Faculty of Engineering Project: Change Management at Millat Tractor

This project report analyzes change management strategies at Millat Tractor Limited (MLT) in Pakistan, focusing on the implementation of new technology in its production and assembly plants. The report begins with an introduction to MLT, its history, and its market position, followed by a sector analysis using SWOT, BCG Matrix, and Porter's Five Forces models. It then provides a detailed company background, including financial performance, market share, and product overview, which includes tractors, industrial products, and agriculture equipment. The core of the report addresses the current change issue: the need to update the oldest technology. It details a ten-step change management process for successful technology implementation, emphasizing communication, training, and continuous improvement. The report also suggests strategies like using software simulations and managing expectations to facilitate a smoother transition. The project concludes with an assessment of how MLT can better manage the change, offering insights into overcoming challenges and ensuring the successful integration of new technologies.

FACULTY OF ENGINEERING, ENVIRONMENT & COMPUTING
MSC ENGINEERING PROJECT MANAGEMENT
Change Management in Millat
Tractor Limited - Pakistan
7059MAA Change Management
Lecturer: Dr. Richard Anderson
Submitted by
MUHAMMAD HAMZA
Student ID: 10478491

Introduction
Millat Tractors Limited (MLT) was build up in 1964. It was established to
introduce & market the Massey Ferguson tractors in Pakistan. The first assembly
plant to assemble imported tractors in a semi knocked condition was set up in
1967. In 1972, it was nationalized under the Economic Reforms Order to start up
the marketing and assembling of tractors in favor of Pakistan Tractors Corporation
(PTC). In 1992, the company was commercialized. The employees joined hands
took over the company’s management by wining an open bid.
The company maintained its leadership role in the country, by indentifying
and expertise the new opportunities, and consolidation of the existing one. The
modifications in the assembly plant raised the production capacity of company to
16000 tractors per year on a single shift. This achievement pushed MLT into the
ranks of the World’s Major Tractors Manufacturing Company. The company is
continuously working on improving its competitive strength and efficiency to
provide the quality products to its customers at a competitive price.
Sector Analysis
The Sector Analysis for MLT is described by the following analysis & model;
SWOT Analysis:
(1) Strengths
Reduction in labor cost, high rank in the market, high revenue and profitability,
stronger supply chains with the new technologies, good employee safety &
health system, concentration on trainings with development, barriers in market
enterprise and skillful workers.
(2) Weakness
Smaller business units, productivity, tax structure, methods used in the
forecasting of personnel needs, policies are required to be updated, out of date
trainings system and low technical abilities as compared to the competitors.
(3) Opportunities
Economic growth, increasing demands, constant increase in the income,
markets globalization, use of the motivational tools, increase in the sources to
attract worker’s force and ventures capital.

(4) Threats
Government regulations, costs increments, tax changes, increment in interest
rates and cash flow.
BCG Matrix:
(1) Star
A multi-purpose MF 260 tractor has higher performance, fuel efficiency and
gigantic power to do heavy tasks made it a Start product for MLT.
(2) Cow
MF 240 is the most popular tractor in Pakistan. It has 50 HP range made it Cow
product for MLT.
(3) Question Mark
The generating sets for MLT; MPG-25 and MPG-42 both are working
manually.
So, these are the “?” for MLT.
(4) Dog
MF 385 4WD (MF 385, 2 nd edition) was the “?”. Later, MLT proved it as a Dog
product having no demand in the market as 1st edition is working with better
abilities as compared to the newly introduced.
Porter Five Forces Model:
(1) Bargaining Power of Suppliers
It is low as there is only one supplier for the raw materials to all the
organization in contract basis with mutual coordination.
(2) Bargaining Power of Customers
It is also low as fewer seller of tractors in the market, the price of product is
dependent upon the manufacturing.
(3) Threats of New Entrants
It is low as already existing companies have control over in market and prices
strongly. So, it is difficult for market survival as low threat for MLT.

(4) Threats of Substitute Product
It happens as Pakistan trade with other countries to provide the substitute
products in cheaper price.
(5) Rivalry among the Existing Competitors
There exist a strong rivalry between MLT and Al-Ghazi Tractors with the
difference in total number of tractors is 1%. As MLT has 1% more tractors
working in Pakistan than Al-Ghazi Tractors. The rest percentage is of Chinese
and Indian Tractors.
Company Background
Company Size:
MLT is to be an international group of companies, recognized for a wide
range of the quality products with capabilities in innovative designs. It is a
Pakistan based Engineering Company operates in automobile sector. It has an
average of 560 to 880 employees working in all of its locations. MLT also includes
Human Resources Committee, Board Committee for Group Supervision, Finance
Committee, Marketing Committee and Audit Committee.
Figure 1: Earnings and Revenue History of MLT
Profit and Loss Summary:
According to the Annual Report of MLT, a profit-loss summary is described.
MLT has large variations in the net sales from 2013 till 2018. The net sales in 2018

were 38,517,147 (Rs. thousand). Afterwards, the MLT has to face issues due to
failure of lack of machining technology. The gross profit and operating cost was
increased with minor changes every year. The percentages for return on equity
return on capital employed and return on assets shows the variations from 2013 to
2017, but these are of high percentage in 2018. The operating leverage was
increased from 2013 to 2017, but it was decreased up to 1/4 th in 2018 from 2017.
Market share:
The market share value per year was estimated at the end of each year. This
share value was constant from 2013 to 2016, but it increased twice in the year 2017
and 2018. The breakup value share was decreasing gradually after the year 2017.
The cash dividend share percentage was highest in the year 2018. The dividend
payout ratio was decreased after the year 2018. From the June 2020 sales, the
earning per share was Rs. 43.16; price-to-earnings ratio was 16.36 times; breakup
value per share Rs. 81.72 and dividend payout ratio was 115.85%.
Products Overview:
MLT specialized in the following three major products;
1. Tractors
Table 1: Tractor Products in MLT
Product Type Range (HP) Features
MF 240 50 Idea, versatile & all round tractor
MF 260 48 High performance & fuel efficient
MF 350 Plus 44 Heavy duty & hydrostatic power
MF 350 Turbo 48 Hydrostatic power steering
MF 375 68 Low noise heat engine
MF 385 75 Low noise with reduced smoke
MF 455 100 Most economical in this range
2. Industrial Products
Table 2: Industrial Products in MLT
Product Type Capacity
Forklift Truck 3 tons
Generating Set 12.5 – 50 kVA
Prime Movers 15 – 40 kVA
Generating Set 60 – 150 kVA

3. Agriculture
This area of MLT produces tine tillers, loaders, disc plough, blades and lawn
movers. The loading capacity of these products lies in the range of 3000 – 9000
pounds. The high speed steel is used as a cutting tool in cutters and disc.
Business Analysis
Strategic Planning:
 The optimum utilization of ancillary industry of Pakistan is to maximize the
glocalization of tractor parts and the farm equipment.
 MLT will be maintained a strong R&D department, in order to provide the
technical assistance to local manufactures in the product development.
 Creation of in-house plant facilities for manufacturing of components that are
not fabricated by the ancillary industry, either heavy investment is required or
the technology is complicated.
 To ensure the satisfaction of customers by providing them the quality products
at competitive prices, that also covers warranty and assurance of service after
sale.
Product Life Cycle:
Figure 2: Product Life Cycle curve

According to the analyst’s, MLT has secured 50% of the tractor’s market in
Pakistan. It has also adopted steady strength for competition against its rivals.
Currently, the company is working at its maturity stage like its competitors in the
market. MLT also introducing the new products for remaining stable as its
competitors do. Along with this, MLT is also increasing its after sales survive
duration. So, the customers will be more satisfied while selecting MLT. Even it is
at the maturity stage, the Senior Manager HRD, thought that they have very
efficient policies for MLT. These policies and strategies maintained the
organization at a stable stage. The production capacity is over 30,000 tractors per
year in double shift. The major competitors for MLT are Al-Ghazi Tractors, Indian
and Chinese tractors.
Current Change Issues
What they are?
The current change issue in MLT is the use of oldest technology in the
production and assembling plant of tractors. With the advancements in the
agricultural equipment, MLT were not being able to fulfill the demands of its
customers. The environmental factors influenced on the manufacturing process.
Thus, the life of tractors automatically shortens. MLT has to be worked for
implementing the new technology for its organization. This issue decreased the
market value of MLT after 2018 to onwards. As, it was expected from the last
years estimations, the market share price and revenue will be increased due to
more sales in this year. But, MLT has to be faced problems due to defects in the
tractors this year. This new technology involved the use of Spectroscopy Analysis
of the tractor and its parts during its processing. This new technology will be
providing the complete analysis of materials composition during each phase in
order to ensure the accuracy of manufactured products. This is also a cost-effective
method to ensure the quality of products. This new technology provides the
customer’s satisfaction as well as the company’s quality assurance profile.
Steps for the New Technology Change Management by MLT:
The implementation of new technology is stressful for everyone involved;
project managers, senior leadership, IT team, users and even the vendors.MLT
developed the proven methodology and change management principles for the
adoption of this new technology. The ten step process for successful
implementation of technology in MLT is described below;

1. Communication is a Key!
For successful change management, it must have a clear and organized process
started from top-to-down communication to explain the need for new technology,
plans for adoption and the impact of this technology on our organization.
2. Training, training & more training
The HR perceptive implements the specialists to conduct seven to ten training
sessions training to build their knowledge on new technology. This training period
provides opportunities to review the functionality over the period.
3. Remember: Everyone learn differently
In order to ensure that everyone learns the new technology thoroughly, the users
are provided with visual trainings and access to technology.
4. Make the Change Last!
Sometimes the worker got slack regarding the quality of the work. During the
adoption and training process, case review sessions were conducted. It is to ensure
the users are properly documented all of the employee relations, investigation and
takes full advantages of services the technology offers.
5. Review Utilization
The clients are encouraged to conduct the case review sessions with the whole
team. These cases help the team to help improve their documentation, which
protects the whole organization. It also provides the more experienced team
members to teach new members. Sometimes, a less experienced member may
catch to new technology and does its better.
6. Think across generations
It must be kept in mind that the new technology provides the options for our
whole workplace. It includes processes and methods, so everyone can feel
comfortable.
7. Commit & Incent
Got a commitment from everyone in the organization to use the new technology
and motivate them to adopt it. It also finds the creative ways to encourage our team
to follow the new technology.

8. Ensure Lasting Change
When the use of new technology becomes a routine, HR perspective helps the
clients to realize continued success by organizing quarterly business reviews.
9. Keep Developing!
Keep on reviewing the features and functionality of new technology in order to
make improvements in your process.
10. Sharing feedback with Vendors
The user feedback guides the engineering and products teams as they are to be
worked for the continuous improvement.
How MLT Better Managed this Change?
MLT might be better managed this change issue by the use of following
strategies in adoption of new technology.
1. Use of Software’s Simulation
MLT must use the Simulation’s software in the training of its employees. It
provides the workers to learn the complexity, they might face while working with
the new technology. It must be cost-effective method for the company to teach its
workers. Rather than spending their cost on the material and tools used for real-life
learning.
2. Expectations –VS- Reality
One major failure in implementing the new technology is due to the
unreasonable expectations. It is very important for an industry to research about its
average ROIs and your expectations based on the resources. MLT only thought and
about their sales and quality of product without considering this clause in their
strategy.
3. Integrated Knowledge Model
MLT must be worked with the Integrated Technology Model in the
implementation of new technology. This model is based upon the four constant
domain characterizing technology as part of enterprise process.
(1) Technology Core: The constituents i.e. equipment, physical laws associated
with the technology.

(2) Transformation Process: The operating modes and takes require converting
the constituents of technology into products/services.
(3) Products / Services Space: The knowledge covers on product services is
obtained from technology.
(4) Organizational Environment: The link of technology with the organizational
environment i.e. organizational, social or market opportunities.
Figure 3: Interconnected Knowledge Model
4. Roll-out the Implementation based upon Natural Diffusion of Innovation
Humans naturally resist the change. However, the extent we will do so vary.
This diffusion of innovation curve explains the willingness of people to adopt the
new technology. The five groups made from these curve; (1) innovators, (2) early
adopters, (3) early majorities, (4) late majorities and (5) laggards.
Figure 4: Diffusion of Innovation Curve

While implementation of technology, the use of this diffusion curve will be
reduced the number of conflicts and the resistance you have to be faced.
Future Change Issues
Why they are?
1. Joint Venture with Bolan Casting Limited – Pakistan
The one future change for MLT is the joint venture with Bolan Castings
Limited. As MLT is now purchasing the steel scrap and billets from outside
Pakistan. So, there is a lot of cost spent on transportation. BCL is the leading steel
manufacturing company. It manufactures all the types of steel with up to 99.99%
accuracy. The agriculture and tractor blades are made up of high speed steel. So,
MLT will be worked in Joint Venture BCL in future.
How it may be managed?
The joint venture must be done by a company would give you more
resources, increase technical expertise, greater capacity, access to the established
market and distribution channels. MLT might be worked with the discussed
strategy;
(1) Type of Joint Venture: It depends upon what we are trying to achieve. MLT
must be set up a Separate Joint Venture Business with BCL.
(2) Joint Venture – Benefits & Risks: It includes the sharing of risks and costs of
both the companies.
(3) Access your preparation for Joint venture: As joint venture is a major change in
a business. So, it must be beneficial to our potential for our growth and must be
fitted with the overall business strategy.
(4) Plan you’re Joint Venture Relationship: It includes the agreements for what are
you plan to contribute each other. It also sets up the realistic expectations and
allowed the success to be measured.
(5) Choice of the Right joint venture partner: BCL is the ideal partner for MLT as
their resources, skills and assets complement with each other.
(6) Creation of a joint venture agreement.
(7) Made your joint venture relationship work.
(8) Ending of a Joint Venture: A joint venture must be able to adapt the new
circumstances. Most partnering agreements came to an end. A well planned
agreement is still like to be some issues to resolve.

2. Product Change
In the future years, MLT has to say Goodbye to MF tractors. As the demand of
MF remained half of the total production capacity in the couple of years and 250 of
its vendors are unutilized till now. The exporting of tractors is very important for
MLT. In order to continue its exporting, MLT will have to break ties with MF.
Thus, MLT has to work more for the export of tractors to generate more revenue.
But, Leaving MF may generate several challenges for MLT in the local market. As
MF was a strong backbone for MLT and the local market in Pakistan. But, due to
the advancements in the agricultural equipment, MLT has to be worked for the
adoption of new equipment and products that will satisfy the demands.
MLT might be better managed with this change by using the Kubler-Ross
Model. The five grief stages of this model are discussed below;
(1) Daniel: avoidance, confusion, elation, shock and fear.
(2) Anger: frustration, irritation and anxiety.
(3) Bargaining: struggle to find out the meaning, reach out to others and telling
story.
(4) Depression: overwhelmed, hostility, helplessness and flight.
(5) Acceptance: explore new options, new plan in place and move on.
This model can be used by MLT by making three different stages using these
grief stages in correspondents with time and emotional state/action. From grief to
job loss, we all humans must deal with the non-linear stages of the adaptation.
Stage 1: Endings (Clarity and Empathy)
Daniel (natural reaction to look for evidence that isn’t true), Acceptance
(When it will become that the change is real, so frustration sets in and sometime it
leads to anger), Shock (For many, the first reaction to change, is panic) and
Depression (Low mood and low energy).
Stage 2: Transitions (Motivation and Capability)
Experimental (Sometimes the people put a toe in water and start engaging
with the new people) and Decision (After acceptance of reality and tentatively
engaging with the new situation, most of the people decided to go with it).
Stage 3: New Beginnings (Knowledge)
Engagement (From this stage, it is onwards and upwards).