Change management in the supply chain

By Kate Lee | 09/15/2015 | 4:11 AM

Change management is the process of taking an individual or a group of people from a current state to a more desired state. Its recent prevalence, and often necessity, is heavily due to new technology and globalization. As humans we experience change constantly, on micro and macro levels. Today alone, around 350,000 babies will be born and 150,000 people will die. Gas prices might have dropped recently or your favorite flavor of potato chips might be discontinued. Stock prices rise and fall by the second. Nearly everything changes, yet the word change is often scary or stressful, especially when applied to the workplace.

Alan L. Milliken wrote in his article The Importance of Change Management in the Supply Chain that the key components of a successful business are process, technology, and people. He terms this the “Triad of Operational Excellence.” How is this “triad” involved in change management?

Process:

Sometimes process is the reason for implementing change. Are the processes in the supply chain preventing timely order fulfillment? Can the current process ensure proper, safe, and secure delivery? Are current processes compliant with regulations, nimble enough to weather unexpected change, efficient and modern enough to match innovative competitors? These are all good points to assess. When implementing change is it critical to understand a company’s current capabilities, what needs to be changed, and whether the current systems and finances can support change.

Technology:

Often change management can be spurred by a need for technological growth. If the end-to-end supply chain has antiquated practices, and one member of the chain is transitioning to modern technology, the rest of the players involved may feel the need to change despite being resistant to new technologies or feeling overwhelming by the cost and steps required to transition.

Some companies with decades or a century of business behind them, may be nervous about shifting to a social media driven, on-demand paradigm. There are many benefits to modernizing, and seeing the long-term view of how technology and media can assist business is critical. One company that has made changes to the way they present their business is the packaging supply company, Laddawn. Overhauling their website and providing customers with new purchasing capabilities has put them at the forefront amongst competitors. According to CEO, Ladd Lavallee, “It's difficult for manufacturers to invest in service, or service technologies, because production can easily consume our time and money. But we need to make our customers' lives easier if we want to keep winning their business in a shrinking world.”

People:

If leaders aren't on board with a change management process their frustration or hesitation can seep into others' mindsets. Studies have shown that emotional contagion occurs in society, and in business. People who cultivate a positive mind-set perform better in the face of challenge. When Bert's Bee's was rapidly growing on the global market, then-CEO, John Replogle, worked positive emotional contagion into his workplace, realizing, "Leaders, by virtue of their authority, exert a disproportionate impact on the mood of those they supervise." He saw this change as an opportunity for people to grow as the company was growing.

In a sweeping meta-analysis of 225 academic studies, Sonja Lyubomirsky, Laura King, and Ed Diener found that happy employees have, on average, 31% higher productivity; their sales are 37% higher; their creativity is three times higher. According to executive coach and business consultant, Sara Regan, of Common Focus Consulting, thoughtful leadership during change is critical to success and employee satisfaction, “The biggest mistake I see leaders make is that they are too late in bringing others into the process. It usually creates more work in the end since it heightens anxiety and resistance then making the leader push harder instead of listen. The way in which leaders approach change impacts the end results but also the ongoing trust and engagement of the team.”

Certainly there are times when change is not necessary in a company, but when it is, aligning the process, technology, and people are key to reaching a new, more successful and desired state.