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Implementing a Successful CMS Program:
Understanding CorporateCulture and Change Management
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AJ BlessGlobal Marketing ManagerCLM - Rinchem Company, [email protected]
Preston StarkDirectorHisco [email protected]
Whether you develop an internally or externally supported chemical management program, key characteristics are the same:
Challenges to improvement
• Single process owner
• Enhanced gate keeping at point of entry
• Robust and integrated IT systems across the lifecycle if the material
• Understanding and acceptance of the total cost of ownership
All of which require:
• Coordination across multiple departments
• Total cost accounting
• IT integration and capability to track chemical use
• Investment of additional resources (staff, IT systems, and performance tracking)
…major changes from business as usual
• It is a paradigm shift in the approach to supplying chemicals and related services
• It is a cultural change in the way suppliers are received into the manufacturing team
What is unique about introducing CMS?
Three important components to evaluate needs and opportunities for improving chemical management:
1. Self assessment of the company culture towards change
2. Evaluate the feasibility of CMS using quick indicators
3. Develop the business case for improving chemical management
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Implications for introducing and implementing
a CMS program
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Arms length adversarial bid relationship Supplier partnerships
Customer is expert Outsourced expertise is embraced
Tough times require cost reduction Tough times require expertise
Slow to change History of change management
Focus is on acquisition cost Concern for provider profitability
More Difficult Easier
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Arms length adversarial bid relationship Supplier partnerships
Customer is expert Outsourced expertise is embraced
Tough times require cost reduction Tough times require expertise
• How many vendors does my company use in each of the following departments:o Operationso ITo EHSo Procurement
• Does my company currently outsource any data or materials management activities? If so, why?
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Slow to change History of change management
• When was the last time my department worked with the [Procurement, EHS, Material Management, IT] Department?
• What is that relationship like?
• What would I need to do to get them engaged?
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Focus is on acquisition cost Concern for provider profitability
• Is the main objective of this initiative to reduce per-unit price of materials or system cost?
• What factors, other than item price, are we willing to consider as part of the decision-making process?
• Have we identified key areas for improvement in our chemical management system? (e.g. transportation, logistics, IT, inventory management)
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More Difficult Easier
How do we forge ahead?• What is the best facility to test this concept?• Do we need more upper management support?• How do we get [xyz] department more engaged? • Based on the savings that will be counted, where should we
focus our efforts in collecting baseline information?
Where does my company fall on this spectrum?
Summary: key indicator data (quantitative)
Total annual chemical spend
Total number of chemical products
Number of purchasing transactions # of PO’s
# of MSDSs
Annual hazardous waste costs
Waste collection, analysis, and hauling costs
Summary: key indicator data (qualitative)Qualitative Indicator Cost Risk Regulatory
Preparedness Cost /Chem Transparency
How hard was it to identify your company’s chemical spend?
Can chemicals be purchased on Pcards?
Total number of chemical suppliers
# of data systems e.g. ERP/financial, inventory mgmt, EHS, MSDS, waste mgmt
# of FTE’s that touch chemicals
List of contractors and contract values e.g. data mgmt, water treatment, gas vendors, waste collection, waste haulers, consulting firms, etc.
Can the company identify chemicals embodied in its products?
• Customer stakeholders must be considered
• Program should have buy-in on the front end and at all levels
• Identify and Share
o Drivers
o Priorities
o Goals
• Cost Assessment
o Item price only?
o Item price and use-volume?
o Total cost is accepted?
o Internal costs and total cost is accepted?12
• Does the level of services and support match an acceptable program cost?
• Does the total of products and/or numbers of products justify a program?
• Is there urgency to act?
• Is there commitment throughout the company?
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Based on a customer’s self-assessment, a program can be rapidly implemented that is based on capabilities and mutually developed with the cost offset by the value.
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Leading ChangeThe eight-stage process of creating major change
1. Establishing a sense of urgency
2. Creating the guiding coalition
3. Developing a vision and strategy
4. Communicating the change vision
5. Empowering broad-based action
6. Generating short-term wins
7. Consolidating gains and producing more change
8. Anchoring new approaches in the culture
15Leading Change - Kotter
Establishing a Sense of Urgency
• Examining the market & competitive realities
• Identifying & discussing crises, potential crises or major opportunities
• Creates impetus to move employees from their comfort zone
• Key item that allowed organizations to implement CMS successfully
Leading Change - Kotter
Choose a Change Agent Which person in the organization is the “go to” person to
resolve implementation issues and keep the ship on course
Should come from the highest level possible in the organization
Leading Change - Kotter
Establish a Guiding Coalition
• Change agent alone cannot sustain the necessary culture change
• Key to the transformation process is to have a cohesive team guiding the change
• Opportunity to discuss & resolve issues in a supportive & open environment
• Must agree to support one another publicly & resolve disagreements privately
Leading Change - Kotter
Vision• Develop a near-term & long-term vision of the future state
Create a mental image of what the plant will look like
– Clear, concise & simple
– Can be explained in less than five minutes
– Show how it improves situation for all stakeholders
Where the organization should be in:
– Three months
– Six months
– One year
– Three years
May require benchmarking trips for key managers
Communicating the Change Vision• Communicate that vision to everyone at your organization
• How the changes impact them individually
o Physically
o Mentally
o Financially
Use visual devices to show:
o The new plant layout
o Cell boards
o Performance indicators
o Model cell
Leading Change - Kotter
Empowering Broad-Based Action
• Remove structural barriers
• Provide needed training
• Aligning systems to the vision
• Deal with troublesome managers & supervisors – cut the tail
• Effectively tap an enormous source of power
Leading Change - Kotter
Transformation Plan
Ending – leave the past behind
How will the employees behavior & attitudes need to change?
Sell the problem to them
Why there is a need to change?
Create an urgency
Transformation Plan
Neutral zone – Transition period
Anxiety rises & motivation falls
Absenteeism rises & productivity falls
Old weaknesses & past resentments resurface
Personnel are overloaded & turnover increases
People become polarized
The organization is vulnerable
Transformation Plan
• New beginning – CMS Implementation
o Explain the purpose
o Communicate the vision
o Work the plan & revise as necessary
o Involve the people
• Implement the plan developed from the gap analysis
Transformation PlanNew beginning – CMS Implementation
Understand the reasons for resistance
• Loss
• Loss of control
• Uncertainty
• Lack of information
• Too different
• Loss of “face”
• Insufficient knowledge
• Ripple effects
• Personal loss
• More work
• Past resentment
Generating Short-Term Wins• Ensure quick successes
o People are reassured
o Restores morale & increases confidence
• Celebrate success
o Mark & celebrate the ending of the old system
o Mark & celebrate the beginning of the new beginning
• Celebrate early & often to:
o Recognize early successes
o Reinforce desired behaviors
o Remind people of the value of the new beginning
Leading Change - Kotter
Consolidating Gains & Producing More Change
• Use increased credibility to change all systems, structures, & policies that do not fit together & do not fit the transformation vision
• Hire, promote & develop people who can implement the change vision
• Reinvigorate the process with new projects, themes & change agents
Leading Change - Kotter
Anchoring New Approaches in the Culture
• Creating better performance through:
o Customer & productivity oriented behavior
o More & better leadership
o More effective management
• Articulate the connections between new behaviors & organizational success
• Develop means to ensure leadership development & succession
Leading Change - Kotter
