Digital Transformation in Manufacturing: How to Prevent Initiatives from Failing
- Podcast /
- Product Led Growth /
Recently Jonathon was interviewed by Janet Eastman on the Make it Right podcast, where manufacturing industry experts discuss the advancements, challenges, solutions, and opportunities in this highly technical industry. Their conversation ranged from falling in love with the problem, to advice on how manufacturing leaders can ground their approach in technological endeavors, and ultimately achieve fulfilling adoption and execution of digital transformation initiatives. Below are some highlights of their conversation.
You can listen to the full interview episode here:
“You have to fall in love with the problem”
It’s a really exciting time right now for digital transformation in the manufacturing industry. I think a lot of things will be transformed forever. For a lot of manufacturers who are in the process of modernizing, Emerge is helping them understand that websites are no longer simply brochures. Websites are actually products themselves. They are an avenue to enable their ability to engage with customers, vendors, and employees delivering self service models to support the products that they’re manufacturing. On the internal side, we’re taking huge sums of data on operations and looking at how they can modernize the way that they model their manufacturing process, finding new ways of innovating, and finding efficiency.
There’s a deeper reliance on technology. To support everything from customer engagement to employee safety, and that reliance, and that opportunity is only going to continue to grow. I don’t think that’s going to actually shift backwards in any way. The need for companies to invest into ecosystems where they’re cross connecting and amplifying their investments, so they get a higher return. Organizations that really understand technology and how to approach it, so it can be very flexible and adaptable, are going to be the winners in the future. They are going to be able to work in more effective ways. They’re going to be able to innovate, pivot their manufacturing lines, they’re going to be able to have more insight and intelligence to respond, and have the right conversations with prospective customers. That’s only going to get amplified.
The most high performing organizations are those that are obsessive about, and fall in love with the problem and not the solution. They get out of their own way, they really acknowledge that the only thing worth solving is the problem that customers are having, or the employees are having. Solving that will have a positive outcome in moving business forward. And they get out of the way of their idea. It may be a great idea, but it may only be an idea. Being able to step back and really fall in love with the problem that you’re solving and not get hooked on to what you feel is the solution is a common trait that we see in the most successful organizations.
Why do digital transformation initiatives in manufacturing fail?
The biggest point of failure is a misalignment with understanding your users needs. But you have to go a lot deeper than that today. Knowing your user, whether it’s your customer or an employee is essential. Often, there’s an idea of moving forward with technology first, without really deeply understanding the problem. Designing and testing a solution before you get into that development process results in a lot of failure and challenges. That holds up a lot of companies. Another common point of failure is just organizational complexity. They don’t fully understand how much of their knowledge is institutionalized or siloed, or how they have interdependencies of being able to solve another problem before they can deliver that solution. When the complexity is not accounted for in the technology, the promise of new technology and what it’s going to take to bring it to fruition is just not very well understood. These complexities hold a lot of organizations back. In manufacturing, many companies are dealing with legacy technologies or lack of solutions in place at all, where it’s been a manual process for, in some cases, decades, and now they need to overhaul and rethink that in the business.
A successful manufacturing client project
First, I’ll share a success story. One of our clients saw an opportunity in where technology was moving. Previously, the installation of their products required a lot of manual configuration. And these were usually embedded products at very complex facilities. The ability to realize that the biggest problem both for them and providing support, as well as for their customers, was the installation and maintenance process. By embedding new technologies into their products, they were able to create a mobile application where they could actually provide installers the ability to configure without having to climb giant ladders to access corridors. They were able to look at each one of these devices that were being installed, and then able to manage the performance and maintenance of them. That created an incredible amount of data that showed them for the first time how well that product was performing, and when they needed to think about maintenance and management. It was game changing for the organization as much as it was for their customer. Inevitably, by solving the installation problem, they also created a story that could help them drive more sales and create an overall competitive advantage going forward. It was a really wonderful project to be a part of.
With this client, we realized there were so many people involved in the process, we had to pull all of the institutional knowledge to the surface, examine it, and understand the total picture. For many people and divisions within the organization, they were so focused on what they were doing, they had never seen any of what was being visualized and articulated outside of their specific enclave. This prevented them from seeing the entire picture of how that product line was being produced, the full lifecycle of that product, how sales were being supported, and the constant improvement that needed to take place for success. This resulted in the functional teams not being nearly as effective. We weren’t unlocking all of the skills and experience that was propagating through the entire organization. The first thing we did was bring that to the surface. As soon as we recognized this, we were able to apply similar methodologies to lean manufacturing. We were able to identify where to look for the bottleneck, and where the deficiency or area of opportunity was in the process. It became very clear that a significant amount of time was being spent on the idea of service. The challenges of service topics that continued to emerge were related to installation and maintenance. That unveiled an area to focus on and go a lot deeper, and really hone in on where we needed to solve a problem that was having a significant impact on the organization.
Outside perspective, such as we provide at Emerge, allows you to ask questions you might not have thought about. We start to ask questions about things we don’t understand the same way you do. We’re asking questions sometimes in a different way, or with a different point of view. As we start to ask clients to really unpack how they do things, suddenly, you usually see light bulbs go off. “I didn’t think about it that way.” Or, “Yeah, we used to do it this way, or we’ve thought about doing it that way. But we never really went anywhere with it. We weren’t sure what was possible.” Sometimes that’s the key; showing a client what’s possible once they actually have identified that problem.
When the wheels came off
Many years ago, we had a client who had invested in an analysis and were planning to invest into new technology to increase their yield. They wanted to proliferate this new technology into the process across multiple factories. It was with genuine intentions. But what they hadn’t done yet was fully model all of the considerations that went into that process. We always think about things like material time and people yield. Things like: how much is known, what the error rate does through every step of the manufacturing process. Some things just hadn’t been fully accounted for. They had different parts in different facilities. The facilities layouts varied. There were different types of equipment in different locations. The proliferation became very complex. The promise of the new technology proved to not be nearly as effective in moving them forward. What they had really hoped for was to begin accumulating data. As much data as they could possibly gather. But they weren’t exactly sure what to do with all of the data once it had been obtained. That in turn created more questions of how to make the data actionable. Ultimately, the expectations between what the data would do, and the new technology that was being implemented fell completely flat. They hadn’t anticipated the people factors in transforming the culture and the organization, and that they needed to build alignment to move that forward. It was a failure of how they approached the process of implementing technology. Unfortunately, this gross underestimation took them a couple of years to unravel.
How should manufacturing leaders be thinking about technology and what it can do for them?
There are two things about technology that we’ve seen a lot. Technology creates this natural optimism and excitement. I encourage every leader to think about technology and temper the enthusiasm. Ground your goals to near term objectives. I think sometimes the focus is on what we can do long term that we lose sight of what has to happen short term. When that happens, we don’t measure the right things to show us that we are moving forward successfully. Then, expectations fracture very quickly. And there’s a lot of frustration and tension where there doesn’t need to be. Another thing that’s really critical, especially in manufacturing, is looking at technology as part of an ecosystem and building your technology through a strategy of building a platform. So that platform thinking of how do I unlock all of the components of my technology ecosystem, and if I’m going to create something new, how do I build it into that ecosystem so the information and its capabilities can move both upstream and downstream through the organization to power every function. That methodology, and that thinking coming from leadership is one of the hallmarks of really successful technology initiatives. We see that because they start to understand when they look at things through a platform lens, the interdependencies and intricacies of what it’s going to take to move forward.
Where should the user experience come into consideration in the development process?
It should be at the forefront of the entire process. There are a lot of bad products out there. There are bad tools that are built. And if they happen that way, it’s led purely from an engineering perspective, or they simply lead in and decide: “let’s just build it.” There’s also a lot of talk in the technology space about being agile. “Let’s just get something out there and see what people think. We’ll just dive right in.” The problem with that is that you have these really poor experiences and then you find a lot of those products, either unsuccessful or the work gets thrown away. And what’s happening in most cases is that there’s a lack of understanding about what agile means. There’s a lack of understanding about how you approach lean product development, there’s a lack of understanding of how you can incrementally make the investment in order to make sure that it’s going to be a good one.
You may have potential customers that need to educate themselves about solutions that you may be manufacturing, or the potential of finding you to help them manufacture a solution. And so there’s this research stage that customers are going through, there is an evaluation stage. Do you have the right product or service? Are you the right partner to work with? Then there’s the actual purchase decision. Next, there is the actual product or service delivery and support. And the website as one example: as soon as it goes from being a brochure, to supporting that entire journey, it is a product in itself. And if you really get clear on the jobs to be done on that website, by your customers at every stage, you’re creating an incredible engagement platform to really connect with them.
The other thing that you can do with technology to really engage customers is understanding how you present and educate them about the value of your product, especially if you have a complex or sophisticated offering that has to be broken down. This may be where you’re not able to work in the same ways that you used to, needing to be socially distanced. Being able to be mindful of custom configuration or collaboration that is taking place in order to produce and create products. I think there are a lot of tools that manufacturers need to think about when they engage with their customers. If you invest into the work, what does that look like? And what kind of sales enablement tools or what kind of intelligence can you produce with great technologies and how do you empower your team to drive the growth of your company? We see that one a lot. There’s a lack of business intelligence, yet there’s so much at their fingertips and yet they’ve just never been able to bring it all together. Bringing that information together, so you can talk about the quality of your product and the numbers to back it up. Determining all of our customers are this type. What are the common considerations there? What’s the common way they use our products and services, or want to engage with us? All of a sudden, that becomes very, very insightful. Then you can take really actionable steps into engaging your customers more effectively.
Managing digital transformation in manufacturing for success
Digital transformation can feel really exciting, but becomes very overwhelming really quickly. And we see that transformation, whether it’s around empowering employees with new tools, how you’re going to engage customers, the optimization of your operations, or as you’re adding technology to your product or service offering in some way, you’re amplifying the value of your current product. Adding a way to connect with it, like the configuration tool I mentioned for another client. When you start doing that, you need to break it into very small, near term digestible chunks. Then that way you have a path so you’re not overwhelmed.
One of the key things that I would recommend is understanding and investing into building your acumen, continuing your business development acumen. Invest into understanding, design thinking, and understanding how technology is implemented. A top level knowledge and understanding of these things is incredibly empowering. It cultivates an understanding of the investment you’re making at a completely different level. It transforms you to be in a successful place with managing alignment, expectations, the promise of technology and making sure that fits.