Manufacturers will invest in change

Posted on 30 May 2008 by The Manufacturer

Two thirds of manufacturers are investing in change programmes to increase their operational efficiency as a direct response to the credit crunch, according to a research by Celerant Consulting.

But while the investments continue, with 33 per cent intending to spend even more on change initiatives in the next twelve months, the same companies are only cautiously optimistic of success at best – 58% say just half or fewer of implementations in the last five years have had a positive impact.

This has left the industry exasperated at their fruitless efforts but maintaining that continued investment into efficiency is their best chance of productive business. Manufacturing bosses will focus on reducing costs in the immediate future, rather than increasing revenue, with 49 per cent in favour of this approach as opposed to 33 per cent against.

New organisational structures were also high priorities for those surveyed, as were addressing staff apathy and buy-in from local management.

Mike Atkinson, vice president of analysis at Celerant, said: “A slowdown always puts the question of ‘how do we respond?’ on the table – and frequently the answer becomes ‘we need to change’.

“Yet as leaders themselves admit, the majority of such change initiatives do not work.”

With this in mind, Atkinson warned companies against taking action simply for action’s sake. Initiatives aimed at heightened efficiency must be efficient themselves.
“In order to successfully deliver change, leaders need to inspire people with a sense of urgency, have a clearly communicated vision and plan and continually motivate staff. As change management becomes part of day-to-day management, only those leaders who can successfully execute it will survive and flourish,” he added.

The research was carried out on behalf of Celerant by the Economist Intelligence Unit. Across Europe and the US, 607 senior managers were interviewed, 87 of which work in the manufacturing sector. Firms typically registered over $500 million annual revenue (98 per cent). The statistics in this article relate only to the responses sourced from the manufacturing sector.