Continuous improvement: The engine of next-generation production systems

Continuous improvement (CI) is a widely accepted scientific approach to process enhancement and waste reduction. However, as manufacturing enterprises start to migrate to a digital future, a new approach to CI will be required for organizations to remain relevant. In a recent interview, CCi CEO Glenn Leask and CCi Products Director Geoff Schreiner explained how organizations can leverage the key tenets of CI while embracing the shift to a digital world.

 

According to global research and advisory firm Gartner, corporate production systems are now considered mature and mainstream. What is the next-generation production system, and what are its objectives?

Traditionally, high-performing organizations have infused their production systems with lean, CI and performance standards to drive efficiency and bottom-line results. It paid off ‒ by making CI and standard work a business priority, these organizations consistently delivered superior performance.

These, and other organizations that have made CI the foundation of their operations, are primed to capitalize on the benefits of next-generation corporate production systems. Known as digital operating systems (DOS), these systems are aligned with the supply chain’s operating system and are designed to harmonize lean and CI principles with smart manufacturing.

While DOS won’t change corporate production systems’ fundamental purpose, they will transform the way they are built and run. DOS integrates the application of technologies and digital deftness with lean and CI principles to drive competitive advantage across the end-to-end value chain.

 

Why is it important for organizations to start looking at implementing digital operating systems now?

Companies can no longer ignore digital disruption. Yesterday’s innovation is today’s mainstream and today’s cutting-edge is tomorrow’s mainstream. Right now, organizations should have cloud capabilities, rigorous data analytics and some interoperability between information (IT) and operational (OT) technologies.

Traditional production systems tended to be manufacturing focused and didn’t take the full extent of the supply chain into account. This historical model is becoming outdated, mainly because it limits the interconnected fluidity and agility required of today’s value networks, which DOS promotes.

Manufacturing organizations that adopt new operating systems and associated technologies, as well as an agile approach to continuous iteration, can develop new ways to improve efficiency and scale solutions across the entire business. They can then build true competitive advantage.

 

How will a company know if they are ready to start implementing a digital operating system?

Research shows that organizations in higher digital maturity stages achieve nearly 50% better revenue growth than low-maturity companies, and third better than those in the middle stages of digital development.

A digital maturity assessment will reveal the company’s current baseline state and highlight key focus areas, which will assist in mapping out a DOS implementation process that focuses on adopting new technologies and processes at the right pace.

Organizations that have succeeded in achieving breakthrough performance have one thing in common: they moved systematically through the stages of best practice maturity to build the foundations of sustained performance improvement.

Digital maturity can be assessed by looking at eight key themes, which are outlined below. It’s also important to note that not all sites within a global organization will have the same maturity level.

1. StrategyDigital transformation should be prioritized and incorporated into the organization’s business strategy and goals. Digital-first positioning requires deliberate, dynamic, and progressive planning.
2. EcosystemDigital platforms are increasingly leveraged to broaden external collaboration in the pursuit of enhanced customer value and end-to-end capability. As such, organizations need to assess the degree of the digital alignment and strategic partnerships across their network.
3. LeadershipFor digital transformation to succeed, the organisation’s leadership must create a compelling vision of how the business will thrive in the digital world, which should also be reflected in the business model.
4. DesignInternal organizational architecture is increasingly reflecting a shift away from silos to agile operations. Technological tools and applications play a major role in improving this cross-functionality and in supporting an agile organizational design. 
5. DataData, and its monitoring and assessment through appropriate analytics, can unlock insights and create value. Future-focused organizations will, therefore, gather as much data as possible and analyze it to inform business operations and increase competitiveness. 
6. TechnologiesThere is an escalating scope for automation in manufacturing operations and business processes, including technology applications to support and merge enterprise systems. Lineside systems and Manufacturing Execution Systems (MES) will interlink more holistically, and interconnect with other business processes. The potential for big data analytics and advanced, real-time decision-making and execution will also become a reality as capabilities approach quantum computing.

Organizations undertaking a digital transformation journey should have a three- to five-year-plan for incorporating new technologies, including Artificial Intelligence (AI), into its operations.

7. InnovationThe development of innovation goals, the establishment of digital innovation teams, and the company-wide use of innovation tools are signs of a maturing digital culture and, as such, should be made a part of the day-to-day operations of the business.
8. CapabilityTalent must be enabled to perform. The digital workplace and factories of the future will require a new level of digital and technology skills, that must be updated continuously. This involves empowering workers to innovate with technology, managing talent development and implementing new ways of working. Some examples of effective learning methods include gamification of new skills, applying virtual or augmented reality, and delivering real-time work instructions via digital platforms.
What should the key focus areas be when implementing a DOS?

Any DOS implementation strategy should be maturity-based. Once an organization has determined its current state of digital maturity, it should define deployment phases (i.e. create an implementation road map), based on each site’s unique requirements.

This road map should include actions relating to:

  • Skills and capability building: Equip and upskill workers to thrive in a technologically advanced manufacturing environment
  • Process improvement: Put in place processes to support a digital factory and redefined standard work
  • Standardization: Standardize processes to replicate successes across the global organization
  • Technology implementation: Implement and optimize advanced technologies to drive efficiency
  • Data and analytics: Develop and implement advanced, data-driven problem-solving techniques

 

Why is continuous improvement important in a digital world?

To thrive in the digital age, organizations need to continually monitor and adjust processes to ensure greater efficiency, productivity and competitive advantage. It is this relentless focus on process excellence that lays the foundation for a successful digital transition.

New digital technologies are helping to identify untapped efficiency opportunities and have the capacity to unlock unprecedented levels of productivity and innovation. Only organizations that place a premium on CI will be able to leverage these benefits.

The digital era demands greater levels of agility and collaboration – against this backdrop, CI can be viewed as the ‘launch pad’ that helps organizations achieve these ambitions and prepare for the future world of work.

 

How does TRACC support organizations in designing, running and optimizing their digital operating systems?

The many benefits of migrating to DOS include access to real-time data, faster decision-making, E2E visibility and system integration. To capitalize on these benefits, organizations need to focus on three key areas: building a lean foundation, developing skills and adopting new technologies. Migrating to DOS is a complex undertaking, which is made much easier with a DOS enabler, such as TRACC.

TRACC is a digital integrative improvement solution that is designed to support organizations as they transition towards DOS. TRACC’s proven methodology, technology and processes can help organizations:

  • Create a stage-based implementation road map that will govern DOS implementation across global sites
  • Develop digital capability and promote new behaviors and competencies across all levels of the organisation
  • Access role-based improvement work tasks within a responsive user interface (UI) framework
  • Correlate performance and practice data to identify trends for rapid decision-making
  • Enable predictive performance improvement driven by machine learning

How and when a company decides to go digital depends on its culture and where it is in its business maturity cycle. Digital transformation does not happen overnight. It is a gradual process that unites people, processes and technology, and it ensures your organization remains not only competitive and profitable, but also sustainable.

 

Download The definitive guide to integrative improvement to find out how integrative improvement is helping leading global organizations unlock superior performance and deliver maximum ROI.