especially managers. Employees fear that improvements will lead to job losses and managers fear that change will expose a lack of competence. To get people to change, a company needs to change how performance is measured. In the previous example of Company B, production employees were no longer measured on parts per hour. Instead, four new metrics were introduced that shifted the focus to goals that combined individual employee performance with overall company performance.

The new metrics were: daily shipments (making the right parts at the right time), housekeeping (elimination of waste), overall scrap (reduction in rework) and attendance (optimizing overhead). These metrics were applied to every employee—from engineers to accountants to managers. Financial incentives were tied to the performance metrics, getting everyone interested in the improvement process.

The most important advice for any company looking to achieve great results is available in the book “Good to Great” by Jim Collins. As discussed in the book, get the right people on the bus, the wrong people off the bus, and then make sure the right people are in the right seats. You’ll be amazed where you can go.