Change Management

Introduction

The purpose of the following report is to explain the basic principles behind Change Management; it will focus on the types of change a company can expect to experience and the experiences both employer and employee may undergo when embarking on a program of change, these include resistance to change, change barriers and how to overcome them.

In a 2003 Harvard Business press release, Mr M Beer stated the following:

"Change is part of organisational life and essential for progress. Those who know how to anticipate it, catalyse it, and manage it will find their careers, and their companies, more satisfying and successful" (Beer M 2003)

For Corus to survive the increasing competitiveness within the steel sector, it is imperative that they accept the need to change in line with new technologies, new competitors, new markets and demands for greater performance by implementing programs of change, each designed to improve performance.

This report will also attempt to look into and explain the many changes experienced within the steel sector over the last two decades, particularly the changes within Teesside Beam Mill (TBM)

Change within TBM

In the past 20 years TBM as part of Corus, formally British Steel has seen many changes. Some of these changes have been quite extreme, for example, the merger of British steel and Hoogovens, to form Corus in 1999, also the recent acquisition of Corus by Tata Steel. Both these changes were the result of the fifth element of the five waves of merger and acquisition activity, as adapted from Gaughan in 2002 see fig 1 which demonstrates the way in which business has changed focus throughout the last century.

Fig 1

."In the last 3 years, growth through acquisition has been a critical part of the success of many companies operating in the new economy" (Mandl A. 2000)

There has of course been a number of other less profound though still challenging changes, some of these changes have been a direct result of attempted lean implementation. For example: Corus first began to embrace the principles of Lean Manufacturing and continuous improvement with the "Restoring Success Project" of 2003; this aimed to save Ð'Ј680 million by the end of 2006. "We looked at what would help our competitive drive in the future, and sought support of the LERC as a way of creating lean awareness," says Jack MacLachlan, managing director of Corus Continuous Improvement. In 2006 a CI team looked at the dispatch process within TBM, The problem areas highlighted were:

1. Safety:

There was a history of slinging related injuries e.g. trapped fingers and back strains etc. Another major hazard and the cause of two fatalities in 15 years was vehicle and personnel working together in close proximity,

2. Availability:

Two1950's vintage 15-ton cranes were difficult to maintain and had limited capability, this affected performance with regard to principles such as continuous flow, just in time and TPM.

3. Yield:

Product damage due to over handling with chains was cause for customer complaints and returns.

4. Manpower:

Traditionally the area was over reliant on manpower, repetitive low interest jobs made it hard to motivate the staff.

In June 2006 Ð'Ј1.500,000 was invested, providing a single 45-ton crane operation and utilising a pallet system as an alternative to the two old 15 ton cranes and slingers. When completed, the TBM dispatch teams were reduced to five per shift rather than the nine required under the old system thus eliminating waste and improving profitability. Only one lift was required to load a wagon instead of a possible five, this increased flow throughout the whole process and this led to better on time in full delivery times. Safety was improved due to the implementation of the hierarchy of control and the total removal of personnel from the hazards. Product quality was improved due to less handling and the need to no longer use chains for slinging, this led to better customer confidence and reduced waste, borne from reductions in return transport of defective materiel.

Types of Change

The following categories reflect the types of change both companies and their employees can expect to experience.

Ð'* Structural change.Ð'-

During structural change, management often aided by consultants, will attempt to reconfigure all or part of a company to achieve greater overall performance.

Mergers, acquisitions, consolidations, and divestiture of operating units are all examples of attempts at structural change.

Ð'* Cost cutting.

Cost cutting focuses on the elimination of nonessential activities. Usually cost cutting activities are the result of a business down turn, when the company looks to improve by focusing on activities otherwise ignored in boom times.

Ð'* Process change.

Process change typically aims to make processes faster, more effective, more reliable, and/or less costly, for example automating a labor intensive production line.

Ð'* Cultural change.Ð'-

Cultural change looks at the human side of an organization, such as a company's general approach to doing business or the relationship between its management and employees.

Changing from a command and control management system to an empowerment based system is an example of cultural change, as is any effort to change from an inwardly focused product push mentality system to an outward looking customer focused business.

According to teachings of Mr. Mat Draycott, change can be put into four categories, these being:

1: Imposition:

This is when an organisation is forced into change as a result of outside forces, for example: new or changes in legal requirements, customer requirements and technological advancement.

2: Adaptation:

When adapting to change it is imperative any organisation puts in place a structured method for responding to changes, such as economic fluctuations, threats from competitors and plant changes such as new policies and advancements in information technologies and software applications.