Will Platitudes Doom Your Manufacturing Business?

Posted by Dan Miklovic on Wed, Sep 28, 2016 @ 12:04 PM

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Answer questions you didn't know to ask"Patience is a virtue."
"If it isn’t broke - don’t fix it."
"Slow and steady wins the race."
One thing I have come to recognize in my 45 plus years in the industry is manufacturers love platitudes. Unfortunately, the culture that evolves over time from this caution becomes so stagnant that ultimately a manufacturer can become uncompetitive. 

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Most manufacturers and asset intensive industries are, rightfully, very risk aversive. Unlike a retailer that incorrectly rings up an item from a shopping cart, failure in many manufacturing processes represents a potentially life-threatening situation. Hence the fixation on caution and risk avoidance. At some levels, large companies are beginning to react to technological change and are looking at transformative opportunities, such as what Ford recently announced in the auto industry. It is LNS Research’s assessment that far too many companies are taking the wait and see, slow and steady, patience is a virtue approach to Digital Transformation because in their minds it isn’t broke, so they don’t see the need to fix it.

Manufacturers Doing the Same Old Thing

One of the challenges I have highlighted before is, in many cases, industry has failed to leverage new technology effectively. In briefing after briefing by vendors in the Asset Performance Management (APM) space, we see proof points built around using Industrial Internet of Things (IIoT) technology to improve CBM and RCM or to increase yield by reducing off-quality manufacturing. An example would be by actively monitoring a piece of equipment, a possible breakdown is predicted, acted on, and a cost avoidance of tens to hundreds of thousands of dollars claimed. Unfortunately, this compelling and usually true story is yesterday’s news.

The capability to do this type of monitoring and detection/prediction has been available since the 1980’s. Data historians, like OSIsoft’s PI, provided basic calculation capabilities that could at least alarm on abnormal or poorly trending behaviors and trigger inspection and/or repair activities as reported in many conferences and journals in the mid-1980’s. So 30 years later, thanks to the IIoT, we can monitor more equipment, at lower costs. The reality is we aren’t really doing anything new. Few companies do this and seem to be astounded at the results they can achieve. It leads to the inevitable question: "Why has it taken so long for something as basic as this to catch on?"

Manufacturers Don’t Know What They Don’t Know

Part of the answer to the previous question lies in the fact that manufacturers are notoriously secretive. Afraid to share anything lest they disclose some competitive advantage these manufacturers have not benefited from the types of collaborative gains seen in more technologically centered industries. Fortunately, today’s digital natives are breaking down the isolation common in manufacturing as social collaboration as just part of who they are. This leads to more disclosure of the type and magnitude of benefits that can accrue from investing in technology.

The bigger issue is that the culture of caution has led to a situation where most manufacturers don’t know what they don’t know. Many manufacturing companies are simply unaware of how little they know and understand about their manufacturing processes. The irony is in many cases individuals within the organization have deep process knowledge but the organization, as a larger entity, is ignorant of the problems that exist within its manufacturing processes. The challenge is how to break out of the rut of doing the same things even though you might be using newer technology.

Winners Take Calculated Risks

The companies LNS Research sees as successful in beginning to pursue at least some elements of Digital Transformation are those that don’t take it slow and easy or wait and see. They are the ones that, like Shaunae Miller of the Bahamas, make that leap, take the calculated risk and go for the gold. If you dive too soon, you fall short of the finish line. If you dive too late and miss the gold, time it right and you might just win the women's Olympic 400-meter race. So, the companies that are willing to experiment, occasionally fail. The companies that learn and explore are those most likely to succeed in adopting transformative technologies.

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Tags: Asset Performance Management, IIoT, Digital Transformation