3 Steps to Digital Technology Utilization in Manufacturing

Ken Koenemann | December 2, 2020 | 

In the business realm, shiny object syndrome is sometimes used to refer to how easily decision makers can get caught up in trying new technologies, methodologies or projects that may or may not be aligned with important business goals.

It’s undeniable that curiosity and openness to new ideas is important to business progress.

But, if you aren’t careful, shiny object syndrome can also be incredibly costly.

Especially in complex manufacturing environments where there is always another digital technology “shiny object” that seems to hold the promise of solving a key challenge or need just around the corner. In virtually every case, things are more complicated than they first appear. And if you don’t follow a smart process for evaluating new digital technology, you’re likely to be underwhelmed or even disappointed by solution ROI.

Shiny object bombardment

Making smart digital technology choices is all the more difficult given the constant introduction of cool new solutions. Between stories in the press, general industry buzz, ads that popup in our feeds and more, we are fed a fire hose of options. When you’re already overwhelmed with work, a solution that promises to easily fix, improve or streamline a process or issue can be mesmerizing. And rather than thinking critically about the big picture and whether or not there might be a better alternative, we often just go with our gut.

It happens as much or more in our personal lives as much as our business lives. For example, a colleague recently told me about a backup parking sensor system he purchased impulsively because his older model SUV didn’t come equipped with a camera. The system works as advertised, but he hardly ever uses it. He notes that opening the app on the phone before parking is usually pointless; either the traffic behind him makes the process of opening the app and waiting for the sensor to connect more stressful than just parking without out it or the spot is big enough that he knows he doesn’t need it. His go-to tool is still the side mirrors, which he simply learned to use more effectively for the sake of speed and practicality.

In scenarios such as this, when the costs are low, it’s easy to laugh off a poorly considered purchase. But when the costs to the business can run into the thousands or millions, it’s no laughing matter. In a recent post, we mentioned a company that had spent $3 million on a solution that was supposed to streamline labor requirements, but it ended up just shifting them to another area. Another company paid upwards of $70,000 to install a robotic material movement system to transfer parts about 10 yards within the factory. Although the solution may pay for itself very slowly, the factory could have achieved far greater returns from a more strategic investment.

3 steps to effective digital technology utilization

While shiny object syndrome can be a powerful force in decision making, it’s possible to avoid it entirely with a good plan built around three steps.

  1. Develop a technology roadmap

Your first action item when looking for a good digital technology solution is to temporarily forget about digital technology altogether. No matter how promising or cool a particular solution seems, it’s more important to consider the business issues you need to address and to ask important questions that you can use to effectively pursue business goals, such as:

    • Increased productivity
    • Reduced cost per unit
    • Warranty cost avoidance
    • Machine uptime or OEE improvements
    • Confirming and validating work or assembly steps

Clearly defining business issues enables you to map current and future state processes that need improvements to potential technology options. At the same time, you need to ask yourself what you are hoping to get from a potential solution. If you can’t accomplish one of the following things, then a solution isn’t worth pursuing:

    • Reduce scrap
    • Minimize material usage
    • Improve labor efficiency
    • Eliminate direct or indirect labor

The problem is that there can be a lot of value-related gray areas. For example, maybe a solution can alert you when a step is done incorrectly but it can’t fix the issue. Or maybe you’re considering a way to keep key equipment up and running for another hour. Well, what’s the value of that? Did it eliminate an hour of overtime or do you have enough work to fill the additional capacity (and if not, what will it take to increase it)? In other words, it’s important to carefully consider how any decision will impact the financials of the busines and things like cost of goods sold and capacity.

  1. Vet your best options

Once you’ve mapped out what you need to accomplish and have quantified the potential benefits and impact of a new investment, then it’s time to carefully weigh the options. A structured approach, like the Production Preparation (2P) approach, helps ensure objectivity. Even if a shiny object solution is still on your technology roadmap, it’s important to consider multiple alternatives so you end up with the best possible option based on your goals.

The vetting step is best performed by a team with a representative from any area of the business that will be potentially impacted by the solution. The team should determine which alternative solutions to evaluate as well as the evaluation criteria. The idea is to choose criteria on which individual team members can score each option in support of an objective decision. Criteria should include whatever makes sense for what you’re trying to accomplish. For example, the potential for a solution to reduce costs per unit along with setup difficulty, and maintenance challenges and costs.

Once you’ve determined the front-runner solutions, then it’s time to go back and consider whether the assumptions you made in the first phase are still valid and if you have a better or worse business case than what you started with. If your final cost/benefit analysis doesn’t add up or the risks are greater than expected, then you might need to go back to the drawing board. But if the stars have aligned, it’s time to recommend a final solution and start thinking about the roll out.

  1. Prove and move

The final phase is where you prove whether or not the technology works for your business needs and decide if it’s worth moving forward with it.

The roll-out or “prove and move” phase is also one of the trickiest because it’s easy to overlook important business-case considerations as you learn and begin using the technology.

Roll-out should consist of careful implementation planning, including finalizing of specifications along with verification and validation criteria using a 2P approach for a narrow use case. In the roll-out phase 2P involves considering all of the ways a new technology is going to integrate with and impact processes. For example, for a factory automation solution, you would need to consider things like:

    • Process layout
    • How to move materials to and from
    • What employee interactions are needed
    • Maintenance requirements
    • Daily checklists

Ultimately, thinking through these types of variables is essential to a ensuring a solution works consistently and fully understanding its benefits and tradeoffs vis-à-vis current processes. If a solution meets expectations in your trial area, you can then quickly move to implement it as needed across the business. Otherwise, you can save yourself the pain and costs of a wider rollout.

Best doesn’t always mean shiniest

When it comes to choosing new technology, objectivity matters. The goal should always be to find the best possible solution for the problem that you’re trying to solve. It’s the only way to ensure that you will achieve a worthwhile ROI and move the business forward. Best of all, as your organization relies on and sees the value from a structured 3-step approach to choosing technology, the process itself becomes easier. If you are looking for an outside perspective to help you move your organization down this digital path, our Technology Practice consultants at TBM Consulting can help you through this process.  Contact us to get started.

 

Ken Koenemann, VP Technology & Supply Chain
Ken Koenemann

VICE PRESIDENT, SUPPLY CHAIN & TECHNOLOGY
Ken is a 25+ year veteran of manufacturing, operational excellence and supply chain optimization. He believes that it is critical for organizations to address the challenges of strategic planning and use of big data in manufacturing. At TBM, Ken is actively leading the effort to our suite of services to include emerging technologies that improve productivity and convert complex data into information for improved decision making.