Future factories: Unlocking the transformative potential of the digital supply chain
If there’s one thing we’ve learned from the coronavirus pandemic it’s that evolution is the cornerstone of competitive advantage. When it comes to reconfiguring supply chains and the factories of the future, no organization can afford to stand still. In the words of American entrepreneur, Victor Kiam: “In business, the competition will bite you if you keep running, if you stand still, they will swallow you.”
But what does this mean for manufacturing operations? Traditionally, high-performing organizations have employed corporate production systems to drive efficiency, effectiveness and bottom-line results. And with good reason: by placing a strong emphasis on continuous improvement (CI) and standard work, and harmonizing people, practices and processes, these organizations have been able to consistently deliver superior performance and maintain a competitive edge.
Speed and agility are the watchwords now ‒ according to the Gartner Hype Cycle for Manufacturing Operations Strategy, 2020 by Simon Jacobson, organizations are now seeking “to unlock manufacturing operations’ ability to support the supply chain’s broader agility imperatives, to sense and respond with speed and flexibility to changing market conditions.” The report goes on to say that lean-based systems, such as total quality management (TQM), Total Production System (TPS) and world class manufacturing (WCM) have inherent limitations and “are not equipped to meet the new requirements for agility and speed nor do they effectively leverage technology with the consistency required.”
Future-focused manufacturing organizations are recognizing that this is the pivotal moment when lean and digital intersect. They understand that in order to meet the mandates for speed and agility, they need to leverage the key tenets of lean manufacturing while embracing the shift to a digital world. To quote the Hype Cycle report: “A digital operating system is the next generation of corporate production systems. It is aligned with the operating system for the supply chain and supports the convergence of lean and digital. This, combined with the impact on both the physical and digital worlds, has transformative potential.”
So how will manufacturing organizations mine the transformative potential of the digital operating system? Here are four guiding principles that will help manufacturers capitalize on the benefits of future factories.
1. Embed a culture of continuous improvement
Perhaps the most crucial component of a successful digital transformation is embedding the lean ethos in the very fibre of the organization. A continued investment in lean and CI programs will ensure that projects are replicable and scalable, and that a foundation has been laid for a successful transition to a digital environment.
In order to remain competitive, to innovate sustainably, and to continually accelerate shareholder and stakeholder value, organizations needs to adopt an integrated approach to improving performance. This can’t be done sequentially – one site or region or business unit at a time. Improvement must happen simultaneously across multiple regions and facilities, and at all levels.
In a truly lean enterprise, employees are trained – and empowered – to seek continuous improvement, and the techniques and tools available to them are hardwired into the company’s culture. In the decade ahead, manufacturers wishing to attain world-class performance levels will need to foster a vision of symbiotic human-robot work streams that comprise the new learning organization.
2. Embrace new technology with a maturity-based approach
Organizations that have succeeded in achieving breakthrough performance all have one thing in common: they moved systematically through five stages of standard best practice maturity to build the foundations of sustained performance improvement.
Determining levels of maturity across the entire organization is vital, as it allows organizations to establish their baseline. A maturity assessment should reveal the gaps between the baseline state and the desired end state; highlight priority areas; and provide the road map and implementation pathway that will lead the organization to Stage 5.
Fundamentally, an incremental, maturity-based approach to operational excellence prepares the organization to adopt and adapt to new technologies at the correct pace. If operational excellence is not at a sufficiently high level, your organization will struggle to gain the benefits of any new technology.
3. Eliminate silos with people engagement
While technology and network convergence have occurred within many manufacturing companies, the bigger challenge is often organizational and cultural convergence. This convergence is essential to truly break down barriers and eliminate silos of information and isolated systems. Only then can a manufacturing organization align technology with its business objectives and become more responsive and efficient.
Thus competitive capability will not necessarily come from automation or technology, but rather from the adaptation and creative use thereof. Already we are seeing that the fundamental people engagement practices — teamwork, leadership, goal alignment, and so on — are becoming even more important as technology becomes more sophisticated.
Done correctly, the adoption of new trends and technologies will certainly help accelerate maturity development in organizations.
4. Leverage big data and analytics to drive results
Organizations worldwide are using their large amounts of data to solve problems and continuously improve operations. The challenge is to effectively extract the right data from operations and build analytics that provide valuable feedback to drive improvement.
Lineside systems are one of the digital tools available for this data extraction process. These systems are used for extracting data for a short period of time ‒ from a production line or machine ‒ to identify specific issues relating to a focused improvement initiative or initial loss and waste analysis. This data will provide proof of a problem and the data needed for effective root cause analysis. Once the issue is resolved, it provides evidence of improvement and perhaps highlights opportunities for further improvement.
Learn more about the benefits of lineside systems and how they can support your digital transformation strategy.
The journey to establishing a digital operating system is not without its challenges ‒ it is an evolution, rather than a revolution. But with a consistent focus on the key pillars of success ‒ investing in CI; embracing new technology with a stage-based approach; eliminating silos; and leveraging data to drive results ‒ manufacturing operations will become the ‘engine’ of growth, optimization and improved operational excellence across the value chain.