In Continuous Improvement, Digital Manufacturing

How Risk Avoidance Kills Business Value

It’s not easy to adopt new technologies in the manufacturing industry. It takes courage and fortitude to evangelize and champion the potential benefits of new and sometimes exotic-sounding innovations in an atmosphere where skepticism reigns. Succeed, and you’re a company hero. Fail, and you lose face, risk falling out of favor, and have to endure “I told you so’s” from every naysayer who built a career on playing it safe.

Risk: The Fear Factor                   

There is constant pressure from management to boost profitability by making processes more productive and efficient. Beyond tiny increments here and there, innovative technology is the only way to do that, so forward-looking managers are receptive to trying some out. However, to inoculate themselves against the risk of failure, they go very small. They limit engagements to proofs-of-concept (POCs), in the hope of getting a feel for how new systems perform and whether people warm up to using them.

They also go “many” – very many. As a rule of thumb, the larger the manufacturer, the more POCs they run in any given year. I personally know of companies that conduct more than 70 POCs annually, to check out a maximum of innovations with a minimum of risk. At least that’s the idea.

A small number of POCs that show potential are awarded the coveted “Pilot Project” status; maybe a trial run on a single production line, or if the vendor is really lucky, in an entire plant.

These are still relatively small projects, but more visible than POCs and thus have much more riding on the outcome. Which means greater perceived risk and a heightened level of fear. Piloting can go on for years, with various technologies pitted against each other while their respective sponsors continually weigh value derived against the cost and challenges of managing change and driving adoption by the rank and file.

The Doom Cycle

Time passes, pilots achieve little or no quantifiable success, and management priorities change as project advocates leave or move on to other departments or initiatives. In the end, the company passes on wide deployment of anything — either as an active choice or by passively opting not to decide. Frustration sets in, eventually building to critical mass and triggering another Doom Cycle, which ultimately reaches the same end: no new technology breakthroughs at scale.

And the Winner Is… Nobody

Companies end up right back where they started: lots of data, no ability to unlock its value, and no enterprise system for making smarter, more informed production decisions.  Much ventured, nothing gained. The best intentions get sabotaged by an understandable but ultimately lethal desire to avoid risk.

The good news is we now have the technology innovation to break through this doom cycle. After numerous customer efforts and engagements with major manufacturers, Sight Machine has created and refined an approach to technology and continuous improvement that avoids the Doom Cycle. Our customers have achieved dramatic results at scale when embracing a data-first approach to their manufacturing operations.

Breaking the Cycle

Going data-first builds the strong foundation to deliver results, versus choosing purpose-built applications that address one single problem. There are several points to consider as you begin your journey of breaking the doom cycle and generating real value from your technology investment:

Choose SaaS solutions. With software as a service, there is no big upfront capital expense. You pay a much smaller amount as a subscription, which you can turn off at any time. The same goes for infrastructure: the software runs in the cloud via a secure network. Another advantage is that you’re always on the latest version, as updates are included in the subscription and distributed once or twice a year, with no interruption to business processes.

Be clear with tech vendors about your business objectives. Define the problems and success metrics up front. Do you want to improve process yield, or pinpoint the root causes of persistent problems? Looking to reduce downtime or scrap rates? Establish metrics that give you and your vendor clear objectives.

Look for ringing proof of impact to your metrics. If a given vendor can’t cite at least five concrete real-world examples of results that relate directly to your goals, thank them for their time and end the conversation there. By “concrete,” we mean numbers such as these: $6 million in identified yield increase at a single plant. $11 million in opportunity identified through higher output. $450,000 in productivity improvement on a single line. $1.3 million in reduction of unplanned downtime. A 25% decrease in rejected product. $1.8 MM in annual savings through identification of specific equipment needing preventive maintenance. (These are actual results that we at Sight Machine have achieved for our clients.)

Lean in and Embrace Change.  It’s not just risk aversion that kills projects; biting off more than you can chew leads to a bad outcome as well. Through our vast experience in technology implementation and adoption with manufacturers, we have learned the best practices for embracing change and successfully going live with new, innovative technology. Working with experienced manufacturing partners like Sight Machine increases your ability to succeed quickly and sustainably over time.

 

So how do you get started with all of this change? Sight Machine has invented the de facto standard for evaluating your digital readiness and accelerating your digital transformation. We call it the Digital Readiness Index.  Come begin your journey with an honest, informed conversation about how to break your doom cycle and drive measurable impact.

Join me today in celebration of the Death of the Pilot and POC for all manufacturers globally. And welcome the brave new world of digital manufacturing, where production data reigns supreme!

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