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1 IFAC MCPL 2007 The 4th International Federation of Automatic Control Conference on Management and Control of Production and Logistics September 27-30, Sibiu - Romania CONSTRUCTION OF CHANGE TRAJECTORIES FOR MANUFACTURING ENTERPRISE Yousra Ben Zaïda 1, Vincent Chapurlat 2, Didier Crestani 1 1 LIRMM, Université Montpellier 2, CNRS, 161, Rue Ada, Montpellier Cedex 5 - France benzaida@lirmm.fr crestani@lirmm.fr 2 Laboratoire de Génie Informatique et d'ingénierie de Production - LGI2P site EERIE de l Ecole des Mines d Alès, Parc Scientifique Georges Besse F30035 Nîmes Cedex 1, France Vincent.Chapulat@ema.fr Abstract: The problem of change management in very complex and unstable environment is still not often tackled, despite a real need from the industrial stakeholders. This article proposes a three-step change management aided decision approach. Firstly the enterprise is described using a systemic approach using the Sagace framework. Secondly, the state of the enterprise system is characterized and evaluated using three classes of performance indicators for enterprise control, adaptation and anticipation viewpoints. Finally modelling production management methods makes possible to build the change trajectories which, from state to state, lead to the desired performance objectives. This approach which is still in the development and evaluation phase is illustrated through a didactic example. Copyright 2007 IFAC Keywords: Change management, change trajectory, performance, decision-making. 1. INTRODUCTION Nowadays enterprises must anticipate and adapt permanently tailor their behaviours, their organisation and their functioning modes to chaotic changes in the economic and technological environment. Moreover, the enterprise complexity, which must now include organisational, social as well as technological aspects, drastically increases the difficulty of making good decisions. The management of change patterns is due to the shortage of operational tools (IMT, 2000) and conceptualized descriptions. Several studies, undertaken within a European TIME GUIDES project (Malhéné, 2000) and a French ADESI research action (Adesi, 2004) (Boucher et al., 2007) have shown that industrial stakeholders require operational methods and tools to facilitate building of their change projects. These studies underline the following points: Organisational factors (organisational inertia) and social factors (change resistance) are very important factors for the success of change. Industrial operators have a limited understanding about production change management methods. Industrial operators do not have a real strategic understanding of change. Their rationality is rooted in short-term decision. Industrial operators need to integrate a multidimensional view on firm performance. Industrial operators want to manage in an autonomous way their change projects. Managers still lack sound methods and tools to support complex decision processes and to integrate all dimensions of firm performances. This article proposes, in a production enterprise context, an open change management approach designed to explicitly link the enterprise system, change management or operational methods and performance indicators. The main works about change management in engineering sciences are then reviewed. Section 3 presents the general framework of the proposed approach. Then, the main steps concerning enterprise description, enterprise state estimation and change method modelling are explained in more detail. Section 6 gives, on an example of enterprise project building based on a simplified enterprise benchmark. Finally, the conclusion summarizes the originality of the proposed approach and highlights its main limitations. 2. STATE OF THE ART The enterprise change concept is based on the idea that there is a better state than the current one which must be reached via continuous or abrupt modifications in the structure and of behaviour of the enterprise (Délivré, 2004). Enterprise change management approaches differ mainly with respect to the chosen viewpoint. Each scientific domain focuses on some selected aspects of the enterprise, proposes its own concepts and develops its own methods and tools. 631
2 In engineering sciences the system control problem can be defined as the ability to dynamically decide on the right control inputs to be applied to a disturbed system to achieve some "desired behaviour". This "desired behaviour" can be described as a performance objective. This general definition can focus on the system enterprise. Then the change management problem can be addressed if the performance evolution problem rather than the problem of performance maintenance problem is considered. Considering the temporal horizon, three decision classes can be distinguished: strategic decisions defining long-term objectives and guidelines, tactical decisions concerning the structures and resources that will be applied to meet the strategic aims, and finally the operational decisions concerning "real time" adaptation. The short and middle term controls of the enterprise have been widely studied (Revelle, 2002). They mainly refer to the problem of performance maintenance. However, few works concern the problem of strategic control and the ability to assist in the construction of change projects. Two classes of change management methods can be distinguished. Many processing methods have been proposed over time to increase some aspects of enterprise performance (Revelle, 2002). They are more or less operational and generate a relatively brutal change. Some can be considered as a philosophy like the Kaisen approach. However this approach may call for more structured methods like the Just In Time (JIT) method. Finally the operational SMED method can be a part of the Just In Time method. Some recent works like (Siebenborn, 2005) (Mansar et al., 2005), based on feedback from industrial stakeholders, qualitatively evaluate their practical use. On the other hand, few works concern the problem of change process construction. In (Malhéné, 2000) a detailed formalization of the change process is proposed and integrated in the GIM methodology (Chen et al., 1997). However this theoretical work is actually disconnected to an automatic choice of operational change methods. In the limited area of strategic management of hospital wastes (Woolridge et al., 2004) propose an approach to guide the change process for performance enhancement. Siebenborn (Siebenborn, 2005) studied the change process and broke it down into three phases (preparation, action and stabilization) and developed an approach to guide resource assignment during the change process. However, this work does not help the user to choose change methods themselves. This criticism is also applied to project management methods (Bassetti, 2002). Although project management is the discipline of organizing and managing resources in such a way that these resources deliver all the work required to complete a project (within defined scope, time and cost constraints) it requires a decision-maker survey and an expert choice of methods to be applied. This short review highlights the gap between the construction of the change process and the choice of the change method to be implemented for this change process. 3. THE PROPOSED CHANGE MANAGEMENT APPROACH 3.1 The approach goal The previous sections have shown that industrial stakeholders have a limited understanding of change methods and that there is a gap between construction of the enterprise change process and the change methods implemented. The goal of the proposed approach is to develop a generic methodology explicitly connecting production change methods and the construction of possible change processes. Two main hypotheses must be put forward: It is possible to quantitatively or qualitatively estimate the impact of each change method on enterprise performance indicators. The strategic objectives can be derived into selected performance indicators impacted by some identified change methods. Then, by gradually identifying methods that can help to meet performance objectives, many change processes can be constructed and proposed to the user. 3.2 The approach main steps. Fig. 1 summarizes the proposed approach main steps. Fig. 1. Steps of the change management approach The proposed approach can de decomposed into 6 main steps: Step 1 describes the structural, functional and behavioural views of the enterprise using adapted modelling languages. 632
3 Step 2 characterises the initial state of the enterprise by estimating the performance indicators. Step 3 identifies the methods that can be used in the current state to help meet the performance objectives. Step 4 estimates the impact of the different applicable methods and the corresponding new generated states. Step 5 constructs the corresponding segments of the change process. Step 6 evaluates possible change processes once the process construction is finished. These different steps are detailed in the next sections. 3.3 Change trajectory construction The notion of change trajectory aims at modelling long-term enterprise change patterns. Firm trajectories can be described as transformations from one state to another (Mintzberg, 1983). In the management area, this trajectory concept is linked with evolutionist economic theory (Nelson et al., 1982). In engineering sciences some works have proposed to formalize the organisational life cycle in order to control enterprise change processes (GERAM, 1999), (Malhéné, 2000). In the present work each change process corresponds to an evolution (or a change) trajectory (Fig. 2). Fig. 2. Change trajectories Each situation is considered to be a performance stable state. A trajectory phase links two states. It corresponds to the application delay of an operational change method. Many possible trajectories can lead from the initial to the final state. Although the result is almost the same, the trajectories are not equivalent. Due to the inherent costs, time duration or resources availability. 4. ENTERPRISE DESCRIPTION The target enterprise must be modelled and its corresponding state estimated when developing a change project. 4.1 Enterprise modelling. In enterprise modelling many architectures and frameworks has been proposed for supporting the enterprise description tasks. Here the SAGACE framework has been chosen (Penalva, 1993). Within a systemic approach, it guides the enterprise system modelling on the basis of several points of view. Functional Strutural Behavioural Mission Resources Control Process Organization Adaptation Fig. 3. The SAGACE framework Scenario Configuration For each viewpoint, the following modelling languages were chosen: For the Mission the KAOS (Knowledge Acquisition in automated Specification) modelling language is used to describe strategic objectives and their breakdown. The enterprise Process and the corresponding execution Scenario are described by using effbd (enhanced Function Flow Block Diagram) modelling language. The Resources, their roles and associations are represented with UML Class diagrams. The links between the Resources and the Process representing the resources Organisation are specified with UML collaboration diagrams. The Configurations pattern is modelled by using UML states diagrams. For the operational viewpoint, causal loop diagrams are used to model the links between performance indicators and operational actions. This enterprise description generates an enterprise database reflecting the structural, functional and behavioural aspects. This description must be supplemented with an evaluation of the enterprise state. 4.2 Enterprise state definition and evaluation. The enterprise state is characterized by defining three specific performance indicators classes: The Control performance describes the classical performance viewpoint and is defined as the ability of the enterprise to fulfil its mission within a given timeframe, cost and quality s. The adaptation performance describes the ability of the enterprise to remain stable i.e. to become successful whatever may be its current state and its functioning mode despite some environmental disturbances. Reactivity and Innovation can be chosen here to reflect this performance class. The anticipation performance describes the ability of the enterprise to avoid loss of performance in case of organisation breakdown or behavioural problems. In this work, flexibility and resources redundancy can be chosen as indicators associated to this performance class. 633
4 Each of these performance dimensions must be hierarchically broken down into sub-s performance indicators. Two dimensions are considered for this breakdown. First, to cover all the enterprise aspects each performance viewpoint is considered through core, management and supporting processes (Schlickman, 2000). Secondly, for each identified process the Ishikawa diagram (Ishikawa, 1985) permits to identify the potential causes of performance alteration until operational indicators are found (Fig. 4). Management Processes Workforce Environment Supporting Processes Methods Core Business Processes Materials Machines Control Quality Costs Delay Adaptation Innovation Reactivity Ishikawa diagram Flexibility and Redundancy resources Fig.4. indicators trees Initially, all of these performance indicators can be evaluated qualitatively (stress ) or quantitatively (workload) from the enterprise description. Conversion laws are then drawn up to translate quantitative indicators into qualitative indicators consisting of seven qualification s ranging from disastrous to perfect. Aggregation laws are defined to compose the performance indicators from one to a higher one. These laws can be defined by an expert or established by using interviews and multicriteria techniques like the AHP method (Saaty, 1980). These laws must be consistent with the previous qualification process and must allow the user to find the same qualitative indicators. This performance indicators identification and evaluation approach generates a large number of performance indicators. Only few performance indicators must be chosen to determine the enterprise state. However, the three performance classes (control, adaptation, anticipation) must be represented in an enterprise state because they enable the user to differentiate several states with equivalent control performance. Parallel to the enterprise state evaluation, the strategic objectives are translated into performance indicators which describe the goal of the change. To decline these performance indicators, we use the ECOGRAI approach (Vallespir et al., 2004). 5. OPERATIONAL METHODS: MODELLING AND TRAJECTORY BUILDING PROCESS 5.1 Operational method An operational method allows to make evolving the enterprise performance from its current state to another one. About 72 operational methods have been identified from the most philosophical or generic ones such as JIT or Kaisen to the most specific ones such as Kanban, SMED or 5S. 5.2 Method's concepts. Regardless of the class of change method (e. g. high like B.P.R, structured like J.I.T. or operational like AMDEC) they can be assessed through a 3 dimensional view of method genericity, life cycle and performance impact (Fig. 5). The generic axis allows description of a method from a generic and conceptual to the partial and reusable, until the specific for a given enterprise. The life cycle axis describes the different achievement phases of a method. These phases are: Method appropriation by resources that is to say the step during ich the resources become able to understand this method during the project. Method adaptation allowing the resources to adapt the method to the enterprise and during which they become able to apply efficiently. Method implementation during which the method is effectively deployed. Finally, the performance impact axis translates the impact of a method on an enterprise control, adaptation and anticipation performance indicator. Fig. 5. Conceptual view of change methods 5.3 Change method modelling Operational method models takes into account three aspects through which a method must be considered before being applied during a project: these aspects are the following: Static aspects. Eligibility conditions must be always verified in every case: Conditions taking into account enterprise structure, function and/or behaviour. For example according to the Mintzberg enterprise organisational framework (Mintzberg, 1983), a BPR approach can only be used when the structure type of the enterprise is simple or a machine 634
5 bureaucracy (Siebenborn, 2005). The JIT method is applicable if the product batchscale is small or medium. Conditions based on performance objectives. Some method must be applied in order to increase the of specific and dedicated performance indicators without any change on other indicators. The main effects of an operational method are identified within a set of performance indicators. These indicators necessarily belong to the previously built performance indicator tree. A method is considered eligible if the fixed performance objectives belong to its set of performance indicators or if the set of performance indicators belong to the fixed performance objectives. Conditions on the change trajectory allowing determining the use of the current method is consistent with the previous methods used. A method is supposed to be compatible with any other method. However, there can be two constraints: the succession constraint when a method has to be used after another one, and the forbidden constraint when a method cannot be used after another one. Dynamic aspects. Once eligibly constraints have been verified, the operational method must be executed by using its life cycle (Fig. 5). A change method can consist of some other identified methods. The three phases of the method's life cycle are sequentially evaluated. Furthermore, within a life cycle phase each embedded method is supposed to be used without specific dynamic behavioural constraints. Consequently, all possible sequential combinations of the method are generated. This behaviour corresponds to an execution of the selected methods. However, the user, based on his expertise, can manage the change project development. Five other classes of dynamic behaviour are possible: SEQUENCE for a fixed sequential execution, CHOICE between eligible methods, ALTERNATIVE between possible change project (succession of operational methods), PARALLELISM for parallel methods executions and FORBIDDEN for forbidden method by another one. Note that if the appropriation and preparation phases always exist, they don't necessary have in fact a corresponding change method. Application aspects. The application phase enables to generate the final state resulting in the method execution. The corresponding operational method allows estimation of the new enterprise state by propagating the method effect on its performance indicator trees and then up to the corresponding performance indicators. Moreover, the operational method duration is empirically estimated according to benchmarks and expertise knowledge. The proposed operational method model is used during the trajectories building process and then for the project formalisation. From a boundary state (at the beginning the initial state) the applicable methods are identified. An applicable method starts and finishes with a boundary state. Between these extreme states, it generates all the ordinary states required to reach a new boundary state. The process is repeated until a boundary state meets the performance objectives within the imposed change project duration limit. 6. IMPLEMENTATION EXAMPLE The proposed change management approach is applied to a company producing ball bearings and rollers. This firm employs about 200 persons. It has average batch production. Concerning the enterprise initial state evaluation, the following indicators are estimated via the proposed qualitative performance estimation. The firm has an average control performance. The company achieves its mission with an average of quality, a quite good delay but its costs are high. Concerning the adaptation performance, the enterprise has an average reactivity. In recent years since few new products have been designed, it has only had an average innovation capacity. Finally, the firm has a good estimated anticipation performance. It is a quite flexible firm and has a high of shared skills. No critical resources have been identified. A strategic objective of the firm is to improve productivity and reduce stocks. Using the structured ECOGRAI approach (Vallespir et al., 2004) is derived this strategic objective into operational performance indicators. The operational objectives can thus be set to reduce stocks and develop closer relations with both, their costumers and suppliers. Stocks and relationships are indicators identified on our defined performance indicators trees. Many methods could impact the identified performance indicators. Among the different change trajectories figure 6 presents some change project that could influence the operational objectives. On the abscissa, we show time in week and on the ordinate the seven performance s from critical state to excellent. AMDEC, JIT, negotiations with suppliers and costumers, contracts with suppliers and/or costumers etc. are identified as being appropriate to meet the strategic objective. Their impacts on enterprise performance from the initial state are evaluated through the previously proposed performance indicator trees. Figure 6 shows, in the first column, that application of AMDEC method has a good impact on the control performance i.e. it reduces maintenance costs and decreases production delay of through a reduction in maintenance time and then the stocks. However, AMDEC does not have a significant impact on the anticipation and adaptation performances. AMDEC cannot be considered as an acceptable change project to fulfil all the objectives. A JIT approach is also eligible (second column of Fig.6). It consists of several other methods like AMDEC, SMED and Kanban. It has a better impact on control performance. In addition to the AMDEC impacts, SMED reduces the tool change delay and then overall production time. Furthermore Kanban reduces the communication times and costs. One of the main advantages of the JIT method is the important reduction on stocks. The combination of 635
6 impacts of all change methods increases the control performance from average to very good. A significant impact on the adaptation performance is also observed. JIT with its continuous flow production has a bad effect on the adaptation performance. It weakens the firm s reactivity and the adaptation performance drops from average to very bad. However, by applying JIT, the enterprise loses an important resource i.e. its stocks. Then the of anticipation performance drops from good to bad because management of the degraded production becomes more difficult. Good negotiation policies with both suppliers and costumers must be added to fulfil all of the strategic objectives (third column). The closer partnership with suppliers and costumers enhances the adaptation performance which rises from "very bad" to "average". The comparison of these different change projects clearly shows that their estimated duration is quite different. Moreover it highlights that if a JIT project substantially boosts performance, the price to pay is the loss of anticipation performance. Control performance Adaptation performance performance AMDEC The change trajectories of the firm JIT = AMDEC+ SMED + KANBAN week week week week week week week week week JIT + Negotiation Fig. 6. Change trajectories of the firm 8. CONCLUSION This paper proposes a new approach for enterprise change trajectory construction. This approach first involves modelling of the enterprise and its corresponding state. Secondly, a generic change method modelling is also proposed. The relevance of the detected trajectories depends on the accuracy of the expert change method eligibility rules, and on the capacity to correctly estimate the performance impact of a change method. However two criteria are still hard to evaluate i.e. the exact duration of a change project and its corresponding cost, since the action plan cannot be specified. This approach, which will integrate more than 70 change methods in the future, is still in the development and evaluation phases. Its genericity enables creation of an open tool with witch the performance indicator aggregation laws and change modelling methods can be easily modified to reflect the expertise. Despite these limitations, this is one of the few approaches which geared towards assisting industrial stakeholders in choosing of the enterprise change trajectories. REFERENCES ADESI Action Spécifique CNRS n 64, (2004), "ADESI, Aide à la Décision pour l Evolution socio-technique des Systèmes Industriels", Rapport de recherche, pp Bassetti A.L., (2002), "Gestion du changement, gestion de projet : convergence-divergence. Cas des risques en conception et mise en place d une organisation de management de l environnement, PhD, ENSAM, Paris, France. Boucher X., Crestani D., (2007), "Decision Support Systems issues in Enterprise Change Management", International Journal of Decision Systems, Vol. 5, pp Chen D., Vallespir B., Doumeingts G., (1997), "GRAI integrated methodology and its mapping onto generic enterprise reference architecture and methodology", Computer In Industry, Vol. 33, pp Delivré F.,(2004), "Le métier de coach", Edition d'organisation. GERAM, (1999), "GERAM: Generalized Enterprise Reference Architecture and Methodology" ISOTC184/SC5/WG1, N398. Ishikawa K.,(1985), What is Total Quality Control? The Japanese Way, Prentice-Hall. Malhéné N., (2000), "Gestion de processus d évolution des systèmes industriels conduite et méthode", PhD., Univ. Bordeaux 1, France. Mansar L.S., Reijirs H.A., (2005), Best Practices in Business Process Redesign :validation of redesign framework, Computers in Industry Vol.56, pp Minzberg H., (1983), Structure in Fives : Designing Effective Organisation, Prentice Hall. Nelson, R., Winter, S., (1982), "An evolutionary theory of economic change", Belknap Press (Ed.). Penalva J. M., (1993), "SAGACE method: the modelling of human designed systems", COMETT'93, Rome, Italie. Revelle J.B., (2002), "Manufacturing handbook of Best Pratices : An innovation, productivity and quality focus", APICS series on resource management, J.B. Revelle Editor, St. Lucie Press. Saaty, T. L., (1980), The Analytical Hierarchy Process, McGraw Hill : New-York. Schlickman J.J., (2003), "ISO Quality Management System Design", Artech House, Boston-London. Sieberborn T., (2005), "Une approche de formalisation du processus de changement dans l entreprise", PhD., Université de Savoie, France. Vallespir B., Ducq Y. Doumeingts G., (2004), Enterprise modelling and performance Part 1: Implementation of performance indicators, International Journal of Business Management, Vol. 1, n 2, pp Woolridge A., Morrissey A., Phillips P.S., (2005), The development of strategic and tactical tools, using systems analysis, for waste management in large complex organisations : a case study in UK healthcare waste, Resources, Conservation and Recycling, Vol. 44, pp
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