Inventory Layout Change Project

The project is about changing the inventory layout of manufacturing in IBM facilities. Therefore, appropriate change management model was used. The positive action model was chosen because it focuses on what is right rather than the existing problems.  Appreciative inquiry is a crucial aspect of the positive model because it helps identity how positive and negative forces interact to influence change in an organization. The project will commence on July 13th 208 end of 28th September 2018.  The project deliverables are innovative solutions to inventory layout issues, better communication and boosting operational capacity for the project. Force field analysis and SWOT determined the current company position and priority areas for change. Focus group interviews provided  feedback to inform impact of change on the project and recommendations.

Table of Contents

1.0        Executive Summary. 2

2.0 Introduction. 3

2.1 Brief Company Overview.. 4

3.0 Project Scope. 4

3.1 Model of planned change and rationale. 4

3.2Timeline for project activities. 6

3.3 Project deliverables. 7

4.0 Analysis of Results. 8

4.1 Summary of SWOT analysis. 8

4.2 Summary of Force Field Analysis. 10

4.3 Results for the impact of change on this project 12

4.3.1 Impact on efficiency. 12

4.3.2 Impact on peak seasons. 12

4.3.3 Facilities impact 13

5.0 Conclusions. 13

6.0 Recommendations. 13

7.0 References. 15

8.0 Appendices. 16

8.1 Appendix A. 16

8.2 Appendix B: Copy of analysis. 16

8.3 Appendix C. 17

2.0 Introduction

Organizational Development (OD) professionals are increasingly becoming a crucial part of helping transform business and help steer them towards profitability. Therefore, OD consultants are in high demand for their special skills in identifying and initiating aspects of change within an organization. Even in businesses that have non-OD projects, they find professional consultants applying those principles to be integral to their success (Harrower, 2010). OD consultants are critical in building relationships with the client by helping them understand their own problems to initiate change in the company (Harrower, 2010). By helping the client diagnose the challenges existing in the business, OD professionals assist in building organizations that embrace and sustain change (Worley & Lawler, 2006). In such cases, the top management is advised to redefine the working relationship between the company and employees to implement change that is transformative (Worley & Lawler, 2006). One of the main tasks an OD consultant must do after finishing his work is to prepare a client report that offers a glimpse of the project scope, analysis of issues and recommendations for change.

The purpose of this report is to provide a comprehensive review of project change model, activities, deliverables, analysis of findings and make recommendations to the top management of IBM for action.

2.1 Brief Company Overview

International Business Machines (IBM) is a computer manufacturer and an IT consulting firm based in the US. The company has operates worldwide. Its main products are computer hardware, software and assorted services (The Guardian, 2010). IBM has five operating segments that include technology services and cloud platforms, global financing, global business services, cognitive solutions, and systems (The Guardian, 2010). As of 2009, the firm had over 390, 000 employees and reported revenues totaling to $95.75 billion (The Gurdian, 2010).

3.0 Project Scope

3.1 Model of planned change and rationale

The model of planned change used for conducting this research is the Positive Model. Change management can be a difficult endeavor particularly in organizations that are largely conservative in their management structure and operational activities. Developing organizations that are built for change requires the use of appropriate models (Worley & Lawler, 2006). The change model will enable organizations to manage their talents; improve working relationships and environment for better performance (Worley & Lawler, 2006; Cummings & Worley, 2009). IBM is committed to change resulting from OD interventions. According to Rothwell, Sullivan, & McLean (1995), for an OD consultant’s interventions to be successful, the top management should provide resources to execute change, advocate for change, demonstrate a clear need for change in the organization and employees should be willing to active participants.

Figure 1: Positive Model of Change

Source: https://www.slideshare.net/arleneabonales/lecture3-planned-change

Unlike other models that models that are deficit based, positive model of change focussed on what the organization is doing right to transform itself (Cummings & Worley, 2015). According to Bright (2009), the model is based on positive dynamics that allow change to lead to extraordinary outcomes. Bright (2009, p.2), reveals that “Building extraordinary organizations is not a matter of focusing exclusively on the positive; it is a matter of understanding of how positive forces function in a dynamic relationship with negative ones.” It means that building positive organizations depends on understanding the impact of negative aspects such as conflict and poor emotions. .The model was chosen because of the many benefits that it has an organization that requires change. The rationale is that the major issue lies in working relationships among employees that have rendered the current inventory layout both ineffective and inefficient in the current business environment for IBM.

The positive model uses Appreciative Inquiry to lead and implement change in the organization (Bright, 2009; Kelly, 2010). Appreciative inquiry enables an OD consultant to identify organizational dynamics that make change possible. AI  focusses on aspects that are working in the organization instead of problems that are existence to determine avenues that allow an organization to generate potential (Kelly, 2010; Bright, 2009).According to Cummings & Worley (2015), the best practices in implementing change in a business are the positive values integrated into changing organizations. The following are the main steps of executing change using a positive model;

Initiate the inquiry: the need for change was determined by the OD consultant after a series of inquiries regarding inefficiencies in inventory layout at IBM’s manufacturing facilities.

Inquire into best practices: one of the best practices that emerged was to enhance human and social capital that will improve relationships among inventory staff to improve efficiency.

Discover themes: It is crucial the main themes of inquiry using appropriate techniques are established.

Envision a preferred future: The inventory layout will be in such a way that processes are improved or slowed down depending on customer demand to reduce costs.

Design and deliver ways to create the future: a new inventory layout will be designed that will result in process improvement at IBM manufacturing.

3.2Timeline for project activities

The activities will be significant in accomplishing better outcomes for the project. They include collecting and analysis of data, assigning of responsibilities/tasks, establishing and conducting standardized training for the staff, designing and testing a new inventory layout, anchoring and maintaining change by making the new inventory operational.  Collecting data will be done through the use of focus group interviews and feedback used to inform recommendations for improvement. People to implement change will need to be identified and their responsibilities made clear. Then employees will undergo a standardized training for best inventory layout practices. The feedback and information collected during interviews will inform decisions on designing a new inventory layout. The last activity will be to anchor change in the organization by operationalizing the new inventory layout. The project will begin on 13th July 2018 as stated in the consent form. It will end officially on the 28th of September 2018.

Figure 2: Project Timeline

Project Activity

Date

Collecting and analysis  of data

15th July 2018-22nd July 2018

Assigning project tasks

24th July 2018

Establishing and conducting standardized training for staff

26th July -17th August 2018

Designing and testing new inventory layout

From 20th August-20th

September 2018

Making the new inventory operational

From 1st October

Source: (The author, 2018)

3.3 Project deliverables

Project deliverables represent the outcomes of a project. Each deliverable will make a step closer to anchoring change within IBM in regards to inventory in manufacturing. The following are the major project deliverables;

Better communication within the organization in regards to inventory practices: communication can be a challenge when leading and implementing change in an organization. The project will be able to identify communication practices between managers and employees in manufacturing to embrace and anchor change within the company.

An innovative solution to inventory layout problems: IBM is a company that prides itself on innovation to create unique products and services that satisfy customer demand and improve the user experience. Therefore, an open innovation model will be applied by the OD practitioner to enable the firm to develop and design a new inventory layout that is innovative, less costly and more efficient to manage processes.

Boosting operational capacity for the organization to remain during peak and off-peak seasons: Poor inventory layout can result in higher costs which can affect other critical business operations, rendering the organization inactive.

4.0 Analysis of Results

4.1 Summary of SWOT analysis

SWOT analysis is a strategic development tool that consultants find useful when determining issues for OD.  SWOT analysis can offer an OD consultant a deep focus for priority areas that need management attention (Beagrie, 2004). Since the majority of OD professionals are outsiders, SWOT analysis gives them a chance to establish the firm’s current position and have a better understanding of the business. Furthermore, the analysis is crucial to assess how the organization is responding to change (Beagrie, 2004). Determining company weaknesses is usually done from an external perspective particularly customers and competitors on how they perceive the organization. However, some businesses have managed to hide their weaknesses from potential competitors who might exploit it for their own advantage.

Organizations need to understand what their strengths and weaknesses are. These are usually derived internally within the organization. Opportunities and Threats to the company are derived from external environmental factors affecting the business. For the inventory layout project, IBM has dedicated and well-motivated employees that have high productivity. There is a significant strength, particularly from an OD perspective. Additionally, there is strong support from company leadership, and extensive quality processes are in place. However, a large number of projects happening in the manufacturing section makes it a challenge to fully implement change in regards to inventory layout. Furthermore, the lack of standardized training for the staff means that the competencies among employees will be different leading to the skills gap. Moreover, time constraints present another weakness that needs to be considered before the project commences. Some of the opportunities include decreased costs; reduce errors and more standardized training for employees in manufacturing. However, all this are threatened by policy restrictions in the industry, time constraints and general resistance to change within the manufacturing sector.

Figure 3: Summary of inventory layout SWOT

Strengths

Dedicated employees

Motivated staff

Existing employee experience

Support from manufacturing

Support from leadership

Quality processes in place

Many lines of products to assist staff

Large organization with a strong framework

Weaknesses

Insufficient time to complete training

Insufficient numbers of participants to cover all areas

Non-standardized training

A large number of similar projects happening within manufacturing

Lack of layout knowledge

Opportunities

Reduction in cost due to better inventory prediction

Ability to improve the layout

Potential to decrease errors

More standardized training

Threats

Policy restrictions

Resistance to change

Lack of time

Source: (The author, 2018)

4.2 Summary of Force Field Analysis

Change is never easy for any organization. The first reaction to people when change is initiated is resistance. In most cases, organizational politics facilitates resistance and usually works against the driving forces during both planning and implementation (Kamalesh, and Thibodeaux, 1990). Therefore, an OD professional must recognize and identify stakeholders who have the power and influence to drive change or serve as a hindrance to it. Most importantly, the OD consultant must reconcile the opposing forces to develop change interventions that will encounter little resistance (Pallegrinelli., 2002). All these are possible by conducting a force field analysis for the project that will lead to change in an organization.

Forcefield analysis is also a critical tool for assessing sources of strengths in the organization to determine the driving forces of change (Cummings & Worley, 2015). It is through force field analysis that an OD consultant can make informed decisions on the areas that require change (Cummings & Worley, 2015).  However, the OD professional does not conduct the analysis in isolation but rather works with groups of people within the organization to identify force driving and opposing change on a particular issue of interest to the top management. The forces are listed in a table or a flip chart. The driving forces are listed on the left side while the resistance is on the right (Cummings & Worley, 2015). The forces are then scored on a numerical scale on the order of their importance to the organizational development issue.

For the inventory layout project, the major driving forces for change include employee participation, staff enthusiasm, and improved efficiency and improve quality. Employee enthusiasm and improved efficiency are the most important forces driving change in IBM inventory in manufacturing. It was agreed that the organization exercises greater control and influence over those two forces to realize a more efficient inventory layout. For example, by focussing on increasing staff enthusiasm in the workplace, there will be better organization in the inventory which will result in a drastic reduction in costs. Additionally, employees who have a high sense of enthusiasm will also have a higher rate of participation in inventory practices to experience improve change.

For opposing forces, costs, time constraints, inadequate resources and the fact that employees do not want change are the major barriers. Of those identified, time constraints and employees not anting change emerged as the most profound forces of resistance.  Inadequate resources were of less importance but some stakeholders were adamant about the cost of implementing change in the company. Majority of stakeholders cited time as a barrier to implementing change. The proposed timeline was too short for a myriad of project activities to be undertaken. However, since the change process is gradual the timeline will be increased to allow for a longer schedule to complete project activities and realize deliverables. Employees resisting change is a major issue because they are the ones in charge of implementation. However, a series of reconciliation and mediations through proper communication solved the problem (Pellegrinelli, 2002).

Figure 4: Force field analysis for inventory layout project

Forces for Change Forces for Maintaining Status Quo

Employee Participation                   2

Improve Quality a hindrance to Controls 3

Employee Enthusiasm 4

Improved Efficiea ncy 3 the

Total 12

Cost 2

Time Restrictions 3

Employees do not want change      3

Having enough resources 1

Total 9

Source: (The Author, 2018)

4.3 Results for the impact of change on this project

4.3.1 Impact on efficiency

In determining the impact of the change on the project, data generated from consent forms and approved IRB protocol will be used. IBM prides itself on executing the best inventory management practices. However, interviews with several participants indicate that the current inventory layout is far from efficient. According to one participant, the layout has a poor design that obstructs workflow, and movement of people and machines within the manufacturing facility. According to Slack et al. (2013), poor layout design will hamper render even the best inventory management practices obsolete and ineffective. Being a computer manufacturer, IBM deals with physical inventories in terms of assembly parts and packaging materials. However, due to the current layout, it’s hard for the some of the parts such as switchboards to be located in a manufacturing facility, causing production delays. The delays result in high customer queues for the delivery of their orders. This lead to high operational costs during manufacturing as the computer engineers cannot get their supplies on time. Analysis of data also showed that there is a mismatch between what is listed on the company website and the actual computers in stock. This means that customers can order a product which is currently out of stock but listed as available on the website. The project will try to solve this problem by reconciling website with actual stock in the warehouse. There is also use outdated software tools to manage inventory

4.3.2 Impact on peak seasons

The change will make the project more prepared to deal with peak seasons. Peak seasons are when demand for products is high. In the focus questions, almost half of the participants said that they are not prepared for peak seasons (See appendix A).  However, the high enthusiasm by employees as a result of change will result in better preparedness to improve the inventory layout and better handling of peak seasons. Many participants explained that they can better prepare for peak seasons by holding on to available inventory and more accurate forecasting demands to anticipate customer orders.  Holding on inventory can help in reducing costs, improve flexibility and sell more during peak seasons (Slack et al., 2013). Many interviewers rated the current forecasting model as “3” on a numerical scale but emphasized the need for more accuracy (See Appendix A)

4.3.3 Facilities impact

The change will also improve the management of the storage facility in IBM manufacturing plants. The current storage facilities have very little space making them inadequate. The low space makes it flexibility impossible when wanting to change or move stock from one area to another. Accessibility is also an issue in the storage facilities as equipment are placed all over making it hard for trucks and people to move. However, change in this project will result in making the storage facilities adequate for improving accessibility and maximizing space.

5.0 Conclusions

OD professionals are critical part of leading and implementing change in the organization. The inventory layout at IBM needs improvement because it is inefficient. Furthermore, employees are not prepared for the peak seasons, the forecasting model is inaccurate and the storage facilities are inadequate. The change process will transform the inventory management practices in IBM to be more effective, employees to be more prepared for peak seasons, storage facilities to be adequate to handle manufacturing operations and forecasting model to be more accurate in projecting demand.

6.0 Recommendations

The following are the recommendations to the IBM management on the improving inventory layout;

1. Arrange stock in vertical racks and use of free-standing equipment to maximize on space in storage facilities

2. Assigning staff to perform their duties close to materials to improve workflow and allow easier management of traffic within the warehouse.

3. For improving peak season preparedness, develop a new forecasting model and increasing flexibility of process through the reduction of changeover times.

4. Invest in big data analytics and up to date inventory management software to improve efficiency.

7.0 References

Beagre, Scott(2004). How to conduct a SWOT analysis. Personnel Today,pp.21

Bright, D.S.(2009).Appreciative inquiry and positive organizational scholarship. OD Practitioner, 41(3): 1-7

Cummings T.G. & Worley, C.G. (2015).  Organization Development & Change

(10th ed.). Mason; OH: Cengage Learning  ISBN-10: 1133190456 ISBN-13: 9781133190455 (E-Book)

Cummings, Thomas G., &  Worley, C.G.(2009). Organization Development & Change. Mason, OH: South-Western Cengage Learning.

Harrower, N.L.(2010). Applying OD principles to non-OD projects. OD Practitioner, 42(1): 26-32

Kamalesh, K., & Thibodeaux, M.S.(1990). Organizational politics and planned change. Group & Organizational Studies, 15(4): 357-365.

Kelly, T. (2010) A Positive Approach to Change: The Role of Appreciative Inquiry in Library and Information Organisations, Australian Academic & Research Libraries, 41:3, 163-177, DOI: 10.1080/00048623.2010.107214

Pellegrinelli, S.(2002).Managing interplay of consulting tensions: The consultant-client relationship as mediation and reconciliation. The Journal of Management Development, 21(5): 343-365.

Rothwell, W.J., Sullivan, R., & McLean, G.N.(1995). Practicing organizational development: A guide to OD consultants.

Slack, N, Jones, A., &  Johnston, R.(2013). Operations Management, 7th

Edition. Pearson Education.

The Guardian (10th Novemeber 2010). Company profile for IBM. Retrieved from https://www.theguardian.com/sustainable-business/profile-ibm

Worley, C.G., & Lawler III, E.E.(2006). Designing organizations that are built to change. MIT Sloan Management Review

8.0 Appendices

8.1 Appendix A

Focus Group Questions

1) How satisfied are you with the inventory layout? Can you rank this from 1-4?

2) Do you feel like IBM has an efficient inventory layout? Can you rank this from 1-4?

In what ways is the current layout efficient?

In what ways is the current layout inefficient?

What could be improved?

3) Are you prepared for peak seasons? Can you rank this from 1-4?

In what ways could you be better prepared?

4) On a scale of 1-4 can you please rate IBM’s forecasting model?

In what ways are the current storage facilities adequate?

In what ways are the current storage facilities inadequate?

Where is room for improvement?

8.2 Appendix B: Copy of analysis

Participant Number 3

1) How satisfied are you with the inventory layout? Can you rank this from 1-4?

2-Not satisfied

2) Do you feel like IBM has an efficient inventory layout? Can you rank this from 1-4?

3-Good

In what ways is the current layout efficient?

The current layout has helped reduce costs and lead times.

In what ways is the current layout inefficient?

There is disorganization which has caused some delays in procurement of computer materials

What could be improved?

The design of the layout could be improved to boost operational capacity

3) Are you prepared for peak seasons? Can you rank this from 1-4?

2-Not prepared

In what ways could you be better prepared?

By using the latest inventory management software and more training for employees.

4) On a scale of 1-4 can you please rate IBM’s forecasting model?

3-Prepared

In what ways are the current storage facilities adequate?

They are adequate for managing inventory in off-peak seasons.

In what ways are the current storage facilities inadequate?\

There is less space utilization and accessibility is a problem

Where is room for improvement?

There is room for improvement in the way space is utilized to boost capacity.

8.3 Appendix C

1. SWOT analysis

Strengths

Dedicated employees

Motivated staff

Existing employee experience

Support from manufacturing

Support from leadership

Quality processes in place

Many lines of products to assist staff

Large organization with a strong framework

Weaknesses

Insufficient time to complete training

Insufficient numbers of participants to cover all areas

Non-standardized training

Large number of similar projects happening within manufacturing

Lack of layout knowledge

Opportunities

Reduction in cost due to better inventory prediction

Ability to improve layout

Potential to decrease errors

More standardized training

Threats

Policy restrictions

Resistance to change

Lack of time

2. Force Field analysis

Forces for Change Forces for Maintaining Status Quo

Employee Participation                   2

Improve Quality Controls 3

Employee Enthusiasm 4

Improved Efficiency 3

Total 12

Cost 2

Time Restrictions 3

Employees do not want change      3

Having enough resources 1

Total 9