Overcoming barriers to successful implementation

Case Study

Pat KennellyGeneral Manager, Customer Service

Dimpco

“Change”

The process by which the future invades our lives

Toffler

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

First Snag• Lean and change are synonymous…..• In order to understand implementation you

first need to understand 3 things:– Why– What – How

Today’s agenda• Context of Lean change initiatives

– Why– (What) – How

• Barriers / Issues• Methods

• Keenan– Background– Early days– Recent developments– The future

TheoryPractice

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.

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

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

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

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

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

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

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

Richard Keenan & Co. Ltd

Founded: 1979 Borris Co Carlow

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

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

Largest manufacturer in Europe

2nd largest in the world

A 25 year journey

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 !!

The Keenan System

Keenan Competitiveness• Market position based on machine

capability integrated with knowledge

• More than simply production efficiency

Initial focus was WCB – not just WCM

Mechanism• Key Consultants –

– John Sprouster– Enterprise Ireland

• Waste reduction• Management structure and processes• Redefined the Keenan differentiation• Relationship building

Key Initial Concepts• WCM

– Teams– Process

control– Automation– Flow

• WCB– Sales process– Costs– Procurement– Warranty

Quality

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

Key steps (cont’d)

• KPI’s (Key Performance Indicators)– Weekly Production Targets– Accident Reporting / Risk Assessment– Right First Time Reporting– Suggestion Scheme– Absenteeism

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%

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

• 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

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

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

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

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

New cell during construction

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

ResultsKeenan Production per Year

0200400600800

1000120014001600

1997 1998 1999 2000 2001 2002 2003 2004

Year

Uni

ts

Production

Hours per Machine

0

50

100

150

200

250

1997 1998 1999 2000 2001 2002 2003 2004

Year

Hou

rs

Adjusted Hours

Hours to manufacture reduced by 66% since 1997

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

Single Assembly Plant Layout –

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….

Better Farming - Better Food