Organizational Change Management and Culture: Keys to lasting, sustainable cost improvement

This is an excerpt of the original article. It was written for the July-August 2019 edition of Supply Chain Management Review. The full article is available to current subscribers.

July-August 2019

If you’re a long-time reader of Supply Chain Management Review, you’re familiar with Larry Lapide’s “Insights” column. Typically, Larry is writing about the many facets of planning, but occasionally, he takes on a provocative topic. One year, he questioned whether it was necessary to be a Top 25 supply chain leader, especially if in your industry, good enough gets the job done.

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There is no shortage of companies implementing new technologies, overhauling their processes or using tools such as Lean Six Sigma (LSS) and continuous improvement (CI) to gain a competitive edge. Not everyone gets it right—in fact, McKinsey & Co indicate, “the reported failure rate of large-scale change programs in the corporate world has hovered around 70% for many years.” What differentiates those who run ahead of the pack and those who end up no better off post-implementation? In our view, it is the change management process that effectively creates a culture that fosters a new way of doing business supported by tools and technology.

After all, tools, technology and processes don’t make change—people do. Organizational change management (OCM) is the roadmap that details all of the elements that must be considered and addressed to make the transition successful. The roadmap includes (but is not limited to) such things as the communication plan, potential changes in compensation, recruiting, training and performance evaluation. It considers the impacts on customers and suppliers in addition to other company functions. In the following pages, we’ll profile supply chain leaders who successfully implemented supply chain initiatives such as Lean Six Sigma and continuous improvement, and include the lessons learned from their projects.

Case study: Lawson Products

Continuous improvement

Founded in 1952 and based in Chicago, Lawson Products is a distributor of maintenance and repair supplies servicing customers in all 50 states, Puerto Rico, Canada, Mexico and the Caribbean. About five years ago the culture was characteristic of a company built by entrepreneurs with independent sales agents—lots of non-standard procedures and non-value-added work. The company had been through an attempt to implement Lean processes in the past, but it never gained traction and when it came time to implement a new ERP system, Lean was left behind.

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