Blog 5-7: The Crack in the Foundation

In the previous blog I highlighted four simple divides that could hamper or completely undermine a company’s ability to push forward with a Digital Transformation. These divides are articulated as being between ALL types of suppliers and the end user they serve. To refresh your memory, these were:

• The understanding between ALL types of SUPPLIERS and what the Value Drivers are for the End User.

• The inability for ANY PARTY to create or articulate the Use Cases that impact the value drivers.

• A common understanding of just exactly what a Solution is and how you define success.

• TRUST – to change the business model it requires trust across all parties.

There are a few common themes that reach across all the items above that also resonate to topics I covered in the earlier blogs. To empower people to take action there must be a common and full understanding of the problem and the opportunity. Similarly, once defined, there needs to be a clear line of sight between every action that gets taken and the reaction it drives.

However, at the foundational level a problem exists. The reference point to drive any activity for any party, end user or supplier, should come from clearly defined KPIs. These KPIs should have meaning and be aligned with the broader KPIs that exist within the company, and ultimately its overarching goals. Unfortunately, there is a lot of “drift” that has taken place here over the years. Within the manufacturer, divergence and misalignment has occurred within the organisation due to its evolution. Let’s park this thought as this will be a topic for discussion in the next blog.

A Pyramid of KPIs – ensuring every stakeholder is aligned to the companies “North Star”.

If clarity and alignment can be made around this pyramid of KPIs, the discussions take on a new form, become more productive, drive greater alignment across all parties and ultimately ensures there is a common objective that is targeted by all.

Without this how do you ever achieve a data driven operation?

Imagine having the End User, the Technology Partner, and the Equipment Supplier all working in harmony, trilaterally, focused on the same goals, achieving a WIN-WIN-WIN outcome.

However, the desires of suppliers are significantly at conflict with the end user and break this triangle before it can be put in place.

Technology providers do not want to make bespoke products that result in an increase in SKUs and their sales costs. “One Size Fits All” is their desire. Let someone else figure out how to make it work effectively (i.e., the Solution Provider). Any “extra effort” impacts margin, so path of least resistance to a sale is the goal.

What the end user needs is C-COTS products, CUSTOMISED Commercial Off The Shelf products.

Likewise, machine builders want to sell “black boxes” as the end users procurement team tend to be “highly professional”, resulting in a situation where the best (and sometimes only) way to make money is on services – and black boxes ultimately tie you in for years and years. This is hardly in the spirit of openness and collaboration.

However, even when either of the above parties do fully understand your needs, the “Dollar Goggles” get put on and Collaboration goes out the window. Lack of trust kicks in, no one wants to share, they selfishly want to keep it all for themselves. Having spent many years in Sales on the supplier side, trust me this is like an addiction which is hard to break. Ultimately remuneration drives motivation.

But all is not lost. Let’s simply get back to basics and focus on the problem in hand. The starting point must always be to spend the time to truly understand the problem that needs to be fixed and how it aligns with the businesses KPIs, hence the value of addressing it with a solution – irrespective at this stage of what the solution, or who the suppliers may be.

We forget sometimes that it is pointless spending all the time on defining the technology stack first, then heading out with it to try and find a problem that it may or may not be able to fix.

You simply end up with a screwdriver hammering in a nail!

What a waste of time and effort, not to forget the impact it makes on trust when you try to drive collaboration, but there is a feeling that “you have already picked your solution”. The ones that CAN fix your problem, may end up just feeling like they are making up the numbers, and being treated as column fodder, hence give up without even trying.

The manufacturer must recognise the value of engaging those that know how to “DO” early in the process.

Manufacturers may be able to identify and define the Use Cases, the problem statements, but more often than not, they can’t. This may be down to lack of time and resources, but also a major factor is “not being able to see the wood for the trees”. Unconscious bias, or perceptual blindness can be a major limiting factor for a manufacturer.

To address this problem, 99% of the time, the consultants are brought in to close the gap. I think I have mentioned in my previous blogs my view on the effectiveness of this approach, so I won’t go over old ground. However, one new factor here is that the consultants often come in “top-down”, and hence do not understand the minutia of the problem. As Edwards Deming said, “without data, you are just another person with an opinion”.

This minutia is for me the make-or-break topic for I4.0. The old adage of “garbage in equals garbage out” is driven by the critical lower-level components – the data that everything is built upon. The sensor providing a signal that feeds a KPI. The log sheet the operator must fill in manually to provide insights. The production variables that must be captured to know conformance to plan. And many more examples of key low-level data, which if wrong, basically causes a ripple effect across the complete business. If you have DODGY DATA, you aren’t going to be able to TRUST anything you are being told.

Of course, every supplier will tell you they can “interpret data” and “learn and improve”, but ultimately if the source is consistently wrong, biased or inaccurate, the wisdom you are garnering is flawed. Of course, a system is better than no system, but this will come at a cost, either from not curing the problem, or impacting the potential ROI.

The foundation must be solid. If data is critical for the KPI pyramid, the integrity of that data must be assured. Whether it be the calibration of an instrument, or the recording (manual or automatic) of process data, or the accurate positioning of sensors to give the required granularity of a measurement, all must be in place. Likewise above Level 1 components, Level 2 and Level 3 systems (LINK) must have standards inherently designed within them to enable not only integration vertically with superior systems, but also horizontally with neighbouring systems.

This horizontal integration must go beyond the four walls of a plant, both upstream and downstream. Linking together the value chain, the organisation, all the way from the Source to the Destination, the Farm to the Fork, the Barley to the Bottle is for me what true Digital Transformation is about, enabling the Data Driven Value Chain.

To make it happen, you’ve got to fix what you already have. Align it towards the vision you demand, and most importantly align all of your partners in the same direction as every investment must FIT. Then top it all off with complete OPENNESS and TRUST.

Easy! However, your biggest battle may be within your own organisation. Every piece is there, you just need to get everyone on the same page… Easier said than done. This will be the topic for the next blog in the series.

Blog 6-7: The Divide in the House, coming in a weeks time