Recently, as part of the Watercooler Wisdom series, Horizon’s Frances Donnelly was joined by Sandy Wickman, Senior Business Consultant from LBMC Technology Solutions, to discuss the Digital Factory trend and talk about some real-world results and findings. View the full interview here.

GP’s Watercooler Wisdom series was designed to present brief, targeted, expert-led discussions to business owners about challenges they may be facing. You can view the past and upcoming sessions of the series here.

Resistance to Digital Factory Initiatives

Manufacturers do not typically operate on the bleeding edge of technology when it comes to their business systems. In fact, for many, keeping a business system going that works at a satisfactory level is the height of their expectation. As a result, many manufacturers do not typically fall into the ‘early adopter’ category when it comes to investing in new technology for their business operations. Sure, they would like faster material planning, or real-time quality control reporting, but the reality is investing in equipment that will build a product faster, with less waste, has traditionally been the more comfortable purchase.

So, when the arguments for the transformation to Digital Factory come up, and the tools that will help the process begin to be explored, there is expectation that acceptance and adoption will be long and slow. There are manufacturers today who still run min/max and safety stock planning systems, 40 years after the availability of MRP. So is it a reasonable prediction that, 40 years from now, there will still be manufacturers who do not fully embrace the Digital Factory?

Unexpected Influences

While it still feels safe to predict, based on historical performance, that resistance would continue to be strong when it comes to investment in digital factory tools, the recent pandemic and related business and social impacts have most likely skewed that prediction. It is highly likely the following unexpected influences are going to drive a much faster acceptance and adoption of Digital Factory behaviors for many.

1. The real world example that companies who had already started their investment in Digital Transformation were able to adapt and innovate much more rapidly than their competitors during the pandemic. Having existing infrastructure and employees knowledgeable in these new tools enabled organizations to shift to remote work and other solutions with fewer losses in market share.
2. The global disruption in supply chain reinforced the need in many industries to have reliable onshore suppliers. It is forecasted that in many countries there will be industry and government led efforts to develop on shore resources, a case in point being the intended US investment in chip manufacturing. These efforts for greater reliance are supported by meaningful investments that will drive demand for cost effective use of technology in many spheres.
3. The labor shortage, particularly of skilled labor, is no myth and will require a range of solutions, including technology investments to enable manufacturers to serve their customers and achieve needed cost and profitability goals.
4. Consumers are more focused than ever on understanding the sourcing of their products and want to be reassured about purity, freshness and other factors. Delivering that confidence in real time will create the need for technology investments in order to cost effectively serve the required information at the point of inquiry.
5. The opportunity for manufacturers to expand, either by acquisition or rapid increase in market share will expose existing systems that fail to scale as targets for replacement so that these growth spurts can be quickly accommodated.

What Might Your Digital Factory Look Like?

Manufacturers are very proud of being ‘different.’ Differentiation in production methods, secret sauces, customer service levels, quality control and many other facets of the business activity are all part of the culture and brand for any manufacturer. It makes sense then that each manufacturers’ Digital Factory will be achieved through a unique combination of tools, processes and people. What will be common across all manufacturers is the enablement of better (meaning more prompt and more accurate) decision-making by their employees.

The true goal of digital transformation in your factory is to enable the flow of meaningful data, so that it is no longer interrupted or siloed. You want to be able to surface your data so that it can be used in many different ways, particularly so that your people can be more effective and efficient.

Roadblocks to Success for your Digital Factory

Like some manufacturers, maybe you have already become convinced of the need to digitally transform your business environment and systems, or perhaps you have been very recently impacted by some of the unexpected influences covered above. Maybe you have not begun the transformation, but you are the kind of person who likes to be prepared. Regardless of where you are on your journey, roadblocks are not unexpected. I’d like to thank Sandy Wickman for giving us this set of commonly occurring roadblocks. While not extensive, they highlight areas for forward planning and execution especially as the only way to deal with each of them has to do with simply recognizing them for what they are:

Roadblock 1. Simply getting started. It doesn’t matter if you are just beginning the adventure or if you are trying to complete a sub-area of the total plan. Leadership must ensure that each project gets started and is resourced for success through selecting an internal team that has the bandwidth to do the necessary work.

Roadblock 2. Keep the project scope from creeping. Nothing is more likely to delay the project then constantly expanding the reach of the desired solutions. Certainly, caution can be exercised to evaluate the correct fit of the selected solutions but allowing the design to continually accommodate sub-projects will prevent the effort of getting started from actually achieving a meaningful conclusion.

Roadblock 3. Be prepared to invest in the effort of reconciling data. Data variability is a big challenge in systems that are not digitized because there can be so many different and unaligned sources for that data. For many manufacturers, it is this variability that drives them to recognize the need to provide the single source of truth that is inherent in digitized solutions. Reconciling the data while moving it to new digital platforms is a task that is often overlooked in the planning stages because our historical behavior of relying on the data, even when there is variation, causes us to omit or simply not place enough importance on this step.

Roadblock 4. Stay the course. Most manufacturers are struggling with distraction. They are dealing with supply chain issues, staffing shortages, new work and safety rules. In the meantime, they have to still operate their businesses and accommodate needed projects like outside audits, trade shows and plant visits. They must find ways to ensure they have the ‘right’ talent and innovation to stay the course and avoid distraction so they can carry a change project to the point of ‘benefit’.

Conclusion

The digital transformation trend will directly impact the investment decisions of manufacturers. Urgency to adapt and engage in this trend is being led by factors that simply didn’t apply three years ago. At the core of participation in this trend is the need to deliver to our people the tools they need to make timely decisions so they can communicate promptly within and without our organization. The cost of investment in the technology is easily quantifiable, but it is only half the story. The other half is how will leadership empower people to reach the benefits that digital transformation can bring.