Discuss about the Business Change Order and Production CHEMS Ltd.
CHEMS Ltd is a leading industrial chemical producer that caters the special needs of the customers by producing customized industrial chemicals.
In order to handle and process the received orders in an efficient manner, the company has skillfully employed the three management tiers namely, the Production Managers, the Senior Managers and the Chief Accountant. The Production Managers are entirely responsible for making of the desired products while the Senior Managers produce weekly management reports for the critical analysis of the progress of ongoing projects. The Chief Accountant on the other hand, simply approve changes in the costing of the products and the quality of the inputs mixed in order to deliver the best possible services to the customers and even maintain a synchronization with the ongoing advancements and changing consumer behavior in the markets (Arena Solutions, 2017).
The Senior Managers produce weekly report collaborating all the available information and these reports are presented to the Chief Accountant via the company’s Electronic- mail (E-mail) system. The Senior Managers consider this medium of transfer of information as an inappropriate one with a lot of time consumption. So, when the Senior Managers are asked to review the reports on-screen, then they usually turn hostile towards the information being processed.
The Chief Accountant is the only one that can recommend ample of changes in the costing of the products as well as in the quality and quantity of the inputs in the order. There is no one above this tier that can effectively analyze and review the decisions made by the Accountant. Hence, there can be a number of cases where this tier can make independent decisions overlooking the requirements of the customers as well as the priorities of the company in the times of economic crisis (Team, 2016).
The company has got precise four stages through which an order passes in order to reach the consumer from the production unit. These stages are highly interconnected and their order cannot be changed. The stages include: Quotation, Material Ordering, Production and Packaging and Shipping. Each of these stages takes approx one month each and hence in overall, it takes 4 months to complete a single order. Although, these stages increase the precision level of the order being processed, avoiding a number of flaws and errors in the order processing, yet the time taken by each of the stages is quite long which could be readily minimized by implementing alternative and automated production equipment unit in the firm. The alternatives would be discussed in the coming sections of the report (Brown, 2008).
Effectiveness of the Production Reports in assisting Senior Managers
The Senior Managers receive weekly reports which are processed and further transferred to the Chief Accountant for critical evaluation and changes. The report usually consists of the Production Cost per batch, the Profit earned in each week and the manufacturing costs involved in each of the project. The input mix information is also provided to the Senior Managers for all of the projects so that a quick review could be made and the changes could be made even at the smallest possible level (Bolin, 2016).
The prime problem with the report processing is that the Senior Managers have to manually transfer the available information in their own summary report and this process could lead to a number of errors during the process. The manual transfer of information is highly prone to mistakes as compared to the automated computerized transfer in which the information is copied and processed in a batch format. Hence, the redundancy of the information could be avoided to a large extent and even the employees could engage their minds in order fruitful processes that could bring quick success to the company.
From the above analysis, it could be easily concluded that although the reports, provided to the Senior Managers, consist of all sorts of useful information, yet the Senior Managers need to access the company’s database easily, in order to produce more effective reports to the Accountant Managers. The manual inclusion of the crucial elements in the available reports by these managers is also a risky task as the process is prone to a number of flaws and errors (Queensland Government, 2012).
While processing the reports and forwarding it to the Account Manager, the Senior Managers are also expected to use the company’s own technical databases for a better and detailed understanding of the ongoing events while processing an order. But, this database could not be used frequently as the Senior Managers do not have a quick access to it and even the manual processing of information restricts the Managers to readily reach out for the already present information in times of emergency and economic turmoil. The automation of the various stages of the production process could resolve this issue up to a great extent (Redman, 2009). But, this change implementation process is also very challenging as the Managers have to select the most appropriate change plan that over which all the other members of the company readily agrees.
CHEMS Pvt. has its own database and periodically provides information to the Senior Managers in the form of reports. The managers are also provided information by the Production Managers in a verbal manner, including all sorts of crucial information for the other high level tiers. Apart from this, the Senior Managers could also avail crucial information from the technical journals but for this service they have to spend on their own. The weekly production meetings and seminars also contribute in the information collection process. Hence, it could be concluded that the company has managed to provide a good level of information to its Senior Managers from myriads of possible sources so that this tier could respond in a better manner to the needs and requirements of the managers above them (IES, 2017).
Critical factors to judge the success of the change
The factors that could be used to judge the success of the change process being implemented are as follows:
(i) The increment in the number of order placed in each financial year will definitely mark the success of the ongoing change in the Order and Production Process. If the orders placed decline in the coming years then this may depict that the Change Plan was not compatible with the current resources and working strategies of the company. The orders could be easily increased if the change is effectively implemented in all the spheres of the company and its benefits are conveyed to all the beneficiaries in an equivalent manner. The increment in orders could be simply analyzed by the increased profit as well as the sales rates in the coming years (Rick, 2014).
To precisely analyze the increment rates, the subordinates could submit periodic reports to the managers which could be further processed to the senior level officers. For effective results, the collected information could be synchronized with the available databases with the company. This step may avoid the redundancy of the information and may even reduce the errors that might occur in the Information Processing period.
(ii) The second factor that could be used to analyze the success rate of the change plan could be the satisfaction of the employees with the company’s strategies and policies and their active participation in the firm’s Change Plan (Phil, 2015). The positive response of the senior executives as well as the subordinates will unveil the acceptance of the Changes in the order and production process. In order to increase the participation of the employees, the managers need to include all sorts of crucial elements in the change plan keeping in mind the requirements of all the major and minor beneficiaries involved with the firm (Bond, 2013).
The satisfaction of the employees could also be measured by the employee retention rate of the firm. The increasing rate signifies that the employees are highly satisfied with the ongoing changes in the company and may serve for a longer duration for the firm. The retention of wise and reliable employees is crucial for the company as the experienced staff members turn out to be a good asset for the firm as they might prepare the other inexperienced human resources to face the business challenges in the new as well as the current markets (Tearle, 2011).
The most preferred changes that could be readily implemented in the Order and Production Process are the ones that have the ability to save the time within myriads of stages of Order and Production Process. To save time and prioritize the crucial operations over the other non-important ones, the executives could adopt the following methods:
The company cannot implement all the above suggestions simultaneously but the implementation of all these methods have a single outcome that the Order and Production Process would be carried out at a fast pace. By incorporating these suggestions, the time might reduce to one to two months in which the minimum time would be taken by the Material Ordering step. The Automation of the activities will also reduce the Packaging and Shipping Processes to 15- 20 days.
The Decision Support Systems (DSSs) are considered as the business intelligence tools that help the organizations to take crucial decisions in an easy manner. The DSSs, if effectively implemented, provides ample of unbiased data analysis and real time monitoring of the events going on in the firm so as to support the executives to make good decisions in least possible time. To develop the most efficient ISs and DSSs, the executives have to keep in mind the following factors and elements:
The Company is planning to automate its Order and Production Process and for this it can readily implement the Enterprise Resource Planning (ERP) system. This business process management software often allows a company to use integrated applications so as to automate numerous functions and integrate all the steps of an order in a single database, application and user interface. The central feature of this software is the shared database that has the capability to serve multiple functions of different business units in a simultaneous manner. A single piece of information, gathered by the Senior Manager in the firm can serve the purpose of both the Accountants and the Sales Manager at a single point of time. This software also allows the managers to offer synchronized reporting and automation (Ravichandran, 2017). The maintenance of separate databases by myriads of units is a tedious task as the managers have to manually merge the crucial information from various sources and process them further to the executives. The Business value of ERP is quite high as an ERP solution gives a real-time view of all the available data and solves all the issues in a best possible manner.
The most effective Management Science Model that can be implemented in the concerned company is the Linear Programming. The objective function or the cost function could be minimized or maximized subject to a certain number of constraints. This method is closely related to Linear Algebra and effectively uses inequalities rather than equalities to suggest the most apt solution for the problem. The second tool that can be incorporated is the Probabilistic Technique in which all the possible uncontrollable events associated with the Order and Production process are analyzed and at the same time the risks associated with the decisions made are also evaluated. This technique allows developing the most optimal solution for the problem. The adverse events that usually accompany the problems are highly minimized by this approach (Beal, 2017).
As the Orders are to be shipped to the Customers via different mediums hence another model known as the Networking Model could also be implemented. This model has the capability to solve the physical problems associated with the transportation processes such as delay in the shipment or loss of commodities during handling and shipment. The executives could use this technique to develop the most cost effective way of transporting the goods in the minimum possible time to the customers. The shortest critical path in the large projects is also determined using this technique through which the materials could be easily transported from the source to the destination nodes.
The existing Production Process of the Company is not compatible to deliver the orders in a quick manner and hence in order to pose a great competition to the existing local and foreign rivals, the company needs to automate most of its tasks. The case study suggests two possibilities. The Probabilistic Technique, while eliminating all the possible adverse situations, suggests that the first situation is the most apt one. In this situation, the computer-controlled production equipments would be purchased from Taiwan in which the expenditure would be $ 2.5 million and the cost savings would be $1 million per year. Although this plan is 55% satisfactory but it would be operative for 10 years. One of the reasons for using this plan is that the other proposed situation is simply an insurance plan which would be implemented only if the master plan fails. Hence, instead of investing in two plans at a single time, the company could concentrate its resources and energy on a single suitable plan only (Edvard, 2016).
To have a life-long implementation of the automation process, the company could implement the second situation in the last three years of the first plan. The second plan suggests collaboration with the local university which would be implemented in three years and will begin its operations as soon as the first plan ends. The projected performance of this plan is 75% and after 10 years when the employees become entirely comfortable with the automation process this plan can yield better lucrative results for the firm (Blue, 2013).
The simultaneous implementation of both the situations would only cause loss of resources and money for the firm as the failure chances of the first plan is quite low. Hence, side by side implementation of both the plans is not feasible. The business world only promotes such plans that are cost and time effective. The implementation of the situation second in the last three years of the previous implementation will allow the company to have a better return after a decade. Till this period, the employees will also become well acquainted with the automation process and will speedily adapt to the ongoing changes in the firm (Lydon, 2014).
Recommendations and Conclusion
The automation of the Order and Production Process is a tedious task and a company needs to implement this change process in a precise manner avoiding all possible adverse situation associated with the Change Implementation Process. The recommendations for the above Change Implementation process are:
CHEMS Pvt. has to effectively implement the automation process and for this the export of the computer-based equipments from Taiwan is the best choice. This could be followed by implementation of the second situation in the last three years of the previous implementation. The company could have a great edge over the other competitors in the market by this crucial step and it also has a tendency to minimize the time taken by the company to process a single order. Hence, more customers would be served at a single time.
References
Arena Solutions, 2017. Three Tips for Creating a Manufacturing Change Process That Works, Available at: https://www.arenasolutions.com/resources/articles/manufacturing-change-process/
Beal, V., 2017. ERP – enterprise resource planning, Available at: https://www.webopedia.com/TERM/E/ERP.html
Blue, B., 2013. Advantages and Disadvantages of Automation in Manufacturing, Available at: https://www.vista-industrial.com/blog/advantages-and-disadvantages-of-automation-in-manufacturing/
Bolin, J., 2016. Effective Change Order Management: Long International Inc, Available at: https://www.long-intl.com/articles/Long_Intl_Effective_Change_Order_Management.pdf
Bond, B., 2013. Strategies for Measuring Organization Change, Available at: https://www.smartpolicinginitiative.com/sites/all/files/SPI%20Measuring%20Change%20Webinar%20FINAL.pdf
Brown, S., 2008. Business Processes and Business Functions: a new way of looking at employment, Available at: https://www.bls.gov/mlr/2008/12/art3full.pdf
Edvard, 2016. 9 Reasons For Automation Of Manufacturing Processes, Available at: https://electrical-engineering-portal.com/9-reasons-for-automation-of-manufacturing-processes
Flynn, R. & Druzdzel, M., 2002. Decision Support Systems, Available at: https://www.pitt.edu/~druzdzel/psfiles/dss.pdf
Hiray, J., 2008. Management science modeling techniques, Available at: https://businessmanagement.wordpress.com/2008/02/08/management-science-modeling-techniques/
IES, 2017. Changing roles for senior managers, Available at: https://www.employment-studies.co.uk/report-summaries/report-summary-changing-roles-senior-managers
Lewis, M., 2017. 14 Ways to Reduce Materials & Cost of Goods Sold in Your Business, Available at: https://www.moneycrashers.com/reduce-materials-cost-goods-sold/
Lydon, B., 2014. Production line and machine upgrades, Available at: https://www.isa.org/intech/20140803/
Nguyen, T., 2014. 6 Ways to get Smart and Cut Manufacturing Costs, Available at: https://www.apriso.com/blog/2014/01/6-ways-to-get-smart-and-cut-manufacturing-costs/
Phil, 2015. Ten Tips on How to Measure Change Management Success, Available at: https://phil-makingchange.blogspot.in/2015/02/ten-tips-on-how-to-measure-change.html
Queensland Government, 2012. Change Management Plan: Workbook and Template, Available at: https://www.nrm.wa.gov.au/media/10528/change_management_plan_workbook_and_template.pdf
Ravichandran, N., 2017. Models in Management Science: Issues in Implementation, Available at: https://ideas.repec.org/p/iim/iimawp/wp02017.html
Redman, N., 2009. Responsibilities of senior management: IAEA, Available at: https://www-ns.iaea.org/downloads/ni/training/man-sys-mod4.pdf
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Steel, M., 2016. 6 Effective Ways to Improve Manufacturing Throughput, Available at: https://www.marlinwire.com/blog/improve-manufacturing-throughput
Team, S., 2016. Order Change Management (OCM), Available at: https://help.sap.com/saphelp_erp60_sp/helpdata/en/e0/ffb753128eb44ce10000000a174cb4/content.htm
Tearle, R., 2011. How to measure the soft areas in an organization, Available at: https://changedesignsportal.worldsecuresystems.com/public/organisation/change/qualitative-measures.html
Weiss, E., 2014. Living lean: how to save time and money by using principles of lean thinking in everyday situations, Available at: https://ideas.darden.virginia.edu/2014/06/living-lean-how-to-save-time-and-money-by-using-principles-of-lean-thinking-in-everyday-situations-2/
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