Process Improvement Using Organizational Development



Process Improvement Using Organizational DevelopmentSubmitted in partial fulfillmentof the requirement forLDR 696 Organizational DevelopmentElizabeth KingNovember 4, 2012Siena Heights UniversityAbstractOrganizational Development defined by Michael Beers as "a system-wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at: (1) enhancing congruence between organizational structure, process, strategy, people, and culture; (2) developing new and creative organizational solutions; and (3) developing the organization’s self-renewing capacity. It occurs through collaboration of organizational members working with a change agent using behavioral science theory, research, and technology.” (Cummings & Worli, 2009) The following paper integrates four models: the Positive Model, General Model of Planned Change, Comprehensive Model for Diagnosing Organizational Systems, and Force Field Analysis as the foundation for a planned organizational change. Subsequently, the elements of the change event are applied through a case study designed to improve the capital equipment ordering process of a large automotive parts supplier. The perspective selected for the study is that of an internal consultant assigned a task to improve the process. Process Improvement Using Organizational DevelopmentIdentified gaps in machine performance, missed delivery dates, plus higher than expected cost led to an assignment as an internal consultant to improve the capital equipment ordering process. For clarity, capital equipment is defined "Equipment that you use to manufacture a product, provide a service or use to sell, store and deliver merchandise. This equipment has an extended life so that it is properly regarded as a fixed asset." (Capital Equipment Small Business Encyclopediea, 2012) As a Purchasing Agent, I approached this assignment from the prospective of an internal consultant and implied the behavior science, theories and practices that comprise Organizational Development. The organization is an automotive parts supplier operating in Battle Creek, Michigan producing vehicle heating and cooling exchange systems for most of the world’s automobile manufactures. It operates as a wholly owned subsidiary with the parent company located in Japan. In operation for 25 years, the auto parts supplier employs a workforce of approximately 3,000 associates in a 1,000,000 square foot facility. Literature ReviewPositive ModelIn order to determine the primary actions needed to initiate and implement a successful change event, the Process Model and General Model of Planned Changed were chosen as the framework for the activity. The Process Model focuses on what is going right in an organization. It is often applied through Appreciative Inquiry, defined as the convergence of members in an organization in order to plan change through exploration of shared experiences and interactions. (Weatherhead School of Management at Case Western Reserve University, 2012) It requires members to invest in a shared vision within the organization. The Positive Model is illustrated in Appendix A. General Model of Planned ChangeWith the Positive Model chosen as the broad approach for improvement of the capital equipment ordering policy, specific activities will follow the General Model of Planned Change. This is a template for interacting with the organization, collecting information, determining the root problem, and offering recommendations. The steps consist of Entering and Contracting, Diagnosing, Planning and Implementing Change and Evaluating and Institutionalizing Change . Graphical illustration of the model is located in Appendix B. Important to note, the steps of the process do not always follow a straight progression but act as more dynamic elements as the steps overlap, feedback, and influence each other. (Organizational Development, 2009)Comprehensive Model for Diagnosing Organizational Systems The next step in the change process, deciding which level of diagnoses to utilize, consisted of three options. These were organizational level diagnosis, group level diagnosis, and individual level diagnosis. The chart in Appendix C displays the inputs, design components, and output of each level. For this project, group level diagnosis was chosen. Group level inputs concentrate on organizational design, focusing on the systems, structure, and culture of the smaller group in the organization. (Hawkins, 2011) Moreover, design components link to form the questions for analysis. These consists of Goal Clarity: how well does the group understand its objectives? Task Structure: How is everyday work designed? Group Composition: What factors comprise the group’s demographics, personal characteristics, and skill sets? Team Functioning: How does the group divide tasks, make decisions and relate to each other? (Cummings & Worli, 2009) Together, all of these design components combine to create outputs measured through performance results and quality of work life for employees. (Hawkins, 2011)Force Field AnalysisCreated by Kurt Lewin, Force Field Analysis is a decision-making tool that clearly displays the forces in favor of change against the forces in opposition to change. The tool can be used to aid in decision-making and to improve chances that the decisions made will reach success. This is made possible through clear illustration of relevant factors. The user can easily see which factors need strengthening and which to confront or reduce. (MindTools, 2011) A model of Force Field Analysis is available in Appendix D.DiscussionCapital Equipment Ordering Process Improvement Results Entering and contracting. This is the initial step in the organizational development process involving the original contact from an organization, discussing the initial problem statement, determining the true client, and developing the contract. (Cummings & Worli, 2009) The contract read as follows: The boundaries of this organizational development event are to improve the capital equipment ordering process by limiting gaps in machine performance and missed delivery dates and through reduction of higher than expected machine cost. For the project to be successful, the new process must receive mutual agreement by the Machine Design Department and the Purchasing Department. Implementation should proceed only with full management support. Additionally, types of information requested include samples of current equipment specifications, departmental work instruction and process flow documents. Throughout the project, I will take a collaborative role to combine the technical expertise of Engineering with my understanding of both the supply base and of the full ordering process. Feedback to the client will consist of an A3 report, a common organizational document that would explain the initial problem, steps taken, and plans for implementation. In order to achieve best project results, my request to Engineering Management includes access to people in the organization who play a role in the ordering process and adequate time for those people to work with me. In addition, from my management, I would need enough time in my daily work schedule to devote to the project, which was to start immediately. The initial management review will occur in three weeks and project completion at the conclusion of four weeks. Approved results will be shared with relative members of both departments. Lastly, success of the project outcomes will be monitored throughout the year and reflected in my performance appraisal at fiscal year end. Diagnosing. The process of understanding the systems that are functioning within an organization, leading the consultant to determine the root cause of issues and the best method to implement change. The core activities of diagnosing incorporate data collection, analysis of data, and feedback. (Organizational Development, 2009)The methods used to collect data were interview and unobtrusive measures, including my own experience within the organization. Interviews were chosen to build a stronger relationship with the members of the Engineering Team and to facilitate buy-in to project results. In addition, unobtrusive measures were chosen due to the availability of data and the low cost associated with data collection. Dimensions to be studied were information provided to the supplier, origination of request to build new and update current machines and the ordering process. Used for examination of the data collected, Force Field Analysis established five forces contributing to change and four forces working to maintain the status-quo. The forces favoring change consists of the desire to diminish friction between Engineering and Purchasing, poor supplier performance, higher than expected machine costs, limited time to devote to supplier performance issues and the desire to take advantage of lessons learned. Conversely, forces working to limit change consisted of insufficient time to devote to planning, no personal reward for improving the process, lack of management support, and low understanding of other departments’ processes. Ultimately, at the completion of data analysis, five items were established as best practices. These were multi-supplier kick off meetings, a standard process for reporting deviations from the specification, detailed cost breakdowns within the quote, order policy documents and Purchasing Department involvement from the project beginning.Subsequently, feedback of data relays information and builds energy to generate buy-in from the group to motivate action. Taken from Peter Blocks book Flawless Consulting, the content of the feedback meeting covers ten steps. Repeat the contract Discuss the meeting’s agendaPresent a clear pictureIntroduce recommendations Ask for initial reactionsHalfway through the meeting, ask the client if they are getting what they want Request the decision to proceed Test for concerns about control or commitment. Ask again if results meet expectationsOffer support (Block, 2011)Following this process, I presented four potential changes to current procedures. Instead of sending out request for quotes with the specification attached, a meeting in which all potential suppliers were invited would show a similar machine and provide suppliers with the opportunity to ask questions to Engineering and Purchasing before quoting a project. The current request for quote process involves sending out the specification and due date requirements for quote return. This format proves to be over-general and allows the supplier to provide minimal cost details. Therefore, elements that assist in price negotiation are held by the supplier. By requiring all suppliers to present a detailed cost breakdown to be considered for the project, a full understanding of cost drivers and cost differences between suppliers can be easily identified. Currently, the information gathered during many technical communications with the supplier before and after award of business determines what limitations the final machine will contain from initial expectations. In order to limit labor hours spent on communication and technical review, quote submission should reference which elements of the specification will be omitted. Moreover, this change aids within the legal aspects of purchase orders. If discrepancies surface, a clear outline of the expectations of both parties assists in problem resolution and settling contract disputes. Order policy documents convey an understanding of the supply base within a classification of machines. They are not presently utilized. A proper order policy should contain spend history, a list of pre-approved suppliers, the sourcing strategy, problems or concerns, and technical trends in the industry. The tool helps to build a strong supply base through the use of companies who performed competently in the past and exposes areas that contain gaps; therefore, allowing adequate time before a project start to find additional sources. In an effort to meet project requirements, members of the Engineering Department occasionally charge ahead with supplier selection and obtain quotes without informing the Purchasing Department. Eventually, the Purchasing Department will learn of the project as they are required to place an order. This creates a doorway for Backdoor Selling by an experienced salesperson. Backdoor Selling refers to tactics that create an unfavorable advantage for the seller often attributable to bypass of the buyer during negotiation. By the time the Purchasing Department receives the request to order, many of the negotiable items have been predetermined and sources for leverage have been counteracted. Therefore, best practice would be to involve the Purchasing Buyer from project kick-off.In accordance with Peter Block’s feedback process, I asked the group if the information presented was expected. For the most part, they answered yes. Resistance surfaced regarding Item 3. Concern was expressed that Engineering would totally lose control of supplier selection. As a result, it was agreed that order policies would be approved and signed by both departments before implementation. It was very important that resistance be brought to the surface and addressed if the group would successfully execute and maintain change.Planning and implementing change. After the feedback meeting, it was time to put the group’s decisions into practice. Each of the five recommendations was converted from an idea into a process that would be utilized to complete tasks. This type of intervention is a Structural Process Intervention aimed at improving the system and tools for completing work. Interventions are actions used to disrupt the normal running of business in order to create positive change that increases the organization’s effectiveness. (Cummings & Worli, 2009) For example, attached below in Table 1, the quote breakdown sheet mentioned in Change 2 provides a clear outline for suppliers to follow. All elements that comprise the full cost are displayed for easy comparison. In a second example, Table 2 references the Exception List Form for use by the supplier to quickly report exceptions from the specification. This form provides a template for suppliers to follow and can easily be referenced in the purchase order. Additionally, refer to the Appendix E for a sample order policy as listed in Change 4. Table 2Evaluation and institutionalization. The final steps in the General Model for Change involve feedback to the organization about their success with the intervention. It includes next steps that will make the change permanent or the determination to start the organizational development process again. (Cummings & Worli, 2009)In the project to improve the capital equipment ordering process, all five recommendations were adopted and put into practice. While the changes are newly implemented, measurement will be seen in the tracking of delivery dates, recording of cost reductions, and supplier performance improvement. Furthermore, institutionalization will occur through training directed at cross-lining the improved procurement process to additional commodities within the organization. ConclusionThe field of Organizational Development provides theories, guideline, and numerous tools for individuals to employ in efforts aimed at improving components of any business. Highlighted in this paper, diagnosis at the group level accompanied with adequate consulting skills brought positive changes to the organization. In addition, engagement of individuals from multiple departments to find best practices strengthened the work team.ReferencesBlock, P. (2011). Flawless Consulting: A Guide to Getting Your Expertise Used. San Fransico: Pfeiffer.Capital Equipment Small Business Encyclopediea. (2012). Retrieved November 1, 2012, from : (2009). In T. G. Cummings, & C. G. Worli, Theory of Organizational Development and Change. Stamford, CT: CENGAGE Learning.Hawkins, F. (2011, March 12). Diagnosing Organizational Systems: Group Level. Retrieved November 1, 2012, from Five Star Consulting: http:2011/03/12/diagnosing-organizations-systems-group-level.htmMindTools. (2011). Retrieved 1 2012, November, from Force Field Analysis - Decision-Making Skills from : Development. (2009). Retrieved November 1, 2012, from Zeepedia: _planned_change_entering_and_and_contracting_magnitude_of_change_organizational_development.htmWeatherhead School of Management at Case Western Reserve University. (2011). What is Appreciative Inquiry? Retrieved November 1, 2012, from Appreciative Inquiry Commons: AAppendix BAppendix CAppendix DAppendix E ................
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