September 23, 2015
So far in our Factory of the Future series, we have discussed definitions, characteristics, and benefits of modernizing your manufacturing plant. In this last part, we provide important steps for getting started.
Embracing the disruptive technologies affecting manufacturing and becoming a Factory of the Future requires advanced planning. It is no simple task, nor is there one off-the-shelf product in a box you can buy and install that will suddenly transform your organization into a high-performing digital enterprise of smart factory. It is a process, one that often involves multiple phases, outside expertise, investments, and top-level commitment. If you don’t have C-level support and backing, which includes a budget, the plan is doomed to fail. Here are the common stepping stones to reaching the status of Factory of the Future:
1. Prioritize goals and set a strategy.
- Know what you want to achieve and why.
- Be specific with your objectives so you can measure progress.
- Set realistic goals. Don’t over-inflate benefits or ignore that there may be challenges.
- Keep customer satisfaction as a central part of your strategy.
- Include in your strategy definitions of success and how you will measure progress.
- Prioritize and choose goals so you achieve early wins to build support.
2. Create teams, exploit expertise.
Establish a cross-functional team with representatives from every department.
Make sure you have one definitive leader with decision-making authority.
- Clearly define roles of team members and expectations. This can’t be a low-priority project that gets intermittent commitment.
- Invest in team building and empowering internal personnel to conduct research and become experts of specific subjects or tasks, such as data analysis, configuration tools, or quality control systems.
- Break roles into manageable segments, being careful to not overload one team member or department.
- Involve skeptics as well as enthusiasts in your team structure. Differing perspectives can help bring a balanced panoramic view to the project.
- Turn to industry experts, consultants, and product vendors to assist with highly specialized areas. Don’t reinvent the wheel. Let the outside resources bring their history and “lessons learned” to the table. Ask for case studies and references.
3. Optimize market opportunities.
- Develop an in-depth understanding of your target market, including buyer profiles, buying triggers, and the buying decision process.
- Explore new markets, regions, demographics, and vertical niches.
- In addition to considering expanding, also consider contracting—or specializing on a vertical industry or niche market to focus resources.
- As you choose priorities, select initiatives that support your efforts to reinforce current market positions as well as capture new opportunities. Be opportunistic, while keeping a strategic perspective and grasp of realistic expectations.
- Pursue the opportunities where you can create product differentiation and offer unique value propositions.
4. Implement, while controlling risk.
- Successful companies often use a phased approach to deployment of major initiatives, such as becoming a digital enterprise. A phased implementation approach provides you with early wins and chances to refine your strategies over time.
- Start with foundational concepts then build from there.
- Make sure you get the basics right before you move on to more advanced strategies. For example, when deploying a process to automate reaction to sensors, first make sure you can collect and contextualize the data—before you begin on automating response to the data.
- Start with technologies that will be used across multiple applications. For example, business intelligence is used in nearly every application of a digital enterprise. Consider strong analytics and reporting tools as the prerequisites for moving on to more applications of data.
- Monitor for quality and security issues. As with any new initiative, integrity of data, quality, and security must be considered. Involve experts to minimize risk.
5. Evaluate and refine.
- Perfection is seldom achieved on the first attempt. Continuous improvement is an important concept that remains critical in manufacturing.
- Evaluate progress at predetermined milestones, making course corrections as needed.
- Keep your organization informed on progress. Celebrate achievement and accept suggestions for improvements.
- Don’t set goals too low. As your expertise moves up, so should your expectations.
- Measure new revenue or gains versus investment to calculate your return. Remember your return on investment (ROI) can be less tangible characteristics, such as customer loyalty, recognized leadership, or positioning as the expert company in the field.
These five steps are merely highlights of a path to becoming a Factory of the Future and embracing the disruptive technologies changing manufacturing. Each industry will undoubtedly have variations and specific must-do steps that need to be introduced, such as any industry mandates, testing or compliance issues to manage. Each company will find its own cadence of “plan, research, enact, evaluate” that makes sense.
An article in McKinsey Quarterly, “Strategic principles for competing in the digital age,” summed up the issues well by saying, “It’s important to keep in mind that digitization is a moving target. The emergent nature of digital forces means that harnessing them is a journey, not a destination—a relentless leadership experience and a rare opportunity to reposition companies for a new era of competition and growth.”
The most important take-away is that you need to take action now or risk being left behind. If your manufacturing organization is not far along the path to modernization, venture in that direction. Use these guidelines as a starting point for discussion and planning. Get started!
For help getting started on modernizing your operations, check out this comprehensive 2015 Guide to Manufacturing.