Part three of a six-part blog series based on my 30+ years’ experience collaborating on innovation with complex, discrete machinery manufacturers.
Previously, I discussed how a supply chain planning (SCP) system of record (SOR) enables collaboration across the entire supply chain – from demand-plan creation through the supply-side response, and from detailed operational planning through tactical-level planning. Now let’s discuss more specifically how manufacturing executives can gain greater insight into operations.
As I’ve mentioned, my motivation for writing these blogs stems from an article from the Harvard Business Review, “Why (and How) to Take a Plant Tour,” written by David M. Upton, professor of operations management at the University of Oxford’s Saïd Business School. The article was written in 1997, and I found it enlightening to reflect on how much has changed in the last 22 years.
Back then, during the “lean revolution,” I was a solutions engineer, and I well remember the challenges we faced. I had nightmares that all the missing kanban cards in the world somehow found their way to my house. They filled my bathtub, they were stuffed in my refrigerator, they were piled high on my hammock, and it was my job to get them back to where they belong. Those were some sleepless nights.
Back then, Professor Upton wrote:
“In recent years, managers have recognized how manufacturing capabilities contribute to a company’s overall strategic strength. The ability to respond quickly to customers’ orders, to customize products to match customers’ exact requirements, or to ramp up production rapidly can be a powerful and difficult-to-imitate competitive weapon. But many corporate managers identify their plants’ capabilities only by accident – as a result of chance conversations with plant managers or operations specialists. Consequently, many managers do not have the information necessary to cultivate, shape, and exploit their company’s manufacturing capabilities. As plants develop, however, they need guidance to build capabilities that meet current and future needs. Plant tours can be a powerful way of providing factories with that kind of direction.”
Yeah, that’s how it was back then. Many executives identified their plant’s capabilities (and challenges) by accident, as a result of chance conversations. You wanna watch your hair turn grey, just think of the liability, lost revenue, inefficiencies, employee and customer dissatisfaction, and missed opportunities due to poor planning and inadequate manufacturing insights. Fortunately, I’ve witnessed a lot of changes over the last 22 years.
Professor Upton was correct that managers need the “information necessary to cultivate, shape, and exploit their company’s manufacturing capabilities,” but I don’t think plant tours are an adequate solution to the challenge. The problem is that information must travel from the line or cell level, to the plant or regional level, and then onto the enterprise or management level, and back again. This not only takes time, but information is often lost or misinterpreted along the way. Even if executives take an occasional plant visit, they’re not going to have access to real-time metrics that they can immediately share with others.
But it doesn’t have to be that way. Industry 4.0, the fourth industrial revolution, is here. Machines are connected and communicate with one another to make autonomous decisions. With the Industrial Internet of Things (IIoT), smart sensors and wearables, RFID technology, e-kanban (yeah, no more cards flying around the plant), and much more, data can be gathered and analyzed to create a cloud-based network of digital twins, a virtual representation of a physical object or system. Stakeholders from the shop floor to the top floor can share information in real time, resulting in more efficient, and less wasteful, production.
To get a much deeper understanding of how digital twins can help manufacturing executives – and R&D and engineering and operations and IT – gain greater insight into their company’s processes and allow them to focus on more strategic initiatives, I highly recommend The Network of Digital Twins Compendium e-book we produced at SAP.
As Richard Chamberlain, strategic product manager of Bosch Rexroth, points out in Machine Learning in the Digital World, “Statistically, in a given case, detecting a fault by chance carries a probability of just 13%, a figure which is increased to 43% with expert human monitoring. Couple that with machine learning, however, and fault detection accelerates to 95%.”
The IIoT also means we can be simultaneously involved in the ideation of new products and processes in real time from anywhere in the world without the challenges of version control. Costs can be worked out in the engineering phase, time-to-market improves, production and design cost are optimized, and virtual or 3D printed prototypes can be shared. It also allows the real-time monitoring of quality requirements, or extreme variability, as well as the creation of a lot size of one.
Of course, embracing Industry 4.0 doesn’t stop at the loading dock, so in my next blog, I’ll focus on what Professor Upton said about procurement back in 1997, and how technology has made working with others more efficient.
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