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A Methodology for Change Management in Manufacturing
E. Öztemela, b
, M.B. Ayhana
a
Department of Industrial Engineering, University of Marmara, Istanbul, 34740, TR
b
Also affiliated with: MAM/BTE, Tubitak, Gebze/Kocaeli, TR
Abstract
Although there have been some models to manage the changes in organizations, they hardly reflect the respective
change in manufacturing systems depending on specific properties including; Technological, Process Related,
Managerial, Customer Oriented, and Environmental changes. In this paper changes in manufacturing system are
investigated and a methodology is introduced in order to manage them.
Keywords: Change Management, Manufacturing, Technological Change, Process Related Change, Managerial
Change, Customer Oriented Change, Environmental Change, Change Process
1. Introduction
In the 21st
century, enterprises experience a rapid
transformation process from manufacturing society to
knowledge society. Companies, which desire to survive
in the competitive market during this transformation,
should follow the change as much successful as
possible. In order to achieve this, there is a need for a
systematical approach to manage the change for
sustaining on.
However, analyzing the systematical changes, and
modeling this transformation is difficult to pursue in
most organizations. Since the change concept occupies
in global dimensions and the management of this
change requires a model for evaluation of the
connections and relations of all change components.
ADKAR, which states the requirement of adoption
to change both by the entrepreneurial and the
employees, includes a 5-stage approach to manage the
change [1];
Awareness of the need to change
Desire to participate and support the change
Knowledge of how to change and what the
change looks like
Ability to implement the change on a day to
day basis
Reinforcement to keep the change in place
Although ADKAR is a promising model, the main
focus is on the personal perception and implementation
of the change, not for the manufacturing functions.
Other change management models stress on the new
approaches and techniques for the management
functions including technological developments.
However, it is difficult to realize the prevalence of any
model. Although the manufacturing functions are not
totally excluded in existing models, the main focus is
for the managerial aspect of the change in the existing
models. The reasons for requirement of a change
management model for manufacturing system are
deeply investigated in a recent study [2]. Based on this
fact, this study is devoted to establish a general
framework for the overall manufacturing change
model.
2. Change Elements in Manufacturing
Triggering factors that lead to change in
manufacturing systems are investigated and gathered in
5 main categories, namely; Technological Change,
Process Related Change, Managerial Change,
Customer Oriented Change, and Environmental
Change. Following section of the paper is devoted to
the explanation of each of these.

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2.1. Technological Change
Technological change is one of the most important
factors, which has a great effect on the change
management model for manufacturing systems. It is
important to integrate the technological developments
into manufacturing systems to the best utilization of
technological changes and developments. The bases of
the technological developments are the changes in
automation and information systems. In the new era,
technological developments lead into fast prototyping,
autonomous systems, artificial intelligence and
machinery domination in manufacturing systems.
Since the technology is an extensive concept and
difficult to observe at all in one step, it is better to
distinguish that into phases including; Technological
Forecasting, Product Innovation, Technological
Adaptation.
2.1.1. Technological Forecasting:
The main aim of Technological Forecasting is to
predict the future technological capabilities, attributes,
and parameters. It is most appropriately applied to
capabilities. In another definition; technological
forecasting means the prediction of characteristics or
use of technology [3]. In this regard, important aspects
of technology are; Throughput Time, Quantity/Day,
Rework Rate, and New Investment Revenue Rate.
Throughput Time is the period required for a
material, part, or subassembly to pass through the
manufacturing process. This aspect is not only
dependent on the technological developments but
technological developments for example a new
machine or tool usage will definitely decrease the flow
time of the product.
Quantity/Day is another important aspect which is
affected by the technological change. It is different
from Throughput Time. Since the throughput time
indicates the production speed of the system, whereas
quantity/day figures the production capacity of the
system. This capacity is not only dependent on the
employees’ working rate, but also the high
technological machinery usage or highly trained-
skilled workers. Hence, forecasting the capacity of the
system will be an indicator of forecasting the
technological change in the system.
Rework Rate is the indicator of quality, which is
an important aspect of the technology in
manufacturing. The changes in technologies should be
foresighted and the quality of the products should be
improved by those changes.
New Investment Revenue Rate is another example
of technological aspects of the manufacturing system.
To manage the technological changes, newinvestments
on machinery or other systems are inevitable. But, it is
desired to know how much revenue the newinvestment
will provide. In order to fulfill this information, a
forecasting study should be carried out.
A mathematical measurement model dealing with
technological forecasting is to be presented [4].
2.1.2. Product Innovation:
Creating innovative products is another indication
of following the technological change. Product
innovation comprises implementing technologically
new products or significant technological
improvements in products [5]. A methodology to
measure the innovativeness of the product, which is
presented in a recent conference [6], deals with 3
components as the following.
Innovation Index tries to calculate the
innovativeness degree of new or improved product by
comparing the profit and sales quantities of innovative
products with the existing ones.
Innovation Earning measures the earnings from
new technological developments excluding the R&D
investment costs. The multiplication of Innovation
Index with Innovation Earning provides a so called
Innovation Benefit. It comprises the novelty of the
innovation as well as the earnings. Details of this
model are presented in the respective paper [6].
2.1.3 Technological Adaptation:
Technological adaptation, which takes place to
penetrate the technological changes within the
manufacturing system, should also be studied for the
sake of technological change. Existing technology
acceptance models generally depend on human
sociology or the transfer of technologies [7]. By the
term of technological adaptation not only the human
effects but also tool and knowledge effects should be
taken into account.
Tool Effect is one of the most important factors for
the integration of new developed technologies to the
facilities. It is senseless for a company to be very
innovative unless it can adopt its machine and tools
into the emerging and developed technologies.
The role of Human Effect on Technology
Adaptation is more than expected and creates more
obstacles than supports. Generally, organizations invest

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a great deal of their resources to obtain the necessary
hardware and software technologies with insignificant
investment in the human aspect of technology. It takes
time for people to change and to adapt new
environments, and new procedures.
Knowledge Effect deals with accumulated
knowledge storage within the enterprise focusing on
the technological changes. Since, knowledge is
something that connects the people to new technology.
Details of measuring each of these “effects” can be
found in literature [8].
2.2. Process Related Change
Process innovation is as much important as the
technological product innovation. Since, even if new
technological products are developed, they would not
have great impact on the market unless the process
innovation follows. Hence the definition of
technological process innovation can be given as the
adoption of technologically to new or significantly
improved production methods. These methods may
involve changes in equipment, or production
organization, or a combination of these changes, and
may be derived from the use of new knowledge [5].
Current examples of process innovation can be
listed as the substitution of flexible manufacturing
system instead of mass production and Make to Order
strategy instead of Make to Stock strategy. Definitely,
there is not an obligation to use this process innovation
for all systems. However, it is important to assess the
value of change by examining the expected
performance of the process alternatives as well as the
evaluation and implementation of the selected process.
Identification of the right measures for a process is not
straightforward. The critical point is the notion of
process measurement and metrics.
Although in a recent study process improvement is
assessed by Task Activity, Bottleneck, Resource
Utilization, and Cycle Cost analyses, it is performed for
general organizational processes, and tries to assess the
performance of alternative processes before their
implementation [9]. This method can also be applied
for the assessment of the success of manufacturing
processes with some add-ons and improvements. Since
the performance of developed process techniques can
be compared with the previous techniques with respect
to Cycle Time, Bottleneck Time, Resource Utilization,
Resource Contention, and Cycle Cost of the
production.
Cycle Time is the total time to complete a
manufacturing process including process and delay
times. Since, it is one of the measures of process
efficiency, it is important to reduce the cycle time for
manufacturing processes. A decrease in total Cycle
time of a job will be an indicator of process
improvement, which triggers the process change
A Bottleneck occurs whenever the excess capacity
of a task is less than that of the preceding task. Excess
capacity is found by dividing the difference between
the Capacity and the Load by Capacity [9]. Capacity
for a task is the summation of actual working hours of
every worker for the related task. Load is the total time
required to produce the total amount of product
required. In a manufacturing environment, a
bottlenecked process increases work in process
inventory costs. Therefore, to determine the capability
of new process (the capability of process change) as
successful, total bottleneck time should be assessed.
Resource Utilization indicates the extent to which
resources are over or under utilized [9]. Therefore, an
increase in resource utilization will be an indicator for
the process improvement.
On the other hand, Resource Contention occurs if
the Actual Work Hour performed for a task by a
worker is less than the Required Hour for that task by
that worker. Hence both aspects, Resource Utilization
and Contention, compensate one another to measure
the success of developed process.
Cycle Cost, which is the total amount of dollar
spent for completing tasks in a process, is another
performance indicator of a process. It is the sum of
overhead and labor costs of employees dealing with the
related process.
Weighted averages of these 5 factors, which
measure the performance of the new process, give the
overall change score of the process. If this score is
compared with the existing process score, capability of
the new process is distinguished. Most of the model
calculations are listed in literature [9], and rest of the
Process Change Model is the subject of the ongoing
study.
2.3 Managerial Change
Management is the attainment of organization goals
in an effective and efficient manner through planning,
organizing, leading, and controlling organizational
resources [10]. Depending on the global technological
changes, innovative management techniques emerge

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such as; Total Quality & Knowledge Management,
Benchmarking, Flexible Manufacturing, Outsourcing,
etc.)
One of the crucial benefits of tracking the changes
in management techniques is, handling the required
information at required time, an important competitive
tool in the information era. Although tracking the
changes in management techniques is thought to be
straightforward, it is trickier than expected, as it is not
only implementing an information management system,
or a decision support system. Therefore a model is
required for this complicated process and proposed by
analyzing the 5 main functions of the management
concept. This model is based on a 5-scale Likert
Analysis to determine which method is used for each
management function respectively. If the most modern
techniques for the managerial function are used, it takes
the highest score on scale.
Planning is defining goals for future organizational
performance and deciding on the tasks and use of
resources needed to attain those [10]. Increasing the
requirement of complex planning activities bears the
transformation of plans. According to this
transformation 5 scales of Planning function are; Rules,
Procedures, Planned Processes, Programs, and Rolling
Programs. Hence to measure the capability to manage
the change in planning function of managerial
activities, a detailed analysis is needed to set which
planning methodology is implemented at all. If the
existence of detailed rolling plans is testified including
all preceding methods, the Planning Function takes the
highest score on a scale.
Organizing is the process by which employees and
their jobs are related to each other for accomplishing
enterprise objectives [11]. A traditional organization
chart is constructed in pyramid form, with individuals
toward the top of the pyramid having more authority
and responsibility than individuals toward the bottom.
Other organizational structures, which depend on
different departmentalization choices are; Product
Based, Function Based, Processed Based, Customer
Based, and Territory Based [11]. If the existence of
Territory Based organization type, which is the most
important competitive tool for the global marketing
conditions, is testified, then the Planning Function
takes the highest score on a likert scale. Signals of
Product Based type, which is the primitive case, will
take the least score.
Leading is the art of influencing individual or
group activities toward achievement of enterprise
objectives [11]. Within an organization leaders
typically have 5 different sources of powers from the
primitive power to an interactive and effective one:
legitimate, coercive, expert, reward, and referent [10].
Existence of a referent power type will indicate an
advantage for the leading function and hence provides
a high score on the Likert scale whereas the legitimate
power will provide the least score on the scale.
Similarly, leader behavior type can be listed as
Dictative, Structural, Supportive, Achievement
Oriented, and Participatory, from the least desired to
the most effective case. Existence of a participatory
leader is desired for all sectors and provides the highest
score for leader behavior type.
For Controlling Function; Personal, Budget,
Project, Performance Evaluation, and Computerized
Controlling tools exist. According to analysis
performed in the manufacturing company, if
controlling activities are performed by computer
utilization, then it takes the highest score on the
respective scale.
For Communication Function; there are various
channels to communicate within the enterprise.
Downward is the least desired channel in that the
managers only dictate. Upward & Lateral channels are
better to communicate interactively. Management by
wandering is also an important channel to get the
information directly. To get the highest score from
Communication function all of these methods should
be performed properly.
To conclude Managerial Change model, 5
management functions, which are Planning,
Organizing, Leading, Controlling, and Communication,
should be analyzed within the manufacturing system.
Utilization of contemporary methods for each function
indicates the tracking of change in management
functions.
2.4 Customer Oriented Change Stage
Customers are important factors of any enterprise
willing to survive. Even if the company follows the
changes in Technology or in Managerial Functions, it
is inevitable to bankrupt in case of disregarding the
customer demands. Since the customers are the
lifeblood of any business, to manage the changes in
customer demands is considered to be a vital part of the
overall Change Management model for manufacturing
systems.
Changes in customer demands generally occur by

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the effect of technological and environmental changes.
To forecast the future demands by analyzing the
changes in customer profiles is an important task of
manufacturing companies. Therefore, to understand the
market structure and customer changes, a customer
oriented change model is essential.
In addition change in delivery time and method is
another factor that should be investigated. By the effect
of globalization and competitive market structure,
customers wish for “on time” and “best delivery”
option of the products. However, it is the most difficult
subject of all science to model human psychology
depending on their changing demands. Therefore a well
organized customer portfolio analysis would provide
information about the degree of capability to follow up
the changes in customer demand. Moreover, the
companies can create some extra demands and gain
new customers through introducing new technological
products. In order to reflect these two aspects, the main
aim of the customer oriented change model should not
only be following the changes but also leading the
changes in customer demands.
Measuring the capability to create new customers
by the ratio of new customers’ revenue over total
revenue of the previous period is considered to be a
good metric for change management in this respect.
This metric can be entitled as “Get Ratio” of new
customers.
On the other hand to measure the capability to
follow the customer demand changes, the model should
measure the capability to retain profitable customers, to
win back profitable customers, and to eliminate
unprofitable customers. In fact this metric measures the
“Keep Ratio” of existing customers.
To analyze the capability to up sell additional
products, cross sell other products to customers, the
general way is to increase the amount of revenue
generated from that customer by up selling or cross
selling techniques. This “Growth Ratio” metric
measures both the following and leading capability for
the change in customer demands of the company
2.5 Environmental Change Stage
A manufacturing system should not only regard
technological or customer oriented changes but also
take into account of environmental changes such as
ecological or demographical ones.
Manufacturing companies should consider the
current debate about global warming while designing
future manufacturing planning. If not, manufacturing
investment would not bring acceptable profit or these
would totally be a waste of time and money.
On the other side, in demographical change phase
two important transformation occurs in “Populating”
and “Aging” aspects of the demographical structure.
These aspects are different from the customer change.
Since these two aspects occur in the whole population
independent of the customer demand changes. To
analyze the “Aging” and “Populating” aspects of the
population will indicate the future potential customer
profile.
To conclude the environmental change
management model, ecological and demographical
changes should be studied to reflect the changes in
manufacturing systems as well as the previous stages.
The study continues along this line.
3. Conclusion
Change management is crucial to survive in the
rapid changing environment. Although there exist so
many change management models in literature, the foci
are only on the management functions in general. In
order to take the attention of the change process on
manufacturing, a general framework is introduced in
this paper. Each elements of the proposed framework is
investigated in detail, a methodology to measure the
capability for each component is being defined and
presented in respective scientific events.
5 important elements of the change in
manufacturing are analyzed to be; Technological,
Process, Managerial, Customer Oriented, and
Environmental change stages. This study is a part of an
ongoing study, the overall model to manage the
changes in manufacturing continues to be developed.
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