overcoming barriers to successful implementation case study pat kennelly general manager, customer...
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Overcoming barriers to successful implementation
Case Study
Pat Kennelly
General Manager, Customer Service
Dimpco
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“Change”
The process by which the future invades our lives
Toffler
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Change in context• The last 50,000 years = 800 lifetimes
– 650 of those lifetimes spent in caves– Writing for the last 70– Printing for the last 6– Electricity for the last 2– Computers for the last ½
“The world today is as different from the world in which I was born as that world was from Ceaser’s”
Boulding
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First Snag• Lean and change are synonymous…..
• In order to understand implementation you first need to understand 3 things:– Why– What – How
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Today’s agenda• Context of Lean change initiatives
– Why– (What) – How
• Barriers / Issues• Methods
• Keenan– Background– Early days– Recent developments– The future
Theory
Practice
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Why Lean – part oneMNC’s
• HQ dictat• Competition within group• Customer requirements
SME (typical reasons)
• Improve efficiency• Eliminate Waste
2nd Snag: Pitch it like this and your lean initiative will be dead before it leaves the ground.
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Change FailuresHBS Study on change programs
– >30% had little effect on bottom line– 40% of IT projects abandoned– <30% of BPR are successful
• Iceberg model1 is a useful way of thinking
about the change process
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In other words – we’re talking about
a journey….Overt
TechnologyStrategySystemsStructure
1: Source: IMI Handbook of Management Pg 330
UnconsciousPower Trust
History of changeNorms / Culture
CovertManagement style
Team-workWork Practices
Participation
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The continuum of Resistance to Change2
Acceptance
Indifference
Passive Resistance
Active resistance
EnthusiasticCo-operationCo-op under pressure from mgtAcceptancePassive resignationIndifferenceApathyDoing only what is orderedNon learningProtestsWorking to ruleDoing as little as possibleSlowing downPersonal withdrawalCommitting errorsSpoilageDeliberate sabotage
2: AS Judson, Changing Behaviour in Organizations: Minimizing Resistance to Change 1991
p48
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10 Leading reasons for resistance 3
• Individual predisposition towards change• Fear of unknown• Climate of mistrust• Fear of failure• Loss of Status• Peer pressure• Disrupt cultural traditions or group relationships• Personality conflicts• Lack of tact / poor timing• Non re-inforcing reward systems
Is the resistance Rational or Emotional / Specific or GeneralEmotional implies “perception” – is personal, hard to understand and cannot be overcome with rational solutions
3: Kreitner & Kinicki. Organisational Behaviour. p671
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Methods to reduce resistance• Books written on the subject• Numerous “techniques”
– Lewin (Unfreeze / Change / Freeze)– Lewin (Force field analysis)– Kotter (8 Steps)– Morgan (15%)
• 2 Bottom lines….– What are the organisational drivers– Organisation needs to be ready
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Organisational DriversMost successful change initiatives are
founded on:
• Crisis• A drive for common progress
(something in it for everyone)
It is the second one that builds the virtuous circle of CI change
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Readiness…..Source : Ray McEvoy…..
D x V x C > RDissatisfaction with
the Status Quo
Vision of what some “future state” might be
Clarity of the first few steps
Resistance to change
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Richard Keenan & Co. Ltd
Founded: 1979 Borris Co Carlow
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Richard Keenan & Co. Ltd
Core Purpose
To make a real difference for farmers
Vision
To become the unique world force in innovative machine based system solutions for farmers
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Richard Keenan & Co. Ltd Today…
• Corporate headquarters and global manufacturing base is in Borris, Co. Carlow
• > €40m T/O
• 85% Export
• 170 people in Ireland
• 70 people overseas – including Australia, US, Germany, France & UK
• 15,000 customers in 40 countries
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Largest manufacturer in Europe
2nd largest in the world
A 25 year journey
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Early Steps – Key Drivers
• BSE - 1996• The need for a clear Vision / Strategy• Market change• Management Focus• A need for Cost Reduction and Better Product• A drive towards more Value added for Customer• Live or Die !!
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The Keenan System
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Keenan Competitiveness• Market position based on machine
capability integrated with knowledge
• More than simply production efficiency
Initial focus was WCB – not just WCM
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Mechanism• Key Consultants –
– John Sprouster– Enterprise Ireland
• Waste reduction
• Management structure and processes
• Redefined the Keenan differentiation
• Relationship building
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Key Initial Concepts
• WCM– Teams– Process
control– Automation– Flow
• WCB– Sales process
– Costs
– Procurement
– Warranty
Quality
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Key production steps• New production line• Kan Ban System for material control• Teams for each main assembly area• People within each team responsible for
– Health & Safety– Kan Ban– Right First Time / ISO– Housekeeping– Consumables
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Key steps (cont’d)
• KPI’s (Key Performance Indicators)– Weekly Production Targets– Accident Reporting / Risk Assessment– Right First Time Reporting– Suggestion Scheme– Absenteeism
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Tangible results (early wins)
• Snapshot of an interim (1999) report– 19 separate
“metrics”• Benefits clear from
an early stage
Objective Target Result
Increase productivity 10% 11%
Reduce total cost of procurement
£75% of target achieved
Central overhead 10% 8.4%
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More recent developmentsBrought to focus by some key strategic drivers
Make in house:
Material Cost: €16.14
Outsource (E.Europe)
Total Cost: €19
including delivery….
• Competitiveness within Ireland
• Capacity constraints in the factory
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• Increase competitiveness– Outsource lower value added activity– Keep key competencies in house– Move towards “high value add” production– Improve layout– Increase Capital investment – Modify machine design to improve efficiency– Build further innovation capability
Production Strategy
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Capability Development
• 4 Engineers• 2 Draftsmen• 3 Technicians• (66% dept. degree qualified)
Keenan Engineering• Dedicated engineering building
– €0.5 million investment– Foundation for future growth
• 4 staff in Production and Engineering recently became lean green belts
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Example 1• Paddles
– New cell designed and built (group input)– Part specific tooling designed and made in house– New materials allowed design change with lower cost
& weight, but higher strength– Capital team built cell, tested process and trained
teams
• Time to manufacture reduced by >50%• Part cannot be bought in cheaper than can be
made in house
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Example 2• Chassis Cell
– Most of the product complexity is in the chassis area
– More than 1000 permutations of chassis, wheel, tyre…
– Historically built in 2 plants, with lots of material movement
– Not suitable for outsourcing
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Chassis Cell - results• New cell in a single location
• Part specific tooling designed and made in house (reversible jigs & draggers)
• Increased capacity
• Staff count reduced from 9 to 7 (-22%)
• No movement of material
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New cell during construction
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Common Themes• Change credibility built up during late 90’s
• Allowed more aggressive changes in the last couple of years
• In house skill with jigs and tooling
• Combined benefits– Easier working conditions– Better productivity– Redeployment of staff
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ResultsKeenan Production per Year
0200400600800
1000120014001600
1997 1998 1999 2000 2001 2002 2003 2004
Year
Un
its
Production
Hours per Machine
0
50
100
150
200
250
1997 1998 1999 2000 2001 2002 2003 2004
Year
Ho
urs
Adjusted Hours
Hours to manufacture reduced by 66% since 1997
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The Future
• Develop the Keenan Manufacturing System– Single assembly plant– Mixed model value stream– Double production capacity (30 min takt time)
• Drivers– Current facility is capacity constrained– Future EPA requirements needs state of art painting– Current 2 plant layout not optimum efficiency
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Single Assembly Plant Layout –
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Summary• Keenan continue to thrive and prosper in a
global business – based in an economy that has been written off from a manufacturing perspective
• That they do so, is not just testimony to the product offering, but is a measure of, and just reward for the skill and innovation necessary to keep the product competitive
• It can be done….
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