Why Do Manufacturing Businesses Resist Change?


Navigating the Inherent Resistance to Change in manufacturing requires a pragmatic and structured approach. This blog examines the multi-layered resistance when implementing new systems and processes, exposing psychological, operational, and strategic challenges. Gain insights into managing the transformation effectively. From addressing initial denial to overcoming personal fears, we guide you through each layer of resistance, equipping you with the knowledge to lead your organization toward growth and innovation.

Credit is given to Dr. Eli Goldratt for the Layers of Resistance (LoR).


Layer Zero: Denial

In the day-to-day operations of manufacturing, change is often viewed with skepticism. Take George, the Operations Manager, who has faithfully followed established procedures for years. His initial reaction to new software is a firm “Why change? We are doing just fine.” It’s a typical response rooted in comfort with the status quo.

This layer is defined by a reluctance to deviate from everything that worked in the past. Yet, when faced with concrete signs of market share loss and performance issues, there’s an acknowledgment that change might be necessary.

Recognizing the need to adapt is the first step in overcoming resistance.

The environment has changed, and so should we.

Layer One: Identification

Confronted by the issues head-on, George recognizes that the existing systems can’t manage the increasing order volumes. The situation is critical, with workflows clogged and deliveries consistently late.

The problems are evident at this stage: operations have become unstable due to a lack of capacity everywhere. The dilemma is between maintaining lean operations (LEAN and AGILE methodologies have trimmed the fat and the cushion), which places risks on customer satisfaction; however, adding capacity is viewed as increased costs. It’s about identifying the core issues impeding performance and seeking a resolution.

Conflict: Add Capacity to be a Reliable Supplier vs. Cut Cost to be A Low-cost Supplier.

Layer Two: Solution Direction

A workshop brings a revelation for George. The solution isn’t about balancing resources and capacity but maximizing flow by managing operational constraints and aligning all efforts accordingly. Recognizing and subordinating to the resource capacity limitations is the key.

This strategic realization sets the direction for change. It’s about understanding the assumptions that all resources need to be elevated and not just a critical few. Recognizing and managing flow according to capacity is required to improve lead times, ensure timely delivery, and deliver quick results with limited adjustment.

Layer Three: Value

The decision-making process inevitably involves a cost-benefit analysis. George has to consider whether the disruption and cost of implementing new systems are justified by the potential gains in efficiency and market position.

The conclusion is that shorter, reliable lead times translate to increased Gross Margin with a significant increase in cost – the value of change justifies the investment.

Layer Four: Risk

With every proposed change comes associated risks. Doubts arise, such as the hesitation around new technology and its impact on employment.

George realizes that shifting how departments are measured and operate is essential to mitigate these risks. Rather than rewarding performance at the departmental level, a company-wide and mutually supporting reward system should be introduced. With increased sales, change becomes an opportunity for improvement that involves every team member, easing fears and fostering a collaborative approach to overcoming challenges.

Layer Five: Addressing Physical Obstacles

The next hurdle is the practical aspect of change: new software installation, training needs, and resource allocation. These tangible challenges must be addressed with a practical implementation plan.

This requires a detailed implementation plan involving input from all relevant experts. The opportunity for employees to participate in the design of the changes needed in their areas. This plan should include the steps, timelines, and responsibilities required to transition smoothly.

Layer Six: Personal Fear

The final layer deals with personal concerns, like those of Lisa, the senior accountant, who worries about redundancy due to automation of her skills.

Addressing personal fears involves clear communication and training emphasizing enhancing job roles rather than replacement. It’s about ensuring that each person sees a place for themselves in the company’s future.

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