Change and innovation in logistics and supply chain management
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This document discusses change management and innovation. It begins by defining change as an event that occurs when something passes from one stage to another. It then discusses factors that can facilitate or resist cultural change, such as crises, leadership changes, organization size and culture strength. The document outlines Kotter's 8 step change management model and Lewin's 3 step change model of unfreezing, changing, and refreezing. It also discusses different types of innovation from incremental to radical and lists techniques for managing resistance to change.
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Change and innovation in logistics and supply chain management
- 1. By Jutharat Ahchawarattaworn, Ph.D. 17-18 Oct 2015
- 2. “Change” is… “Any event that occurs when something passes from one stage to another.”
- 3. People: Attitudes Expectations Behaviors Structure: Organization’s structural components Structural design Technology: New equipment or process Automation & Computerization Internet
- 4. “Cultures are naturally resistant to change” Conditions that facilitate cultural change: ▪ The occurrence of a dramatic crisis ▪ Leadership changing hands ▪ A young, flexible, and small organization ▪ A weak organizational culture
- 5. Constant..…yet.…Varies in degree and direction Uncertainty……yet……. Not Unpredictable Threats……and…..Opportunities
- 6. Force ResistanceChanges Really? Why? For whom? What so ever! No..! eh…! What? Ok, let’s start it soon! How?
- 9. Consumerism Sustainability pressure Risk and Disruption Globalization Demographic changes Technology Cost pressure Volatility Knowledge based Economy Network Economic Urbanization Source: Adapted from BVL international, 2013
- 10. External Forces Internal Forces
- 11. External forces Marketplace Laws and regulations Technology Labor market Economic changes Internal Forces Strategy Workforce changes New equipment Employee attitudes
- 12. Ref. John Fisher, 2012
- 13. The ambiguity and uncertainty that change introduces The comfort of old habits A concern over personal loss of status, money, authority, friendships, and personal convenience The perception that change is incompatible with the goals and interest of the organization
- 14. Technique When used Advantage Disadvantage Education & Communication Misinformation Clear up misunderstanding May not work when lacking of trust Participation Expertise make a contribution Increase involvement & Acceptance Time consuming Facilitation & Support Resister’s fearful & anxiety ridden Can facilitate needed adjustments Expensive & no guarantee of success Negotiation Powerful group of resisters Can buy commitment Potentially high cost; others might apply pressure too Manipulation & Co-optation Powerful group’s endorsement is needed Inexpensive, easy way to gain support Can backfire, causing change agent to lose creditability Coercion Powerful group’s endorsement is needed Inexpensive, easy way to gain support May be illegal; may undermine change agent’s creditability
- 16. 1. Reactive Change -Making changes in response to problems or opportunities as they arise 2. Proactive Change -Involves making carefully thought out changes in anticipation of possible or expected problems or opportunities. -Also called Planned Change
- 17. Unfreezing “Creating the motivation to Change” Changing “Learning new ways doing things” Refreezing “Making the new ways normal”
- 18. Unfreezing Changing Refreezing “Creating the motivation to Change” • What needs to change • Get support • Create the needs • Manage & Understand the concerns
- 19. Unfreezing Changing Refreezing “Learning new ways doing things” • Communicate • Dispel rumors • Empower action • Involve people in the process
- 20. Unfreezing Changing Refreezing “Making the new ways normal” • Anchor the change into the culture • Develop ways to sustain the change • Provide support & training • Celebrate success!
- 21. Unfreezing Changing Refreezing • Burning Platform: “Create a crisis or hard data that is difficult to ignore.” • Challenge: Inspire them to achieve remarkable things. • Command: Just tell them to move! • Education: Learn them to change. • Management by Objectives: Tell them what to do, but not how. • Restructuring: Redesign the organization to force changes. • Rites of Passage: Hold a wake to help let go of the past. • Whole-System Planning: Everyone planning together.
- 22. Unfreezing Changing Refreezing • Boiling the Frog: “Incremental changes may well not be noticed.” • Facilitation : Use a facilitator to guide team meetings. • First Steps or Quick Win: Make it easy to get going. • Involvement: Give them an important role. • Re-education: Train the people you have in new knowledge. • Shift-and-Sync: Change a bit then pause restabilize.
- 23. Unfreezing Changing Refreezing • Burning Bridges: “Ensure there is no way back.” • Evidence Stream: Show them that the change is real. • Institutionalization: Building change into the formal systems. • New Challenge: Get them looking to the future. • Rationalization Trap: Get them into changing process. • Reward Alignment: Align rewards with desired behaviors. • Socializing: Build it into the social fabric.
- 24. Dr. Kotter observed that… “The rate at which our world is changing is increasing, But Our Ability to keep up with it is not!”
- 26. 1: Create Sense of Urgency “creating a compelling reason for why change is needed” 2: Form a powerful coalition “Assemble a group with the power and energy to lead and support a collaborative change effort.”
- 27. 3: Create a strategic vision and initiatives “Shape a vision to help steer the change effort and develop strategic initiatives to achieve that vision.” 4: Enlist a volunteer army “Raise a large force of people who are ready, willing and urgent to drive change.”
- 28. 5: Removing barriers “Remove obstacles to change.” 6: Generate short term win “Consistently produce, track, evaluate and celebrate volumes of small and large accomplishments.”
- 29. 7: Sustain acceleration “Change leaders must strategically adapt to any situation.” 8: Institute change “To ensure new behaviors are repeated over the long-term
- 30. • Planning • Budgeting • Organizing • Staffing • Problem solving • Measuring • Doing what we know how to do • Producing dependable reliable results • Establishing direction • Aligning people • Motivating • Inspiring • Mobilizing people to achieve astonishing results • Propelling us to the future Management Leadership
- 31. 1. Diagnosis -What is the Problem? 2. Intervention -What should we do about it? 3. Evaluation - How well has the intervention worked? 4. Feedback -How can the diagnosis be further refined?
- 32. According to Oxford English Dictionary… Innovation means “Introduction of something new” So Innovation can be defined as… “The introduction of a new product, service or process into the market.”
- 33. Creativity - the ability to combine ideas in a unique way or to make an unusual association. Innovation - turning the outcomes of the creative process into useful products, services, or work methods. Idea Champions - individuals who actively and enthusiastically support new ideas, overcome resistance, and ensure that innovations are implemented.
- 34. Management Innovation Strategic Innovation Business Model Innovation Value Innovation Product Innovation Service InnovationMarket Innovation Process Innovation Technological Innovation Disruptive Innovation Application Innovation Experiential Innovation Marketing Innovation Structural Innovation Brand Innovation User Lead Innovation Supply Chain Innovation Evolutionary Innovation Revolutionary Innovation Innovation “Innovation comes in many flavors”
- 35. Incremental Innovation Improvements of an existing design Modular Innovation Complete redesign of core components, while leaving linkages between the components unchanged Architectural Innovation Changes the nature of interactions between core components, while reinforcing the core design concepts Radical Innovation A whole new design, potentially a paradigm shift
- 37. Cassette-tape Sony Walkman sold an astonishing 186 million unit in its first 20 years of existence iPod, a digital music player weighed 6.5 ounces and held 1000 songs with cost $400 (much more than existing digital players) iPod skeptically might be acronym for “Idiots Price Our Devices” 1.4 million iPods have been sold (claimed No 1 in Jul and Aug) it's harder to nail down whether the key is what's inside it, the external appearance or even the way these work together
- 39. Internal External DiscontinuousContinuous Management Innovation Operational Innovation Product & Service Innovation Strategic Innovation Processes Technological innovation Disruptive Innovation Blue Ocean Strategy New offerings Partner interfaces Internal structures and processes People Management Channels Brand Networking Supply Chain Technological innovation New markets
- 41. www.innovationlab.com Why innovate The link between innovation & organization’s strategy What portfolio The right innovation project How to innovate The effective innovation process Who innovate The engagement of people in the innovation process Where we innovate The right tools in place to support innovation
- 45. Supplier Producer Customer • Raw material • Components • Services • Products • Services • Retailer • Wholesaler • Distributor • End user Logistics and Supply Chain Management: • To have the Right Product • In the Right Quantity • At the Right Place • At the Right Time • With the Right Cost Quali ty Cost Basic Supply Chain Structure
- 46. Information flow Specs, Orders, Invoices, Receipts, Rules and Regulation etc. Product/Service flow incl. Return, Repair, Replacement, Recycling & Disposal Cash flow Payment for supplies, product & service Supplier Producer Customer • Raw material • Components • Services • Products • Services • Retailer • Wholesaler • Distributor • End user
- 47. Source: BVL international, 2013
- 49. Technology Technology investment Process Control, Standard, Integrated planning Network Vertical & Horizontal Cooperation People Talent mgt. Rapid decision making
- 50. Raw Material Consumer Manufacturer Disposal Retailer P S D P S DM P S D P S D P S D
- 52. “Start from the fundamental & compulsory activities with consistency, efficiency and seamless execution” Spend management: Targeting price and finance Direct contracting: Securing contracts for all spend Logistics services: Optimizing product flows Inventory management: Establishing efficient inventory deployment Information management: Fully deploying IT
- 53. “Extended services build on the fundamentals and penetrate deeper within the organization's supply chain activities.” Industry data standards: Adopting standards Enterprise value analysis: Broadening the value analysis to all enterprise spend Enterprise sourcing & procurement: Centralizing all sourcing and procurement Utilization: Targeting the significant products efficiency and effectiveness of use
- 54. “Continuing the advancement in providing supply chain competencies” Supplier synchronization: Implementing strategic programs to lower total cost for both parties Product assembly: Exploring the self-assembly Regional cooperatives: Affiliating with other entities in supply chain Procure-to-pay: Consolidating the cycle management from purchase order to payables Shared services: establishing a central operation for all enterprise supply chain activities
- 56. Initiatives to improve the supply chain process take one or more of the following paths: Product/service category management Beginning with end-user clinical requirements Departmental point solutions Focusing on a specific department issues Supply chain functional efforts Evaluating specific supply-chain-oriented operations
- 57. Approach Goal •Reduce costs of products and services Pricing Standardization Utilization Goal: A 5%–10% reduction in annual non-labor expenses, annual spend compression and containment; optimized utilization and consumption Market maturity: Mature, ongoing, mandatory to control spend Time to goal: 4–15 months
- 58. Approach Goal •Reduce costs of supply chain operations Processes and service levels Technology development Total costs-to-serve Control procedures Mentoring and development Goal: A 5%–10% reduction in annual supply chain management operating expenses, enhancing management control and supply chain operation performance Market maturity: Mature; a must-have to ensure efficiency Time to goal: 3–12 months
- 59. Approach Goal •Take a strategic approach to supply chain management Sourcing and procurement Consolidated support service operations Outsourcing Goal: A 5%–15% reduction in annual non-labor spend, enhanced compliance, reduced duplication of services, greater control of total supply and service spend Market maturity: Emerging leaders are adopting now Time to goal: 6–18 months
- 60. “an organization’s obligation to consider the interests of their customers, employees, shareholders, communities, and the ecology and to consider the social and environmental consequences of their business activities.” Integrating CSR into Core business Ultimate Goal Social Value Corporate Value Corporate Social Responsibility (CSR)
- 61. Defensive CSR Charitable CSR Promotional CSR Strategic CSR Transformative CSR STAGE of CSR Age of Greed Age of Philanthropy Age of Marketing Age of Management Age of Responsibility Tackling Root causes of our present unsustainability and irresponsibility Relating CSR activities to the company’s core business Enhancing the brand, image and reputation of the company Supporting various social and environmental causes through donations and sponsorships Only for shareholder value
- 62. “SAMPRAN MODEL”
- 66. • Starts with an Excellent Operation • Fostered by an environment of strategic partnership
- 68. Adopt an organic structure Make available plentiful resources Engage in frequent inter-unit communication Minimize extreme time pressures on creative activities Provide explicit support for creativity
- 69. Accept ambiguity Tolerate the impractical Have low external controls Tolerate risk taking Tolerate conflict Focus on ends rather than means Develop an open-system focus Provide positive feedback
- 70. Actively promote training and development to keep employees’ skills current Offer high job security to encourage risk taking Encourage individuals to be “champions” of change
- 72. Creative work environments “Flow” The psychological state of effortlessness in which you become absorbed in your work and time quickly Expanding Sources of Innovation Give credit, don’t take it!
- 73. Creative Work Environments Challenging Work Work Group Encouragement Lack of Org. Impediments Supervisory Encouragement Organizational Encouragement Freedom Flow
- 74. Parts of Experiential Approach Milestones Design Iterations Testing Multifunctional Teams Powerful Leaders “Key to innovation is to use Intuition, Flexible options & Hands-on experience”
- 75. Parts of Compression Approach Shortening Time of Individual Steps Planning Supplier Involvement Overlapping Steps Multifunctional Teams “Assumes that innovation is a predictable”
- 76. Innovation = f (Risk) (Speed) (Engagement) (Leadership) + (Tools)
- 78. Changing the Work Setting 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 55% Changing the People 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success57% Changing Individual Behavior & Organizational Performance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 76%
- 80. Embrace change—become a change-capable organization. Create a simple, compelling message explaining why change is necessary. Communicate constantly and honestly. Foster as much employee participation as possible— get all employees committed Encourage employees to be flexible Remove those who resist and cannot be changed
- 81. Tel 0 2202 3618 Fax 0 2644 4355 Email jutharat.ahcha@hotmail.com www.logistics.go.th Thank you