Organisational Change in Dell Incorporated - Research Paper Example

Organisational Change in Dell Incorporated Which of the change models you have encountered could best be used to explain a major change in the organisation The primary goal of Dell is to become a market leader in the information technology industry. With this goal, it becomes apparent to the organization that we needed to change the way we conduct our business. In the hypercompetitive business environment we are operating in, we wanted to be recognized as a world class manufacturer. World class manufacturing (WCM) is regarded as manufacturing systems which demonstrates best industry practice. Accordingly, a world class manufacturer is a firm which displays excellence in key competitive points like quality, price, delivery speed, delivery reliability, flexibility and innovation. Its main feature is the utilization of a total quality management (TQM) approach, highly flexible and motivated workforce, Just-in-Time (JIT) manufacturing philosophy, and the pursuit of satisfying customers at a global level. The introduction of WCM system in Dell represents one of the major organisational changes in the history of the company. Currently, Dell is recognized for this unique business model which is very much different from the ones used by our competitors. This organisational change can be best described by the Total Quality Management and Lean Manufacturing Models. Consistent with the goal of a world class manufacturer, TQM denotes a set of management practices within the organization which are implemented to ensure the quality of products and services offered. The primary goal of TQM is the production of commodities which consistently meets or even exceeds customer requirements. With Dell, this means emphasis on process measurement and controls to pursue continuous improvement. However, TQM does not just involve the production system or processes of the company but embraces the whole operation of a manufacturing business. Implementing TQM involves modifying the whole organization as it has strong bearing on the culture, attitude, and organization of the company. TQM culture requires the unmatched quality in all aspects of the company's operations with things being done right first time, and defects and waste eradicated from operations. Important aspects of TQM include customer-driven quality, top management leadership and commitment, continuous improvement, fast response, actions based on facts, employee participation, and a TQM culture. On the other hand, Dell also put in place the Just-in-Time (JIT) manufacturing philosophy from Japan. This concept is attributed to the automaker Toyota. JIT is a consistent with the lean manufacturing philosophy of producing the necessary units, in the necessary quantities at the necessary time with the required quality. JIT is a lean manufacturing system which became an innovative approach for Dell to achieve excellence in the reduction or the total elimination of "wastes" which includes overproduction, unneeded inventory, defective products, and transport and waiting time. Thus, the JIT philosophy is an elimination of non-value adding activities in the company's supply chain to boost manufacturing efficiency, driving down cost, and ensuring maximum customer satisfaction by driving down prices of commodities. The shift to a leaner manufacturing system which prioritizes the elimination of the "wastes" in production necessitated the installation of the following essential elements and features to the manufacturing system: regular meetings of the workforce to discuss the company's practices, confront and solve problems; emphasis on consultation and cooperation (i.e. involving the workforce) rather than confrontation; modification of machinery to reduce setup time; reduction of buffer stock, exposition of problems, reveal bad practices; and elimination of the security blanket of stock. In order to show how the new manufacturing system supported by the principled of TQM and lean manufacturing works, we will look at the supply chain of Dell. Traditionally, personal computers were manufactured in large volumes, forwarded to distributors and were sold individually to customers. This supply chain became problematic as it requires a huge level of inventory and small set of configuration for customers. Dell introduced a new supply chain which rests on minimizing the costs of inventory and customization according to a client's specification. Dell employs a just-in-time inventory strategy which allows the movement of inputs only when a customer places an order. Table shows the flow of material in Dell's supply chain Figure 1. Dell's Supply Chain The company's supply chain begins when a customer places an order through telephone or online via the company's website. Dell processes the order by undertaking a financial evaluation (credit checking) and configuration evaluations (checking the feasibility of a specific technical configuration). After passing these two evaluations, the order is forwarded to the company's manufacturing plant in Austin, Texas for assembly. Dell's plant notifies the company's suppliers and request the components needed for the customer's specification. It should be noted that Dell takes care only of the CPUs assembly while monitors are directly outsourced from other suppliers. Delivery of components to Dell's manufacturing plant in Texas is relatively faster than its counterparts in the industry. It is amidst the fact that the company's suppliers are located in Southeast Asian countries and transportation time ranges from seven days utilizing air transportation to 30 days for water and ground. The transportation time is significantly reduced as Dell requires its suppliers to keep inventory on stock at Austin revolvers. These revolvers are small warehouses which are located within a few miles from Dell's manufacturing plant. Components are tested and assembled in Austin, Texas for around eight hours and delivered to the client not longer than five days after the receipt of order. After delivery, after sales support is offered by the customer service department for the company's clients. Armed with this supply chain, we at deal have carried out an organizational change geared at adding customer value as the product being manufactured move through its processes. Our adherence to the principles of TQM enabled us to make computer parts more efficiently by managing the quality of our products. It should be noted that each step in the production process is being checked in order to make sure that the quality meets the standard. This has significantly lessened the rework for our products as defects are already detected before our work-in-process inventory goes to the final manufacturing process. TQ M has instilled within the company a culture of excellence. All are employees are committed only to producing quality products and extending superior services. On the other hand, the employment of a lean manufacturing system enables us to cut cost and price more competitively. This organisational change equipped us with the ability of customizing our products and services to meet or even exceed customers' requirements. Dell has been very passionate in eliminating inefficiencies in the system. We believe that we should eradicate all the processes within the value chain which do not generate customer satisfaction. Also, we have established close strategic partnership with our suppliers in order to facilitate the free movement of materials and components to our manufacturing system. In Dell, we do things in which we have competitive advantage in while outsource in areas that we don't excel in. Our components are pre-assembled at our suppliers' plants in order to reduce assembly time. Shipping of our products has been entrusted to our logistics partners. Describe and discuss Human Resource Management /Human Resource Development initiatives that contributed to the effectiveness of the change. In any organisation, the value of the human resource can never be overstated. Dell believes that our employees determine the course of our organisation. In order for us to efficiently implement changes in our operations, we recognized that our workforce is our greatest strategic partner. In our quest to become a world class manufacturer, Dell has recognized that it can't get anywhere without changing the company culture, altering and modifying them in order to fit into the new business model. A flexible and highly motivated workforce is another essential feature of WCM. As I said earlier, WCM as opposed to the traditional manufacturing implements a totally innovative approach in operations which has a huge impact on employees. WCM needs a flexible workforce as these employees will not handle production in the traditional assembly line. WCM often requires teams which work together to finish an output. Specialization of jobs is often displaced in WCM replaced by "job enrichment." This new approach is intended to eliminate boredom and lessen employee dissatisfaction. Job enrichment is geared to expand the scope of the job with a greater variety of tasks, vertical in nature, that require self-sufficiency. Thus, in Dell, it is imperative that employees are flexible to take on a more responsibilities. Motivation is also increased as jobs are "enriched" and employees become are empowered. Motivation, in turn is a great factor in the success of WCM. In this new manufacturing approach, employees need to be motivated to excel in their job to produce the best job results. A highly flexible and motivated workforce results into a high quality product which is the main goal of WCM. Our human resource department is very instrumental in preparing our workforce for the organisational change. When the changes have been communicated to the each of the leaders in our functional areas, I remember the initiative shown by our VP for Human Resource. He said that he would come up with a program in order to orient the employees about the new strategy to be instituted. Our business organisation has always recognised the fact that our workforce is our strategic partners. By this, we mean that in any strategy that we undertake, we make sure that our employees are fully informed about the new system. This will enhance their commitment to the organisation as well as enable them to transform themselves into individuals who can help in the realisation Dell's goals. In our company, we make employees feel that they are always a part of the company's success and failure. Without their help and cooperation, no program will ever succeed. The human resource department has established different methods on how to inform employees about the new system. First, they have set an informal meeting with all the members of each different functional area. These assemblies become the venue of the introduction of the new strategy. The rationale of the new business model was highlighted as well as how it will affect their specific departments. Generally, the employees have welcomed the idea of a new strategy. It should be recalled that during that period, there is a very stringent competition in the computer industry. Employees make the employees hopeful. The human resource department allows employees to ask questions. Brochures containing important information about TQM and JIT were also given to each individual employee. The human resource recognised that employees working on the production of our products will be the ones to be significantly affected by the new changes. As such, the HR team devised more programs in order to prepare them. First, it should be noted that computer assembly was typically conducted in an assembly line. In this system, they specialise on doing only one function. In JIT and TQM, employees are not limited to job, but are also now involved in the whole process of assembling a computer. With this, employees need to be more flexible and knowledgeable. Thus, they needed to be trained in order for them to be able to specialise on more functions. The HR team, together with our production department has devised training programs for each of the employee. These rigorous trainings lasted for around six months. Understanding that production employees will also be working in groups, it is equally important that we look at their working relationships with their peers. In the traditional system, employees are more individualistic. However, with the new business model, employees will be assembling our products in teams. This necessitates the HR to come up with team-building seminars. These activities are very much welcomed by employees. They seemed glad that the alienation of working alone is now reduced as they will be interacting more with their colleagues. In the new system, our HR department knows that employees should be highly motivated. In any organisational change, employees as strategic partners should believe in the new system and should be willing to give their best for the realisation of the goals. As such, Dell should put in place an efficient motivational tool. The HR department undertook the task of analyzing the effectiveness of the current motivational system. During that time, monetary benefits are the primary motivation factors. However, the HR modified this approach as they recognise that employee satisfaction is not solely based on financial rewards. Thus, they have established a reward system in order to commend employees with their accomplishments. In this new approach, employees are acknowledged for their simple accomplishments in the form of awards. Sometimes the Hr also gives free movie tickets and vacation packages. Lastly, the HR also established more monitoring on the performance of the employees. After each quarter the actual performance of the employees are compared with the preset goals at the start of the period. All in all, the HR has been the essential catalyst in installing a new culture in the business organisation. It should be noted that TQM and JIT necessitates a transformation of the company culture. The HR helped in instilling a culture of excellence, a culture of doing things right the first time, a culture of satisfying customers, and a culture of doing the best that they can do. What were some of the barriers to organisational change and how were they managed In general, organisational changes are often met with skepticism, especially if the new system deviates from current industry practices. The institution of a new business model was expected to cause a stir among industry analyst. As a traded company, Dell was worried that the prices of its stock will suffer. If that happens, the company will not be capable of instituting changes as it will lack financial backup. Organisational changes going beyond the status quo. With Dell, it meant a revamp and financial resources. Unfortunately, our fears never materialized. The new business model has been warmly received by the business world. However, the problem really was how to put in place the changes which we have planned. For one, we don't exactly where to start. It was hard creating a timeline. Dell realised that changes should be made on a top-down approach. The company' executives pioneered the change in culture and communicated this to the lower level of the organisation. The main rationale of doing this is to show our employees our commitment in the change. Next lies in the issue of employee empowerment. In the traditional system, employees receive orders from their superiors. JIT and TQM empower employees by giving them the chance to make decisions in their own. However, it is hard to delineate the certain areas where employees can make decisions and where they can't. Also, even though employees warmly welcomed the idea of having no one closely supervising them, they often lack confidence in their abilities. In order to manage this, Dell trained its employees in order to instill them with more skills and build their confidence in themselves. With the enhancement of their capabilities, they become confident in their ability to work efficiently. References Dell, Inc 2006.Yahoo Finance. Retrieved 29 September 2006, from http://biz.yahoo.com/ic/13/13193.html Dell, Inc. 2006. The Official Website of Dell, Inc. 2006. 29 September 2006, from www.dell.com Beasley, J.E., 2005. Just-in-Time. Retrieved 29 September 2006, from http://people.brunel.ac.uk/mastjjb/jeb/or/jit.html Lean Manufacturing, 2005. Retrieved 29 September 2006, from http://members.aol.com/williamfla/jit.htm Thompson, A. Jr. and A.J. Strickland, 2002,Strategic Management. 3rd ed. New York McGraw-Hill. World Class Manufacturing, 2000. Retrieved 29 September 2006, from http://www.smthacker.co.uk/world_class_manufacturing.htm Read More