University of Aberdeen Business School

Course: BU555A | Managing Change Scott and Fyfe Ltd

The assignment is a case analysis and is a group assessment for the course, which counts
for 4 0 % of overall module mark. The due date for the assignment is 10th May 2024

The case study is of a local manufacturing organization which has global reach: Scott and
Fyfe Ltd.
This case has been written especially for this module in conjunction with the Operations
Director at Scott and Fyfe, Ross Melville.
The Task

First, read the attached case study on organizational change at Scott and Fyfe. Consult, as
relevant for the focus of your assignment, some of the further references provided. Write up
your responses to the following task:

Using stakeholder theory and other relevant course materials, consider which stakeholder
audiences might require an account of the change to be constructed. Choose two of these
audiences and discuss how and why the accounts for these audiences might differ (c 1500
words).

Additional Guidance

The assignment task is adapted from the exercise at the end of Chapter 15 of Beech and
Macintosh (2012). That chapter discusses and illustrates the tasks using the Oticon case
(found at the end of the book). There are plenty of copies of this book in the library.

The task requires you to do several things:

- Identify all of the stakeholders involved in the case

- Classify them according to a stakeholder theory framework of your choosing,
providing reasons for your choice of framework and for your classification of
stakeholders
- Devise an account of change for two of these stakeholders, structuring them
according to Beech and Macintosh’s discussion which we explored in tutorial 2
- Compare and critically evaluate the two accounts of change you have created. Are
they likely to convince the stakeholders or not?

You may use subheadings to indicate your response to each section, but this is not mandatory.

Word limit

The overall word limit is 1500 words, not including your list of references. The only firm limit is
the overall length and you will be penalised if your assignment is more than 10% over this
limit. Please note that appendices will not be marked as they are outwith the word count. If
you wish to include appendices then only do so for illustrative purposes. Please do not
include extra information in your appendix which is part of your substantive answer to the
question.
Further guidance

The Q&A workshop on 7th May 2024 will discuss and illustrate the coursework requirements.
In particular, we will make sure that we understand the concept of an ‘account of change’

Additional references
For resources on Stakeholder theory, draw on your studies on your degree programme to
date. There is material in Beech and Macintosh that you may use and in many other change
management textbooks.
Stakeholder Theory References:
Assudani, R and T Kloppenborg (2010) Managing Stakeholders for project management
success; An emergent model of stakeholders Journal of General Management 35 (3):67 –
80
Bourne, L and D H T Walker (2006) Visualising Stakeholder influence: Two Australian
examples Project Management Journal 37 (1):5 0 21
Jawahar, IM and G L. McLaughlin (2001) Toward a Descriptive Stakeholder Theory: An
Organizational Life Cycle Approach Author(s): The Academy of Management Review , 26
(3): 397-414
Mendelow, A. L., (1981) Environmental Scanning--The Impact of the Stakeholder Concept
ICIS 1981 Proceedings. 20.
 Course: BU555A | Managing Change

The Change Pipeline at Scott and Fyfe Ltd

Trevor Morrow

Please note that this case contains some commercially confidential information which
should not be disclosed beyond the module.

Background
Scott and Fyfe Ltd is an employee owned company based in Tayport, Fife. Founded in 1864
by Robert Scott and Hugh Fyfe as a linen works, it remains on the same site today. The
company has always produced woven fabric and during its lifetime it has transformed its
manufacturing processes to adapt to market demand. When the linen industry fell into
decline by the end of the C19th, the company moved into Jute weaving. Then, when the jute
trade eventually declined in the 1960s, the company moved into woven polypropylene
fabrics to make carpet underlay and flexible bulk containers for all kinds of industrial product.
By the 1990s it was the top supplier of Flexible Intermediate Bulk Containers (FIBCs, see fig
1) in Europe. It then expanded its production site to accommodate the manufacture of
innovative woven products, merging with Flemings Ltd, an expert in composite fabric
manufacture. The merged companies developed polymer composite fabrics, which knitted
and bonded together high-performance materials such as glass fibre, carbon fibre and
aramid for a range of industrial applications. These technical textiles are sold into a range of
markets: automotive, agricultural, industrial and renewables, and are now the sole outputs of
the Tayport manufacturing facility.

Innovation has always been at the heart of Scott and Fyfe’s

operations. To ensure it created new products and found new
markets for them, in 2010 the company worked with Glasgow
School of Art to create an innovation space in its production
facility. The space is colourful and well resourced with plenty
of collaborative tools for employees to use. This space
featured a ‘pod structure’ where each ‘pod’ was a mini
business unit focusing on a specific market. The pods used
proprietary innovation tools which enabled a new product idea
to be researched, developed, tested and launched into the
market as quickly as possible. The company has also innovated in its ownership structure.
Since 2012 it has been employee owned, with managers and employees owning shares in
the company, purchased through its Employee Benefits Trust. The Trust is then consulted
on and informed about business decisions.

Developing the pod approach required significant structural change within the organization.
The vision was to work collaboratively and cross functionally to respond to current market
challenges. Originally, the organization had centralised business functions, such as sales
and marketing, which worked across all of the market areas. Following the development of
the pod approach, the centralised business functions were decentralised to help each pod
when they required it. This meant that each pod had a dedicated multi-functional support
team at its disposal. Each business manager had to look after the customer base and
market area, working with their support team to identify innovative products. Higher value
investments in innovations were taken to the board.

Introducing our protagonist, Ross Melville

In 2021 the pod structure changed again with the arrival of new Production Manager Ross
Melville. Ross is a longstanding friend and supporter of MN4214. He was appointed as
Production manager at Scott and Fyfe in December 2021 from Dover Fuelling Solutions
(DFS) in Dundee. Thanks to Ross, MN4214 students visited the DFS factory on field trips to
understand how the company implemented continuous change. At DFS Ross oversaw the
continuous improvement of the site’s production lines, as the factory increased in capacity.
Throughout the DFS factory Ross implemented the tenets of Lean Production and Kaizen,
as well as organization-wide culture change and development. During this time he was
promoted from Warehouse Operations Manager to Supply Chain leader. He arrived at Scott
and Fyfe well equipped with skills, knowledge and experience in manufacturing excellence,
lean production, change management and health and safety. After just one year of his
tenure as Production Manager at Scott and Fyfe Ross was promoted to Operations Director.

In the first week of his appointment, the Managing Director of Scott and Fyfe tasked Ross to
help grow the business. Ross began to notice the opportunities for change, based on his
extensive experience at Dover Fuelling Solutions, as well as the change challenges
presenting themselves on the factory floor. These changes included renaming the ‘pods’ as
‘value streams’ to connect them more closely with business operations. The idea was to
transform the pods from idea testbeds outwith business operations, into value streams which
drove business growth by taking innovative products into new markets. At the time of his
appointment, a pipe fabric innovation pod was working on developing the company’s
agricultural pipe business (‘Agripipe’ for short) and pipe repair fabrics. By 2023 the company
was solely producing these two types of innovative pipes and pursuing its intended growth
strategy. This case study explores the change challenges involved in pursuing this strategy

Change challenges: Diagnosing and enacting change to pursue growth

In this section we explore the change challenges facing Scott and Fyfe as they sought to
grow their agricultural pipes and pipe repair fabrics business.

Agricultural pipes, or Agripipe

Agripipe is currently the mainstay of Scott and Fyfe’s revenue. The pipes are made on site
by extruding composite material into tape, weaving it together into a strong fabric which is
then formed into pipes. The pipes are sold to one customer, Netafim. Netafim is a global
company which sells compete agricultural irrigation systems. Scott and Fyfe are part of
Netafim’s global supply chain, providing the pipe hardware for them to supply on to their
customers.

The agripipe area of the production facility is organized into five production ‘cells’. Each cell
is responsible for a different part of the process. The first cell extrudes the plastic into tape;
the second mounts it into weaving machine (called beaming) and the remainder weave the
fabric and then convert it into pipes. Agripipe production output is measured by the number
of shipping containers filled with pipe in a month. At the time Ross joined the organization,
the output was 12 containers-worth per month. In order to grow the business to meet
Netafim’s demand, the directors requested this this be increased to 20 containers per month.
Diagnosing change 1: Labour plan, shift work and efficiency

Ross set about diagnosing what needed to change. He quickly realised that he needed to
understand production capacity per shift and the effectiveness of the machines to diagnose
what could be changed to achieve greater output. Data were gathered on the machine’s
performance on each of the cells and Ross created mathematical models to see what could
change. Having conducted root cause analysis of various problems and bottlenecks which
were found in the data, it appeared that output could be increased by increasing the number
of shifts per week and increasing the efficiency of the machines. The model was tweaked so,
hypothetically, Ross knew what impact each change would have on output.

The first change was to increase working hours. This meant introducing new shifts in the
working week and recruiting staff to work those shifts, rather than asking existing staff to
work longer. Originally, agripipe worked on a 6 shift – 24 hour pattern over 3 days.
Employees worked either a 12 hour day or night shift for three days per week and had the
rest of the week off, with the factory laying idle. With the new pattern, additional shifts on
Thursday, Friday and Sunday were put in place on the same basis. Shift patterns were
rotated over a three week period to ensure that each employee had a fair allocation of day
and night shifts.

Further, changes were needed in the first and second cells to improve machine efficiency.
Machines in the 1st cell extruded composite material into tape. It was found that the
machines could produce 120 meters of tape per minute. By running the machines more
quickly, output could be increased to 170 metres per minute without affecting quality.
Straight away this resulted in a circa 40% increase in output. In the second cell, where the
tape was woven into the fabric which made the pipes, inefficiencies were uncovered in the
time it took to load the machine (an activity called ‘beaming’). Employees had to assemble
1256 warp threads on the machine so that they could be woven. Again using root cause
analysis, a quicker way was found to mount the threads on to the machine.

Once these changes were implemented, the agripipe output increased and hit 21 shipping
containers per month. Ross realised, however, that sustaining this change was not just a
matter of numbers, the factory needed to be organized differently too.

Diagnosing change 2: Improving organizational structure

In the first week of his job, Ross was handed a very special company phone. This was the
phone on which the employees could contact him for information about their shifts, benefits,
annual leave and other employment matters. As soon as he switched it on, he was
inundated with calls and barely had time for anything else. It soon became apparent that he
was expected to line manage the 109 employees on the factory floor. There was no internal
structure in place, where, for example, a team leader or line manager could answer
employee queries.

Ross drew on his lean production knowledge to create an internal structure. He introduced
the idea of ‘tier accountability’, which comes from lean production philosophy. Tier
accountability creates bottom up reporting lines from production cell members to their team
leader, who then report to a value stream leader. Each tier of the structure was accountable
to the tier above and was expected to share not only problems that need solving but also
solutions and successes. In each section of the factory, 4 team leaders reported to the value
stream leader. Those two value stream leaders – one for agripipe and one for pipe repair –
reported to Ross. This was a vital part of diagnosing and understanding any ongoing issues
with machine efficiency, shift and labour patterns, as reporting lines and employee support
would ensure problems were surfaced right away and successes celebrated.

To create and fill these new roles, Ross selected people from each of the shifts to be trained
up into team leaders. Two value stream leaders were recruited externally. The employees
and their team leaders flourished under these new levels of responsibility. One colleague
‘Graham’ (a pseudonym), was promoted to team leader after 10 years as a machine
operator. Ross found that Graham readily drew on his tacit knowledge of how the machines
operated to deliver efficiencies. When faced with challenges, Graham always had the
solution to a problem, checked with Ross for approval and then went ahead with his solution,
which he found empowering.

Pipe repair

Pipe repair is the second value stream in Scott and Fyfe. The demand for the company’s
pipe repair products is still early in its growth phase, with it operating in this area for just five
years. Consistent and predictable demand for the products needs to be built over the
coming years, supported by capital expenditure on new machines to fuel this increased
demand. The order book for these products is full to the end of March 2023 and then new
opportunities will need to be sought.

Currently, the company supplies sewer pipe repair projects in different parts of the world on
an ad hoc basis. It has recently supplied projects on the Sydney Harbour Bridge and in a
major hospital in Johannesburg, South Africa. Given current controversies concerning
leaking water pipes, the water industry is potentially a huge growth area for this part of the
business. Inserting pipe repair fabric into a broken water pipe to repair a leak is hugely cost
effective compared to excavating the ground to repair the same pipe.

Pipe repair fabrics are made from a patented material of glass and polyester which is knitted
into tubes, rather than woven. Production cells first beam the material onto the machinery so
that it can be knitted, then it is knitted and eventually converted into tubing. When it is used,
the tubing is placed inside the broken pipe and expanded to fill it. It is then coated with resin
and cured with UV or air, sealing any leak. The pipe is produced in 120m lengths, but
kilometres worth are ordered for different projects.

Ross repeated his efficiency calculations for this value stream, assessing how much
capacity would need to be built to support growth in the sewerage and water markets. As
with the agripipe value stream, operations were modelled and assessed for their efficiency,
bottlenecks were identified and more labour hours were required. Labour planning and shift
patterns in this area are still in the original configuration, with 2 teams doing 6 shifts on 24
hours for three days. Eventually, 4 teams will cover 6 shifts over 24 hours on a three week
rotation. 40 new members of staff are required for this pattern, and the factory has so far
recruited 20. By far the main challenge for this value stream is to increase consistency in the
order book.

Enacting the shift change

The final piece of this change puzzle concerns how the changes to working hours and shift
patterns were enacted. Existing agripipe production employees were required to change
their working patterns from a three day week every week, to one which spanned six days
over a three week rotation. Many existing staff had been with the company for ten years or
more and would need to alter their work-life balance, family, caring, leisure and childcare
arrangements in order to accommodate this change. Ross realised that this was a lot to ask
of the employees, who needed to have certainty as to how work was to be organized in
future.

His approach to enacting this change involved securing staff support through consultation
and by communicating why the change needed to happen. One of the most obvious points
to make was that increasing the growth of the business would directly benefit the employees
who had an ownership stake in the company. Improved performance would mean that they
received a larger bonus at the end of the year. A less easy point to make was to highlight the
dangers to job security presented by not pursuing growth, which would result in falling
demand and therefore fewer jobs.

A key part of this process was for Ross to build trust and respect with the machine
operators. He achieved this in a number of ways. First, he made sure that he met with
everyone individually so that he could explain to them what was happening and so that he
could listen to them and respond to their concerns. He also spent Friday afternoons working
with the employees on the machines so that they could get to know him. In doing so he
could learn their jobs and understand the pressures they were facing. They respected him
for ‘rolling his sleeves up’ and getting involved. He also got to know some of the more
influential and experienced employees and asked them to act as gatekeepers so that they
could explain the change to others. This face to face approach was preferable to large
meetings in the company meeting space, which staff found intimidating and overly formal.
To his surprise Ross found that those who had been at the business longer were more
supportive rather than resistant. Many of those employees had witnessed the business go
through countless changes and so were used to the ups and downs and found change
easier to accept.

When Ross began this job, he thought Scott and Fyfe were just replacing a production
manager. He discovered the huge change challenge involved during his first week. This was
initially a shock, but he was able to proceed with success. [What follows is commercially
confidential: please do not disclose beyond the module] New change challenges
continue to arise, however. Netafim, the company’s irrigation pipe customer has just
predicted a reduction in revenue for 2023 which significantly drops the firm’s production
forecast. Unfortunately headcount may need to be reduced by 30 for the structure, staff and
shift pattern to remain strong.