Those looking for inspiration and an overview of what’s new in the manufacturing sector got both in spades at Manufacturing Leadership Summit 2019, hosted by the National Association of Manufacturers (NAM). There was a lot of impressive new technology on display for manufacturers – new developments in smart printing, blockchain, the internet of things (IoT), machine learning and artificial intelligence (AI) among them.
The What and the Why of operational excellence were on center stage, with the focus on innovations and the clear business value of leveraging the new technologies to drive efficiency, scalability and growth. One of the keynote speakers, Sath Rao, director of digital solutions for manufacturing and product marketing at Hitachi Vantara, brought the What and the Why of digital transformation together by detailing how future vision frameworks around technologies such as IoT, AI, analytics, and 5G networks will enable manufacturers to realize the promise of Manufacturing 4.0.
That’s a solid foundation. You also need to understand the How and the Who behind these technologies: How to execute your transformation and Who you need to engage to get started. I led a roundtable discussion at the Summit entitled “Transforming your business for operational excellence” that offered a roadmap for those who wanted to embark on or strengthen their own journeys. Manufacturing leaders want to drive sustainable operational savings in many cases with the assistance of new digital tools. The message I want to convey is that manufacturers ought to be explicit on operational objectives and intentional on the approach they take to achieve them.
In the roundtable, I offered six steps that can form a roadmap for your journey to operational excellence, to ensure that you get the return on investment (ROI) that you’re looking for.
- Set clear goals. This helps you avoid CEO pet projects. For example, when a top executive comes to you with “Guess what I just heard about?” you can point to your established goals and note that this new idea doesn’t fit. Setting clear goals also identifies domains with clear stakeholders and outlines tangible operational benefits, like cost reductions or improved health and safety.
- Identify areas of variation. Take a close look at the sources of variation in your operations – and then set specific, achievable improvement objectives. Stabilization is always easier than wholesale reduction, so rather than solving a problem you haven’t solved before, strive for the better side of variation. Sources of variation often reside at the shop floor level, so expect that most variance-reducing plans will involve operators or technicians.
- Select proof-of-value (POV) use cases. Before taking action, most organizations weigh the complexity involved versus the value that they hope to realize. Weighing complexity is good, but I recommend putting more emphasis on value in the equation, especially in early phases of the digital manufacturing journey.
- Create an executive advisory board. In any type of transformation, even digital transformation, people are your biggest challenge. You need stakeholder and sponsor engagement and commitment if you’re going to succeed. In fact, the bar for digital solutions is necessarily higher because you should plan a higher rate of failure. New apps and tools should be used in a culture where leadership can handle it when they don’t work.
- Focus on results. Don’t be dazzled by the shiny new object. It’s not the tool that you select; it’s your determination to use and extract value from that tool that’s important. Have a formal mechanism in place to track the capital project’s ROI.
- Seek advice from outside your company. Remember that other manufacturers struggle and succeed, too, and reaching out to peers with questions is not a bad thing. There are also consultants who have done some deep thinking and have experience in this area who can help.
I wasn’t the only one at the summit who was thinking about the How and the Who: John Fleming, chairman of NAM’s Manufacturing Leadership Council Board of Governors, echoed my advice when he focused on the How and Who of digital transformation in his talk on “M4.0: Is the US Keeping Up with Global Competition?’’ to help US manufacturers keep pace with foreign competitors.
Now is the time for manufacturing leaders to define the strategies, allocate the resources, set objectives and get going. There’s no way to instantaneously get the full value of digital technologies for manufacturing. However, you can use these six steps – and consider using a trusted advisor well-versed in smart manufacturing – to help you achieve operational excellence now and into the future.