“Most CEOs I know don’t have the culture on digital or technology to stitch it all together. [A company has to become] a mosaic, a horizontal, creative culture that looks at doing things differently. That culture then reinforces the analytics which reinforces the rest. The cultural change required in most manufacturing is substantial.”
So says Gary Pisano, Professor of Business Administration at The Harvard Business School of Business at a forum this month moderated by Industry Week called Manufacturing: State of The Industry, as reported by MSDynamicsWorld here.
The panel moderator had pointed out the repeated “deaths” of manufacturing, reminding attendees of Japan’s alleged burgeoning manufacturing dominance in the 1970s… how the service sector would overtake manufacturing in the 1980s… how the Internet would drive it under in the 1990s… and how globalization in the 2000s would deliver the knockout blow.
Today’s new manufacturing, panelists made clear, is about service as well as producing products, and data is the “new currency,” a fact that may be lost on many of today’s companies. The truth is, today production has been revolutionized. There are a quarter-million robots in use, and 3D manufacturing builds prototypes, in some cases even finished goods, from the ground up, quickly and cheaply.
As Harvard’s Pisano went on to point out, today innovation is the differentiator in manufacturing, along with creative and inventive management and business models. “If you want to be a good product innovator, you must be excellent at manufacturing and new technologies will enable that,” he noted.
DynamicsWorld’s editor Dann Maurno quotes Microsoft Corporate VP of Marketing Jerry Knoben in expecting the definition of operational excellence to shift over the next three years to focus on data, which Knoben describes as “the new currency.” Says Maurno, “Operational excellence will be based on how companies manage data flows, automate production floors on data flows, and connect data from customers to factories to suppliers.” With over 600 suppliers, Knoben notes that the challenge to manufacturers is to combine supplier data with the manufacturer’s and customers’ in order to be more responsive and increase the pace of the organization.
“Operational excellence,” notes Knoben, “defines how we use the data.” Utilizing modern tools like BI (Business Intelligence), along with the burgeoning new world of IoT (the Internet of Things) which enables the interconnectedness of machines and data, allows the plant floor to provide a steady stream of information which can be used to predict and prevent production problems from occurring. Your hardware then “becomes the conduit for your data, or nodes on your network,” according to Jerry Jasinowski, Past President, National Association of Manufacturers and Founder and Past President of the Manufacturing Institute.
But the cultural shift we mentioned at the outset that is required to manage this change does not come easily. We’ll see what the panel of experts had to say about that in our concluding post on Thursday (next post). Stay tuned…