Work on the business to remain competitive in the digital age
As manufacturing operations become increasingly digital, innovative thinking is the key to remaining competitive during these uncertain economic times. The concept ‘to work on the business’, not just in it, is gaining ground because of its transformative qualities.
This concept was first popularized by Michael Gerber in his seminal book, The E-Myth Revisited. While it predominantly follows the entrepreneurial journey of how companies fail and how to ensure that they do not, business leaders can apply many of the book’s lessons in manufacturing operations too.
Shifting the focus from ‘work in the business’ to ‘work on the business’
Employees across the globe show up for work for an agreed number of hours intending to achieve results for the company and its clients. In return, they earn a salary and perhaps some employee benefits, which has always been the norm. However, as operations continue to apply digital technologies, working in the business will become more automated through the process of simplification and stabilization.
While machines haven’t supplanted human workers altogether, corporate executives face immense pressure from shareholders to meet short-term profit demands. Leaders looked to automation across the board to meet these demands, purely because machines make work easier. In fact, WorkMarket’s 2020 In(Sight) Report revealed that 41% of business leaders are currently using workforce automation technology.
Around 53% of employees surveyed indicated that they could save up to two hours a day by automating tasks, equating to about 20 hours a month. And contrary to the general narrative around automation, business leaders also believe that they could save considerable time by automating mundane, non-core tasks, like expense reporting. Some 78% of these leaders believe that they could save up to three hours a day through automation, which equates to roughly 30 hours a month.
This is where the focus would shift to working on the business and not just in it. According to the WorkMarket report findings, the time saved by both employees and leaders would enable them to spend more time perfecting work projects (41%) and improving client relationships (33%) – despite some naysayers claiming that robots are about to take over human jobs. In reality, only a tiny percentage of employees believe their role could be completely automated.
Instead, automation stands ready to free human workers from tedious non-core tasks so that they can focus more on innovative thinking and continuous improvement. This will put the business on a strong growth trajectory to meet the growing technological revolution’s demands.
Strategies for working on the business
Working in the business remains a necessity, as it is where the day-to-day activities of running the business occur. The key is to find a balance, of which freeing up time is a great enabler. Sustainable, long-term results can only be realized if you work both in and on the business. While the latter is more proactive, neglecting to work in the business can cause projects to fail before the work you’ve been doing on the business can come to fruition.
Working on the business refers to improvement work, where entire new ways of working are often created. It is where true operational excellence is built, which forward-thinking business leaders increasingly view as a critical driver of competitive advantage. They understand that operational excellence is no longer just a tool for incremental process improvements at an operational level.
The following are five actions business leaders can take to start working on the business effectively:
Although challenging, delegation is a healthy activity that is vital to growing a business. It is not a sign of weakness; but a sign of good leadership. By delegating specific tasks, leaders become free to focus on higher-value activities and use their time more productively, such as for strategic thinking.
- Identify a way to differentiate further
Rather than trying to obliterate the competition, look at innovative ways to truly separate yourself from similar businesses in your industry. In the book, Good Strategy Bad Strategy, author Richard Rumelt states that one of the pillars of good strategy is making sure your competitive advantage is difficult for competitors to copy.
- Automate time-consuming tasks
Automating a few disparate tasks isn’t going to show much ROI. However, automating the work of many small teams performing various interconnected tasks will provide greater value and may significantly increase employee productivity.
- Get employee input on how to improve the business
Employees at all levels will have ideas on how they can improve the company or processes. They may have ways to move the business forward that you haven’t considered before. It also helps build engagement, a critical requirement for continuous improvement success.
- Find a metric you know little about
Maybe you are a supply chain specialist but know little about changeovers, or you are unsure about calculating OEE percentages. Pick an area where you think the company can improve and rigorously monitor the relevant metrics.
Competitive advantage today and in the future will come only by transforming your business from end to end, function by function and process by process. Following an integrated, cohesive approach to value generation will give you the edge on your competitors, even during times of economic uncertainty.
Overcoming the challenge of detachment
Despite the clear benefits of automation, the risk remains that employees may become disconnected from their work environment. For example, they may no longer identify opportunities for improvement, or they may lack a desire for further learning.
In any organization, culture is often the most significant barrier to transformation, most notably in manufacturing environments. While digital transformation is about getting the Capex and technology investments right, managing people may involve more complexity.
While it’s true that humans may not be as efficient or quick at performing certain automated tasks, they have a much more versatile and dynamic set of skills. Robots, on the other hand, are very good at doing one specific thing. Therefore, it is essential to emphasize that automation is not a means to eliminate people from the process. Instead, technology offers them the opportunity to work smarter and boost their own efficiency by letting computers handle the more repetitive work. At the same time, they take on more advanced roles in the process.
Perhaps the most crucial component of a successful digital transformation is embedding the lean ethos in the very fiber of the organization. Continued investment in lean and continuous improvement (CI) programs will ensure projects are replicable and scalable, and that a foundation has been laid for a successful transition to a digital environment.
In a lean enterprise, employees are trained and empowered to seek continuous improvement, and the techniques and tools available to them are embedded within the company’s culture. In the foreseeable future, manufacturing leaders wishing to attain world-class performance levels and gain competitive advantage will need to foster a vision of symbiotic human-robot work streams towards this form of a learning organization.
Utilizing data and analytics to drive improvement
The ability to analyze vast amounts of structured and unstructured data to gain insights, often in real-time, underpins most digital transformation efforts. Along with the proliferation of internet-connected devices, an increase in globally connected business ecosystems, and evolving data-driven digital business models, is the demand that businesses build a modular but cohesive digital platform powered by big data from a variety of sources.
When data and analytics converge, real change becomes possible. Organizations worldwide are using their large amounts of data to solve problems, predict customer behavior, and continuously improve operations. These data insights help them enhance the efficiency of their entire value chain and improve functions like manufacturing, distribution, logistics and sales. The challenge is to extract the correct data from operations and build analytics that provide valuable feedback to drive improvement.
One of the digital tools available for this data extraction process is lineside systems. Used for extracting data from a production line or machine for a short period, these systems identify specific issues relating to a focused improvement initiative or initial loss and waste analysis. They will also provide proof of a problem and the data needed for effective root cause analysis. Once resolved, it provides evidence of improvement and could even draw attention to opportunities for further improvement.
The essence of transformation
The term digital transformation may well be a bit hackneyed, but it is no passing trend. On the contrary, digital pioneers are reaping real business benefits from their investments in digital transformation. In its early stages, digital transformation efforts can deliver cost savings and efficiency gains that can fund investments in innovation, new business and accelerated growth. These wins mean it has the potential to be self-funding.
However, in the manufacturing industry, digital transformation is not just about automating the assembly line or better analyzing existing data. It involves a change in mindset, approaches and new ways of problem-solving. Therefore, companies with an existing foundation of best practices across people, process and technology are well-positioned to succeed as they gradually transition towards the next generation of production systems, also termed digital operating systems (DOS).
In addition to having a solid best practice foundation, companies must also ensure their DOS implementation strategy corresponds with their current operational maturity state. A maturity assessment will reveal the company’s current baseline state and highlight key focus areas. This will help plot out an implementation process that focuses on adopting new technologies and processes at the right pace. If operational excellence is not at a sufficiently high level, an organization will struggle to gain the benefits of any new technology.
Technology adoption and optimization form the basis of any successful DOS implementation, enabling an organization to optimise day-to-day manufacturing activities and implement global improvement initiatives.
The manufacturing environment is evolving, and staying ahead in a highly competitive market requires a commitment to working both in and on the business, and driving continuous improvement throughout the organization.