1. Running head: UPDATING THE CAPACITY PLANNING GROUP
Implementing the Change Model: Updating the Capacity Planning Group
Kristine Mauro
Seth Parker
Frank Isham

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Implementing the Change Model: Updating the Capacity Planning Group
In 2012 and 2013, Kellogg as a major food manufacturer, like most of the world, was
recovering from the failed economy. The senior leadership team thought it was important to
implement a global business strategy (GBS), rather than a regional strategy to provide visibility
and decision-making from Headquarters to be implemented regionally.
At Kellogg’s Headquarters, there is a group of 12 men and women who are responsible for
mid- to long-range planning of food manufacturing at nearly 120 manufacturing facilities located
around the world. This group was formed in 2013 as the Capacity Planning Group (CPG). They
use a variety of tools such as spreadsheets, databases, and computer programs to create statistical
models to predict and match plant manufacturing to customer demand for over 1200 food
products. The results of the analyses of these models determine if new plants are needed and
where, which food manufacturing plants are to be improved, and which plants are to be closed.
The decisions made from these results effect the lives of 1000’s of people globally. The
sensitivity and the confidentiality of the outputs of this group dictate that the information of this
paper is limited to organizational changes with the CPG. No changes to Kellogg as a result of
these decisions will be discussed.
Four years ago, Kellogg started upgrading to a newer version of the SAP Enterprise
Resource Planning (ERP) system that maintains all company production, financial, distribution,
and logistical information. As a result of the upgrade, the spreadsheets, databases, and computer
programs used by CPG would no longer be usable. In addition, the tools were eight years old or
older and were becoming outdated and obsolete. A project was created at the end of 2013 to
replace these planning tools and create new innovative, planning standards for the global
company in North America, Europe, and Asian Pacific. This paper describes how the CPG

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completed the Llamasoft Network Optimization Project to implement the new tools and create
the new planning standards.
Updating the Capacity Planning Group
In 2013, Kellogg realized that the tools and the means for planning were outdated and
needed to be replaced to meet the competitive demands of the future. Many of the tools would
simply not work with the new system. The old systems were also limited to displaying the
analytical results in old, outdated ways by listing large numbers of columns of data and bar
charts that were too simple to convey the complex nature of the analytical results. Last year, the
CPG completed a proof of concept project and selected a new innovative planning and analysis
tool to replace the outdated tools. In December of 2013, a project (The Project) was approved
and funded to: 1) implement the new tools, 2) convert the old models to the new format, 3) create
standards and processes for analysis, and 4) continuously improve the operational performance
by monitoring key indicators and adjusting the process accordingly.
Step 1: Establishing a Sense of Urgency
Unfortunately, nothing creates a sense of urgency among the working force like down-
sizing and steam lining created from a down-turn economy. The CPG had suffered through a
reorganization that had reduced the staff, created the new organization, and moved new
responsibilities to the new group. In the wake of all of these changes, the CPG saw The Project
as a way to produce quick results and demonstrate a valuable strategic capability and therefore
create a long term need and stability for the group. The CEO and executive management of
Kellogg supported the call for urgency by placing The Project on the “Must Win” project list of
the GBS initiative and monitor the project progress regularly.

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Step 2: Creating the Guiding Coalition
As an approved and funded project, Kellogg’s Project Management Office (PMO) assigned
a project manager to facilitate the initiation, planning, design, execution, and control of the
overall initiative. The project manager had extensive supply chain experience and had
successfully implemented a similar project three years earlier.
In addition to the project manager, the CPG was led by an individual with the title of
Senior Director coming from a major acquisition who was politically in touch with senior
management. Both the project manager and the group leader sought true leadership from within
the group to lead the team and drive change. The group leader and the group had an established
level of trust and a common goal that was developed through years of working together. They
had recently been reorganized to focus on creating capacity planning models.
Step 3: Developing a Change Vision
One of the first steps in creating the project was to assemble the team and create a project
charter. In the charter, the vision or the concept for the outcome of the project is clearly depicted
as well how the project process is to be conducted, who will be involved and what is their role
and responsibilities. The charter also provides direction for what is included in the scope of the
project and what is not. Finally, the project charter defines the plan of what is to be delivered to
whom, by when. It provides approval and authority for the distribution of funds and resources.
Not only does the charter define the change, but also how the change will be managed and
controlled.
In addition to the charter, a concept of operations was developed. In narrative form, the
concept of operations provided a vision for what could and what would be. The concept

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provides a very high level of requirements for the project and tries to clarify the intended purpose
of doing the project. Where the project charter depicts how the project will be executed, the
concept of operation provided details of what will be delivered.
Step 4: Communicating the Vision for Buy-in
Communication is perhaps the most important aspect of successful completion of the
change process. Communication is ongoing and not a one-time thing. Conducting workshops,
status meetings, reviews, planning sessions, and “touch-base” type meetings provided many
opportunities to evangelize the mission of the project. Communication and direction within the
team is needed to make sure tasks and activities stay coordinated and prerequisites are completed
on time for follow-on effort. Continuous reporting of small accomplishments or setbacks keeps
team expectations and motivations real-time and effective.
Communications outside of the team provide: 1) the project’s current status and
accomplishments 2) the project’s planned accomplishments and next challenges, 3) the team’s
expression of issues and the call for help, and 4) the sponsor’s and customer’s possible concerns.
Regular communication with those inside and outside of the project helps ensure continued
support by reiterating the vision by conveying that the team “Talks the Talk.”
Step 5: Empowering Broad-based Action
Empowering broad-based actions is another way of saying “remove the obstacles”. The
project manager is always saying “What is keeping you from doing it now?” regardless of the
due date. Going from Step 4 to Step 5 is the difference of just talking about it to doing it. It is
important that you “Walk the Walk” after you have “Talked the Talk”. For The Project, a major
barrier was the lack of a standard approach to developing models. The team members have been
doing this work for many years, and in some cases, over 15 years. The team had developed into

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one that operated from “Tribal Knowledge”. There were no instructions written anywhere and
when a new member joined the team they were coached by the experienced modelers until they
could “figure it out on their own”. Since going to a new set of tools and processes meant no
“tribal knowledge”, standard operating procedures (SOPs) would have to be developed that
would provide consistency and instruction to the team.
Empowering team members to make improvements to the process fosters ownership and
buy-in. At some point, the project process of modeling went from being a design document to
being “ours”. Not only was the team leadership “talking” about the importance of following the
process, but now the team members were telling each other about the importance of following
the process. It was being accepted culturally as being by the group and for the group, not “that is
what they told me to do”.
Step 6: Generating Short-term Wins
Short-term wins provide sustained motivation to the team. The Project provided a
breakdown structure that created activities and tasks out of the major deliverables. As each
model was being created, interim reviews and checkpoints were created so no effort would go for
longer than two weeks (80 hour rule) without being reviewed. Best practices were identified and
rewarded quickly while setbacks and non-compliance were addressed with short remedial
attention, then dropped. Lesson Learned sessions were held at the end of each model completion
to identify what worked well and what needed to be changed.
Step 7: NeverLetting Up
There are differences between projects and change initiatives. A project has a defined start
and end date. It has discreet goals to be accomplished within a specific time period. A change
initiative is a continuous process that improves incrementally with time. The Project for CPG

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has the objective to not only convert an initial set of models to the new tools and formats within
a specific time frame, but also to implement a standard for modelling procedures that is
complete with written instructions for every member of the group to follow. Although there are
still Subject Matter Experts (SMEs) within the team, any team member should be able to follow
the process to complete any model.
The team is committed to use the process even though it may be flawed or complex. They
are committed to removing the flaws and simplifying the process. Over time, more models and
more planning groups will be added to ensure that the changes are permanent and become a
process foundation at Kellogg.
In the coming months, Phase II of the change initiative is going to Europe. The process
will start all over again, but this time, the initial charter, concept of operations, the standard
operating procedures, and the continuous improvement process will already have been created.
Cultural Intelligence (CQ) will also play an important role in making sure these products created
in North America is accepted and adopted by the international team members. It will be the first
priority of the project manager to review and makes changes to fit the cultural differences of the
global regions then start the Kotter 8-step Process all over again. (Livermore, 2010)
Step 8: Incorporating Changes into the Culture
The change agent for the project activities, the initiator of this change, started as an external
consultant of Kellogg. This demonstrates that when the sense of urgency for the change as well
as the readiness for the change is great, it matters less about who drives the change. More than
that, in less than ninety days into the project, the team demonstrates more commitment than ever
towards the successful completion of the project.

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The CPG has a new sign in their work area that states, “The Project is not in addition to
your work, it is how you do your work.” Although the project is not yet 50% complete, it is well
on its way to being the accepted standard in their modeling organization. The leadership
continues to support the changes and provides praise and encouragement for the
accomplishments thus far.
The process was diagrammed and control points were identified where handoffs within the
project occur. Using Carnegie Melon’s Capability Maturity Model process (Mino, 2012), Total
Quality Management charts were developed to pinpoint areas where more improvement is
needed. For every suggested improvement or lesson, the team identifies the impact to quality
(accuracy), cost, timeliness, and responsiveness.
One of the key sustaining activities for the group is the commitment to review each and
every model as it is completed for “lessons learned”. In this activity, the discussion is open and
the project team is honest and candid about what worked and what did not. At that point, the
team determines what improvements need to be made and updates the process. And again, for
every suggested improvement or lesson, the team identifies the impact to quality (accuracy),
cost, timeliness, and responsiveness.
The most confirming indication that the changes produced by the project are permanent,
and has been incorporated into the culture, is when a new team member is transferred to the
group. Without hesitation or direction from management, the team trained the new member
using the project documentation and processes.
Summary
Implementing and supporting a change on this level is hard work. Even with all the effort
to carefully plan and build a basis for improvement, it is not guaranteed that every project will be

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successful. While being calm and collected is an asset when working with people under the
stress of performing their job and simultaneously completing a project, Kotter’s 8-Step Change
Model provides a very usable process for leading change. Being able to meet the challenge of
change increases the chances for success and Kotter’s model is great tool for overcoming the
challenge of change.

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References
Ivancevich, J. M., Konopaske, R, and Matteson, M. T. (2013) Organizational Behavior &
Management McGraw-Hill Irwin, New York, New York
Kotter, J. P. 1995. Leading change: Why transformation efforts fail. Harvard Business Review
(March-April): 59-67.
Livermore, D. (2010). Leading with Cultural Intelligence: The New Secret to Success. American
Management Association. New York: New York. ISBN: 13:978-0-8144-1487-3.
Mino, M. J. (2012) CMM: Beginners Understanding, Create Space Independent Publishing
Platform. ISBN: 10:147-5-1909-56