Question

Examples of approaches to change in companies

Answer 1

Change in companies takes place from time to time. In order to compete with others companies need to bring about necessary changes in their strategies, structures, systems, styles, etc. Few examples of approaches to change in companies are mentioned below:

a) Just-in -time approach: Toyota, a Japanese company implemented just-in-time approach when it was difficult for them to compete with American car manufacturers like ford after World War II. It was Taichii Ohno who was serving as an engineer at Toyota, who convinced the managers to implement this approach. He decided that instead of ordering & storing huge amount of heavy equipment & machinery, they should receive supplies the moment they were ready to be used. Therefore, they didn't have to waste any space, money or time for dealing with supplies. Also, they were able to get more cash on hand to deal with other opportunities, otherwise it would have been tied up in inventory, if they didn't implemented the just-in-time approach. This approach worked well for the betterment & success of the organization.

b) Six Sigma approach: Six Sigma approach aims at reducing defects & errors in all processes. It focuses on all the processes like manufacturing & transactional processes. In order to implement six sigma properly, an organization needs to test their processes again & again, so that they can achieve perfection. This approach was implemented by General Electric (GE) in 1995. Jack Welch took the decision to implement Six Sigma in GE. By implementing six sigma approach the company was able to save $10 billion within a period of five years. Also, the approach helped Welch to solve various issues involved easily. By properly managing the company with this approach, he was able to transform GE on a large scale. This approach helped the company to become huge & powerful on international level.

c) Changing the inventory: An organization can keep on adding to its product offerings in order to expand its customer base. Sticking to a single product only may not be beneficial, the organization can keep on adding new products to its inventory. For example, Amazon has always expanded its offerings in order to compete with others. This e-commerce company started its business only with selling books but with time it keep on adding new products. At present, it sells around 200 million products to its customers all over the world. Jeff Bezos, who is leading the company said that by changing constantly & putting its customers first, Amazon has been able to successfully run its operations all over the world.