Digital Transformation or Operations Transformation?

Author: Greg Johnson Schneider Electric Blog

In 2008 I was the product marketing manager for a mining-industry MES package called Ampla (still going strong today). In those days, we would focus on the relationship between people, technology and management systems as the “magic” that would lead to production improvement.

I also use to particularly like the work of Ralph Rio from the industry analysts ARC, his “Intersection of Lean and MES Best Practices” is still online. Ralph pointed out that a key issue with lean manufacturing implementations was “backsliding”.  This is illustrated by his chart below…

The basic idea is that while you can do a lot with just the 2 “ingredients” of people and management systems (blue line), technology provides the mechanism that continues to drive improvement over time (green line).  With no technology to lock in the gains, improvements will inevitably deteriorate over time (red line). Everyone in the production game has seen this I’m sure.

I was reminded of Ralph’s elegant chart when discussing digital transformation with several different customers in the last few weeks.  The “technology” piece is here today and available off the shelf, in the cloud, and as a service. We can start using it right now in alignment with the right people and management strategies.

Both BCG and McKinsey have recently written excellent articles on the alignment of technology with management systems and people:

• BCG: “Leading companies are implementing these technologies to accelerate the business impact of operational improvement programs, such as lean management. In fact, frontrunners do not typically regard Industry 4.0 as new production paradigm, but rather as a lever to maximize and accelerate the benefits of other programs.”
• McKinsey: “In other words, Industry 4.0 can be understood as digitally enabled lean. For example, companies have long optimized yield, energy, and throughput by improving process steering. Now new sensors, more data, and advanced analytics can boost the ability to solve problems and identify sophisticated improvement measures, resulting in smarter solutions and new productivity gains.”

What technology solutions can you use to start with?

I have previously recommended that you look at Wonderware OnLine InSight for data collection and analysis. Just released is the Insight Performance Solution which enables you to collect and access equipment efficiency and asset utilization information anywhere, anytime to drive plant performance and share best practices throughout the enterprise. Why not start there?

And whether you call it a “Digital Transformation” or an “Operations Transformation” isn’t really important.  What is, is that the tools are out there to help you enable a business transformation that will improve your bottom line.