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«Change Management with Lean approach How the benefits from Lean can be applied in Change Management Master of Science Thesis in the Master’s ...»

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5. Resistance - As seen from the factors to why many change effort fail, it is due to resistance of change from the employees. Resistance is highly probable to happen in every change process. To decrease the risks of resistance to occur, it is important to involve, communicate, support, listen and allocate CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 20 responsibilities. The fact that none of the models brings up the issue of resistance, (except for Lewin's model where it is described as restraining forces), make it even more essential and significant.

6. Planning - Before any project, planning is compulsory. This includes budget, timeline, risks, training, responsibilities etc. The plan should be accessible for everyone involved to minimize uncertainties. Planning is brought up in The Organizational Change Framework and The Dalziel and Schoover Model.

7. Employee ownership - In order to make the change sustainable not making it go back to its initial form, fostering ownership of the change among the employees can be a solution. Lewin's third step, refreezing is about making the change permanent, this is also brought up by The Dalziel and Schoover Model.

8. Leadership - The Lippitt's Phases of Change Theory, The Dalziel and Schoover Model and The Organizational Change Framework emphasizes all the essence of the leader's role during the change. The models are described from a change leader's perspective and how the change leader has the major responsibilities etc.

9. Roles - Having the right skills to make the change possible and letting everyone know what to do is often brought up by the different methods, especially in The Dalziel and Schoover Model.

10. Communication - As a last factor, and maybe as the most important one, is to communicate. Communication is essential, in all its forms, verbal, digital etc.

All information related to the project should be accessible to all involved at any time. This prevents misunderstandings and knowledge can easier be transmitted through the organization.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35

2.2 Lean There are hundreds or thousands of different theories and methods to find about the area of Change Management. The few that are described in this thesis are just a fraction of all. But as seen from the essential factors and also the reasons to why many attempts fail, it is possible to find a pattern among them. The most essential in order to succeed with any organizational change is to focus on the employees and your relation to them and to the stakeholders of the change in general. Now, since the aim of this thesis is to investigate how the benefits of Lean can be applied in Change Management, there will be less focus on techniques and tools of lean and more of the soft parts such as relationship, employees and organizational culture. The following chapter will introduce Lean and as mentioned, focusing on relationship, employees and organizational culture. The purpose of this is to gain a view of Lean with its principles to see how the benefits can be applied in Change Management.

2.2.1 A brief introduction and history of Lean Kanban, 5 S's, Visual control, Poke yoke and SMED, are all key tools and techniques within the Lean system. These methods and many other, are used today by increasing number of organizations worldwide. Their origin is from Japan, within Toyota in the 1940's. The Japanese wanted to create a system based upon a continuous flow which did not rely on long runs to be efficient, but on the recognition that only a small part of the total time and effort to process a product added value to the end costumer.

Compared to the western world where the philosophy of mass production, initiated by Henry Ford, was followed, these were each other's opposites (Melton, 2005, p. 662).

According to Liker (2004, p. 7), lean is the end result of applying the Toyota Production System (TPS) to all areas of your system. The founder of the TPS, Taiichi

Ohno describes it more in detail:

All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by removing the non-value-added waste. (Liker, 2004, p. 7) The TPS was developed after the World War II. At this time Ford and GM used mass production and big equipment to produce as many part as possible as cheaply as possible. Toyota's market was not as big as America's after the war, which forced CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 22 them to be flexible with a variety of vehicles on the same assembly line in order to satisfy its customers. And this was how it all started (Liker, 2004, p. 8).

2.2.2 Becoming Lean It is no secret that Toyota has been and still are very successful both in good and in bad times. This trend is still in place. Toyota forecast an increase of 20 percent in global sales to a record of 8.48 million vehicles worldwide, in 2012. This mean that Toyota would regain the top ranking from General Motors. The reason they lost sales was because of the natural disasters in Thailand (flooding) and in Japan (quake and tsunami). Measuring by stock values, Toyota is much higher than its rivals, at $ 111 billion, which is more than Volkswagen and General Motors combined (Kim, 2011).





Such information and other evidence shows the progress and success of Toyota. With this knowing you might ask the question why other companies (not only automotive manufacturers) have not learned and imitated the TPS? Information about Toyota's production system has been available for over 30 years, but still no other company has achieved to duplicate same results. What is the secret? According to Liker and Meier (2007, p. xix), the answer lies in great people. People with knowledge and capability in an organization which supports them to create the need for such talents. This is mainly what distinguishes companies from each other. Generally, organizations have access to the same technology, raw materials, machinery and even the pool of potential employees. This is particularly where the success lies in, but the full benefit is from the people at Toyota who cultivates their success (Liker and Meier, 2007, p.

xix).

Many managers and organizations believe that lean is a collection of different tools and methods which if implemented will contribute with many concrete benefits in their work. It is easily understandable that many have this view since it many times come from an often simplified and beautified version of lean. A version which only highlights the benefits as they would become reality just by implementing some tools and techniques. Examples of these descriptions can look like;

"Lean involves implementing a set of shop floor tools and techniques aimed at reducing waste within the plant and along the supply chain." (Scherrer-Rathje et al.

2009).

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 And "The benefits of being lean are:"  "decreased lead times for customers"  "reduced inventories for manufacturers"  "improved knowledge management" (Melton, 2005, p. 663).

There are examples that these misunderstandings result in failing attempts from companies to implement lean. One example is that executive managers who hear about lean, but rarely understand the philosophy and process of it, only have acknowledged the results. This leads to a delegated assignment down, to a less enthusiastic manager, to investigate it, which eventually results in a failed attempt.

Together with many other reasons linked with poor understanding and support are common reasons to why lean-attempts fail (Kilpatrick et al. 2006).

As mentioned earlier in this chapter, the purpose for this thesis was to investigate how the benefits of Lean can be applied in Change Management. Tools and techniques will not be the emphasized, instead areas such as leadership, employees and organizational culture will be focused. In order to explain the importance of the factors which will be investigated in this thesis, the TPS view of culture can be described as an iceberg. The top of the iceberg represents what is more visible and what you see when you visit an organization for the first time. Below the surface is the Toyota Way culture that is the foundation of lean. This iceberg can be found in The Toyota Way (Liker, 2004, 298).

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 24 Figure 2.3 Iceberg model of TPS However, it is important to remember that in order to go all the way through and transform an organization into lean, it is essential to include all aspects of lean in the entire organization. Which also means implementing tools and techniques of lean. As Teresko (2006, p. 3) formulates it: "Unless TPS is everywhere in an organization, it is nowhere." In this situation this is not necessary, since the purpose is not to become lean, but to gain some of the benefits from it to improve the Change Management process.

2.2.3 Bullet points and aspects To become lean and make cultural changes, this requires an understanding and commitment of the system to sustain and constantly improve it. Something which is, according to Liker (2004, p. 291), the most difficult for Western companies. The organization must learn how to develop a system and sticking with it and improve it.

To do so, the organization needs a long-term thinking and substantial leadership.

Toyota's model was intentionally to create a philosophy, built from the ground. It may take decades to transform the organization's culture, like this. (Liker, 2004, p. 290).

Liker (2004, p. 290) states some bullets about changing a culture and what is known about it;

1) "Start from the top - this may require an executive leadership shakeup."

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 2) "Involve from the bottom up."

3) "Use middle managers as change agents."

4) "It takes time to develop people who really understand and live the philosophy."

5) "On scale of difficulty, it is "extremely" difficult."

According to Sun (2008, p. 24) lean thinking has a great influence on people's mindsets, including the following aspects.

1) Lean thinking challenges habits. Sun means that employees will, with lean thinking, adapt and make small but continuous improvements of business settings.

This is encouraged and motivated by receptiveness to change.

2) It is time to recognize the power of lean thinking. Seen from the Japanese manufacturers, lean focuses on the whole process which leads to greater impact in the market pace. Compared to the American manufacturing where the people focus too much on the physical aspects of manufacturing.

3) People on the shop floor are the lean experts. The abilities of the employees at the shop floor is used to implement improvements. The success of lean implementation is about those who spend the most time on the shop floor.

4) Lean thinking requires dedication. Lean thinking is about seeing the value of longterm tools with openness around goals, expectations and outcomes. We must work hard before we can learn how to work smart.

Similarities from Liker's bullet points and Sun's aspects are for instance that the lean philosophy is about involving the shop floor workers and use their expertise to make improvements. These are the one who spend most time at the shop floor and knows how things work. Another thing is that you have to let the transformation take the time it requires. It is not possible to rush through a transformation and skip some steps, it may take longer time. No one understands the principles and the philosophy directly. It requires long-term goals and patience.

CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2012:35 26 As discussed earlier, the essence of the people are very essential in lean philosophy.

Something that shows the importance of it can be seen in the book The Toyota Way where six of fourteen principles about the philosophy are related to people. These six

are:

Principle 1. Base management decisions on a long-term philosophy, even at the expense of short-term financial goals. This principle is one of the most important long-term investment Toyota makes is on its people.

Principle 6. Standardized processes primary for the use of continuous improvements.

Standardized work and job instruction training go hand in hand. This will facilitate the work of learning how to see waste and make improvements.

Principle 9. Leaders within the organization must know and understand how to work and live the philosophy and tech it to others. These leaders must, in order to teach to others, have the skill of teaching as a leader and know the work to teach and support others.

Principle 10. The People and teams must learn how to follow the philosophy of the organization. Teams depend on well-trained people and part of individual development is learning to work in teams.

Principle 11. Help your supplier to improve by challenging them, this way you show them respect. The suppliers need the same qualities as you and to be developed in similar ways.

Principle 14. Relentless reflection and continuous improvement helps your organization to become a learning organization. Becoming a learning organization is at the top of the hierarchy of the Toyota Way pyramid because it is viewed as the highest level of organizational effectiveness.

Toyota has developed a culture where teaching is highly valued and considered as the central part of any manager's job. This culture is viewed as the key to long-term success, if this teaching environment does not exist, the group's performance will surely suffer (Liker and Meirer, 2007, p. 7).



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