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Manufacturing Excellence: Merging and Consolidating Operations

By: C. Richard Panico
Posted: October 14, 2008, from the May 2006 issue of GCI Magazine.

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The control structure requires completion of activities—such as development and implementation of a communication plan, creation of a formal process to address and evaluate project scope changes quickly and efficiently, continual assessment of project risks and implementation of mitigation strategies, and accrual and documentation of costs and benefits as previously identified.

A cautionary note—proper identification of either positive or negative variances to scope, schedule and budget often is neglected by project teams due to employment of a sliding scale. The final planning and design documents must serve as static baselines, allowing thorough understanding and measurement of change. Not managing the consolidation initiative in this manner can present a missed opportunity to truly gauge execution performance and understand where corrective action or positive reinforcement can be applied.

The Human Element

As you work through the consolidation framework and complete the individual process steps, careful attention also must be provided to the second part of your approach—the management of organizational change.

Human nature provides a reflex to preserve your personal comfort, a comfort typically derived from a sense of control or knowing what lies ahead. Initially, stakeholders may not have a clear vision of what the future holds for them. Individual roles and responsibilities, personal logistics and work environments undoubtedly will change as the existing operations are merged. This can create a feeling of discomfort that must be sensitively managed throughout the project to avoid stakeholder bias, resistance and lack of engagement. The benefits of successfully managing the human element can include establishing focused support, high levels of individual contribution and constancy of purpose. The key considerations regarding managing the human element are listed below:

Leadership

Consistent leadership is an essential ingredient for success and an absolute requirement when consolidating operations. Merging organizations naturally are divided into the two sides of the consolidation, “us” and “them.” This creates specific loyalties, opinions and perceptions among stakeholders that may lead to conflict and distraction. Effective leadership will minimize these effects by objectively managing stakeholders and not allowing conflict or bias to undermine the project goals. This leadership also will build bridges between the two organizations, thus imparting a sprit of unity, as they will all now need to work as one.

Vision

Perhaps the most significant contributor to the fear of change is the fear of the unknown. Clarity can be achieved through the collaborative creation of a vision of the future, derived through execution of a structured process. Stakeholders can gain comfort and confidence as options are put to paper and supported by facts and analysis that they have been party to and understand.

Communication

Two particularly relevant aspects of good communication come to mind immediately. First, it is important to remember that one must manage the communications that are both sent and received. Open communications, those that flow freely to and from, are not a given in an inherently tumultuous situation where opinions are strong and often biased. A good leader must also be a good listener, adeptly extracting the knowledge and perspectives from the project team while confidently sharing information and direction.

The second issue regards confidentiality. Confidentiality is often an initial requirement on consolidation projects. It can be difficult to draw in all the resources that are needed to analyze and plan a complex consolidation, particularly when specific details cannot be communicated. In this case, difficult decisions must be made to appropriately include these resources or make educated assumptions regarding the required information. Swift communication is almost always best. Rumors and assumptions quickly will fill any void in information, and it is often more difficult to deal with rumors than to have been up front with the organization in the first place.

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