Air Products and Chemicals Inc.: An Overview

Question:

Discuss About The Guides Essentials Of Change Management?

Innovation plays a significant role in influencing the business behaviour. It takes time to earn a multinational reputation. However, it all happens with a continuous highly extensive strategic planning. Nevertheless, the base for all such strategic planning is innovation largely. From opening up a new subsidiary centre to introducing a new product, all that happens when some innovative thoughts take place (Perdomo-Ortiz, Gonzalez-Benito and Galende 2009). The main purpose of this assignment is to analyse the business of “Air Products and Chemicals Inc.” from the perspectives of different parameters such as leadership style, accounting, information technology, people, process etc.

It is an American based company, whose primary business is to sell gases and chemicals to the different industries. It is headquartered in Allentown in the United States of America. The products have its prospect in the technology, healthcare, energy, industrial markets and food industry. The company supplies gases like nitrogen, oxygen, hydrogen, argon and carbon dioxide to such industries. It also supplies process gases, chemical intermediates and performance materials. Importantly, it has simultaneously worked with NASA for 50 years by supplying them liquid hydrogen that were used in every space launch related projects. The CSR and environmental performance of the company is one of few top multinational companies in and across the globe. There vision is to solve the toughest challenges of the customers. They have aligned their vision with the corporate strategy, which is why they have progressed much in technology (Airproducts.com 2017).   

Technology has become an important and integral asset of probably every business. However, it is equally important to understand that the selection of an appropriate technology is also very much important. This is not just the end but it also needs to be executed properly, so that, a maximum benefit can be attained (Venkatesh, Thong and Xu 2012). Air Products and Chemicals Inc. has actually justified the use of technology at the fullest of its capabilities. An appropriate use of technology can easily be understood with a fact that the company believes in three aspects such as people, process and technology. They follow a philosophy that signifies the importance of aligning the corporate vision with the organisational strategy. The vice president of the global supply chain believes that it was the alignment of the company’s vision with the organisational strategy, which has yielded success to it in the last five years. The company has succeeded in the past with a sheer use of technology. Technology has made them succeed for more than 15 years. However, they have efficient performance measuring capability, which has also encouraged them to feel the necessity of bringing change in the management. According to the VP of the global supply chain, the change was imperative for the company because with the use of technology it has entered into a more mature market where competition was high. They needed to bring in the required competitive skill in order to sustain the business performance. They have exactly done the same by bringing a significant change. Prior to change, the organisational system of the Air Products and Chemicals Inc was very complex, which used to take more than the normal time to conduct a work. For example, approximately 34 systems were used just to place a customer order. It was indeed done for best quality work but it was time consuming also (Airproducts.com 2017).

Technology and the Importance of an Appropriate Technology Selection

Initially, the company had no such set ups where technology could have any alignment with the process. It was actually aligned to the different functions. For example, to enter the data of customer order there were 34 systems. There was a separate budget system was assigned to a particular business unit. The management had eventually analysed the shortcomings in the strategy, which is why they globalised the business process with the implementation of SAP. The same level of business operation was required at the global level in order to align the process with the technology (Weske 2012). The divergence of business concept at the global platform then produced the necessity of having a more controlled system. The company has analysed that to incept the one single person for a single global process. This is exactly what the company has brought with the change. They have one single process owner at the global level (Airproducts.com 2017).

The change management is not a one-day process; it rather requires some through thought process. On a same note, the company has also realised that the required change would not just happen overnight. It has to follow a process. Moreover, the company had built up a process road map following which they brought the required changes. They started with their organisational vision, which is to “Deliver the Difference”. It then prepared a portfolio management work through which they differentiated and identified the business units with high values. After identifying the units, they constructed a growth strategy on focussing the four key market sectors. The main idea behind such plan was to become globalised specifically with the identified business units. The process journey is also incorporated with continuous improvement, knowledge sharing and e-business (Airproducts.com 2017).

The road map is well structured; however, it lacked in connectivity with the employees. They have not yet identified the difference between a global process and a global function. Global functions mean the execution of a function at a global level whereas global process means the execution of work process as per global standard for competitiveness. It is indeed very important for employees to be aligned with the change process. The required input at the lower level would then be attained at the maximum level (Avey, Wernsing and Luthans 2008).

The move to convert the global process into one company has produced an enterprise process blueprint. The modified supply chain does not have all the business process; however, it has all the owners of the different process. All the owners meet up with the global supply chain board (GSCB) on a quarterly basis to discuss on the proceedings, so that; it could add values to the corporate vision. To improve the efficiency of the business, Enterprise Resource Planning (ERP) solution was thought as a way out. They implemented ERP and set few performance indicators to identify the progress. Those three key performance indicators were constructing a competitive environment, driving efficiency & productivity and improving customer loyalty (Airproducts.com 2017).

The Importance of Aligning Corporate Vision with Organizational Strategy

The blueprint of the Air Products and Chemicals Inc is missing on few notes. An ideal blueprint should cover every complex operation within just a single architecture; however, the Air Products and Chemicals Inc do not have such arrangements in their architecture. They indeed have a meeting on a quarterly basis with the global supply chain board on improving the performance. However, a direct control on the entire operation could have produced much better results to the Air products and Chemicals Inc (Jonkers et al. 2006).

The improvement process, which Cantwell has identified, is focussed on the best strategy to yield maximum success. They had first shortlisted the top 50 executives to utilise the architecture design. All those executives would run the process on a global basis. They would have a meeting on quarterly basis where they would tally the improvement. They have different scorecards set for different process, which they discuss on their quarterly meeting. This indeed very systematic, which has yielded them success as well. They had given priorities to the process over function, which has also helped them identify the performance related gaps. One person is taking care of the one global process, which is hectic but good from the perspectives of organisational betterment (O’Dea 2014).    

Before discussing any benefits of the change process, it is worth mentioning that Cantwell has appropriately identified the right way to bring the change. Cantwell emphasised on process rather on functions. Cantwell had divided the operations into various global processes supervised by one especially dedicated person. All different executives would meet at one place on a quarterly basis with the global supply chain board. Performance monitoring within just three months of time is very effective indeed. This provides many opportunities to strengthen the process within a very short period of timeframe (Trkman 2010). Following are the list of benefits that Air Products and Chemicals Inc had with the change process (Airproducts.com 2017):

• The SAP journey has provided many benefits to the company such as the growth businesses have increased from 25 percent to 50 percent.
• The global business processes have been aligned to a single manager thereby providing a high penetration into the operation
• Customer loyalty has been improved by 15% post two years on the SAP implementation.
• They have been able to attach the business strategy with the corporate vision.
• It has proved that it can excel in both of his efficiency and effectiveness

The company had believed unlikely to the real world, which is evident in its approach for one company at global platform. This signifies that its waste of time and money to coordinate the global supply chain operation. They rather believed in managing the global supply chain by aligning this to a single executive of the company. Following are some of the enablers o successful process change (Burch 2010):

• Architecture design to form one company that has global process
• Standardising the business process using the SAP despite the facts that there can be differences in different respect at the local place such as the difference in terms of language
• Designing a single global SAP system to experience a universal benefit

The Air Chemicals and Products Inc. has identified that it is important to use both the technology and the process at the same time. They wanted to focus more on the process rather than on the functions. For such reasons only, they even went ahead to become a global process. However, they had also believed that technology is an important segment of their company, which can never be compromised. This is why they constructed strategies to facilitate the change while at the same time, they had utilised SAP at its fullest of capabilities. They actually designed an architecture using the SAP technology to strengthen the bonding between different global processes. They used SAP to enhance their efficiency and the customer’s loyalty in them. The enterprise design did not cover the entire shortlisted executives; however, it gave them a realisation of importance of all the executives in the change process. The architectural design had inspired Cantwell, which is also evident in the quarterly meeting with all the executive of different process. It helped the global supply chain board to have a direct control on all the executive level processes (Grant 2016).

The Need for Change Management

SAP has played an utmost role in guiding the Air Products and Chemicals Inc strategy change. The process change that happened in the company was just the effect of the enterprise design management of change (EDMOC). It was indeed critical in the change management process of the company. EDMOC has helped the company in staying with the technology while undergoing the change process. It has played various following roles in the change management process of the company (Airproducts.com 2017):

• Process managers (PMs)
• Enterprise design owners (EDOs)
• Global process owners (GPOs)
• Executive process owners (EPOs)

The IT related strategy of the company was then to categorise the four important sectors of the different required contributions. EDOs are those who take care of architecture, which is of high use in the change process. They do also take care of the change process; however, they do not alone make decisions. They take prior permission before making any necessary change. The global IT structure of the company is divided into four components such as the process managers, enterprise design managers, global process owners and the executive process owners. They have strategically categorised the different works to provide them a maximum exploration from all the executives (Hooper, Coughlan and Mullen 2008).  

An enterprise design is a process that facilitates the change process and provides an utmost control on the operation. SAP is a systematic process that uses few IT tools inbuilt in it. The first stage of it facilitates the making of request by any employee. The request is then discussed in between the different assigned EDOs specifically for the architecture. After the discussion is over, it is then entered into Management of Change (MOC) tool. The number of requests is then checked to identify the request that needs priority. The identified priority based requests is then implemented to get the desired results (Bernus, Nemes and Schmidt 2012).

The performance of the change process needs to be monitored and measured in order to attain the desired results. The Air Products and Chemicals Inc. had realised the importance of such works, which is why they had planned four steps of performance monitoring that are as follows (Airproducts.com 2017):

• Identifying the processes
• Assigning all the processes to its deserving owners
• Then measuring the performance of the process based on set performance indicators
• Improving the process with the help of set metrics

The set metrics further follows few steps such as connection, presentation, collection and action. Connection covers the connectivity of all the works with the set metrics. After the connectivity is developed, it is now the time to collect all the data on the performances. The collected data would then be presented on the dashboard of the SAP, so that, it could be visible to all. Lastly, actions would be taken accordingly in order to attain a maximum output of the planned process. It is indeed a very systematic and a powerful plan that the Air Products Company has constructed (Neely, Gregory and Platts 2005).

The Change Process and Implementation of SAP

Change management fails to accomplish if it does not get the cooperating hands of employees. Skills and professionalism are the two keys, which help in the change management process. It is indeed very important to motivate employees and to help them connect to the change management process. Nevertheless, a change management process is not an automated process. It rather requires the supports from the various corners of the management. On the other hand, there can arise multiple issues with the people such as lack of connectivity, less on motivation, incompatible work related skills etc (Loorbach 2007). The Air Products and Chemicals Inc. have successfully managed its people in the change management process. Their vision is to deliver the difference, which is why they put high focus on their workforce.

Change management process needs a strategic planning before implementing any changes. Without having such plan, the change might head to nowhere. It needs to have a clear vision, which means the change management should have a clear target. Change management is a long and a continuous process that needs supports from powerful strategies and extensive technologies. It also needs supports of motivated and connected professionals (Hamel 2006). The Air Products Company has produced a very significant example of a change management. They have used the following strategies for change management:

• Defining the opportunity
• Creating a shared vision for future
• Defining the work
• Building up supports and commitments
• Implementation, monitoring and rectification action
• Sustenance with the derived results

Performance appraisal is a process that helps the management in appraising the basic pay of the individual. The appraisal is done after assessing the performance of individual employee. Performance appraisal is a good way to motivate employees. It also encourages the employees for their development as professionals (Kuvaas 2006). Air Products gives high values to the development process. It helps their employees on how to groom their career in the organisation. It also encourages employees for the performance-based appraisals. This has also helped the company in getting a healthy support, which was utterly needed for the required change management process.

Learning strategy is another very important aspect of a change management process that needs a serious thought process making for it. Learning strategy should be more aligned to the set organisational vision. This would help the process go in a right direction (Chamot 2005). Air Products has well analysed the importance of it before they went for a change process. This is why they moved from a decentralised to a consistent approach. Realising the importance of a proper learning strategy, they infused the following strategies to make it appropriate the learning strategy in the organisation (Airproducts.com 2017):

• They realised the requirements to have an owned university of the Air Products Company, which is why they deployed it and used it
• They had then focussed on improving the ability to generate and find explicit knowledge
• They have also developed the skills and produced the tacit form of knowledge, which is one of the most challenging of all the strategies

Benefits of the Change Process

Conclusion

Air Products and Chemicals Inc. is one of few companies, which has identified the requirement of change management process in the organisation. Not only this, they have also identified the right way to head for. They developed their workforce through development program, so that, they remain connected to the change management process till the end. They also structured into a simpler but powerful structure. They used the IT tools to its perfection, which is evident in their enterprise designing with the help of SAP technology. They not only moved for change but also brought every terms alive, which are important for change management such as process blueprint. They kept on following the process improvement road map till the end of the change management. They regularly monitored and measured the performance of every single global manager.

References

Airproducts.com. 2017. Air Products accounting Major Company Restructuring. [online] Available at: https://www.airproducts.com/Company/news-center/2014/09/0918-air-products-announces-major-company-restructuring.aspx [Accessed 12 Sep. 2017].

Airproducts.com. 2017. Products. [online] Available at: https://www.airproducts.com/products/overview.aspx [Accessed 12 Sep. 2017].

Avey, J.B., Wernsing, T.S. and Luthans, F., 2008. Can positive employees help positive organizational change? Impact of psychological capital and emotions on relevant attitudes and behaviors. The journal of applied behavioral science, 44(1), pp.48-70.

Bernus, P., Nemes, L. and Schmidt, G.J. eds., 2012. Handbook on enterprise architecture. Springer Science & Business Media.

Burch, S., 2010. Transforming barriers into enablers of action on climate change: insights from three municipal case studies in British Columbia, Canada. Global Environmental Change, 20(2), pp.287-297.

Chamot, A.U., 2005. Language learning strategy instruction: Current issues and research. Annual review of applied linguistics, 25, pp.112-130.

Grant, R.M., 2016. Contemporary Strategy Analysis Text Only. John Wiley & Sons.

Hamel, G., 2006. The why, what, and how of management innovation. Harvard business review, 84(2), p.72.

Hooper, D., Coughlan, J. and Mullen, M., 2008. Structural equation modelling: Guidelines for determining marketing fit. Articles, p.2.

Jonkers, H., Lankhorst, M.M., ter Doest, H.W., Arbab, F., Bosma, H. and Wieringa, R.J., 2006. Enterprise architecture: Management tool and blueprint for the organisation. Information Systems Frontiers, 8(2), pp.63-66.

Kuvaas, B., 2006. Performance appraisal satisfaction and employee outcomes: mediating and moderating roles of work motivation. The International Journal of Human Resource Management, 17(3), pp.504-522.

Loorbach, D., 2007. Transition management. New mode of governance for sustainable development. Utrecht: International Books.

Neely, A., Gregory, M. and Platts, K., 2005. Performance measurement system design: A literature review and research agenda. International journal of operations & production management, 25(12), pp.1228-1263.

O’Dea, M., 2014. Process improvement.

Perdomo-Ortiz, J., Gonzalez-Benito, J. and Galende, J., 2009. The intervening effect of business innovation capability on the relationship between Total Quality Management and technological innovation. International Journal of Production Research, 47(18), pp.5087-5107.

Trkman, P., 2010. The critical success factors of business process management. International journal of information management, 30(2), pp.125-134.

Venkatesh, V., Thong, J.Y. and Xu, X., 2012. Consumer acceptance and use of information technology: extending the unified theory of acceptance and use of technology.

Weske, M., 2012. Business process management architectures. In Business Process Management (pp. 333-371). Springer Berlin Heidel