Jim Wetzel (left) and Conrad Leiva (right) leading an educational workshop at SOUTHTEC 2023, “Smart Manufacturing: Why It Matters and How to Achieve It,” sharing insights on securing the future success of manufacturing operations. (Photo credit: David Butler II)

Article courtesy of Smart Manufacturing Magazine, April 2024 edition published by SME

The adoption of new technology plays an important role in the ongoing, competitive global manufacturing race. Many leading manufacturers are planning to compete as highly integrated ecosystems with highly connected digital supplier networks, and this race is fueling the drive to implement smart manufacturing (SM) technologies.

CESMII, the Smart Manufacturing Institute, is one of the national Manufacturing USA institutes helping manufacturers accelerate their efforts. Through our work with manufacturers, we have found that cultivating the right mindset and culture in the organization is a key factor to successful implementation and sustainment of smart manufacturing initiatives—a mindset that promotes the right set of attitudes and behaviors in the organization.

Mindset Matters

An organization can have multiple mindsets prevalent in its culture. Many have cultivated a lean mindset over the last decades that drove efficiency improvements by eliminating waste and focusing on customer value. However, the pace of technology innovation in products, supply chain logistics and customer services is creating new challenges for manufacturers that are beyond the manual lean methods of the past. There is a need to embrace a digital mindset without abandoning the lean mindset. In fact, studies have documented that when digital techniques are applied along with lean tactics the projects yield greater improvement—over 30% greater improvement.

The capability to work with rich insights, digitally orchestrate work and quickly act on new data is becoming the new norm. A digital mindset means that employees understand why the organization needs accurate, real-time data to stay competitive and deliver enhanced service to their customers. The right mindset and culture drives innovation in the organization. When employees see paper forms they wonder if there is a more efficient, paperless way to collect the data. If it takes days to investigate a customer complaint because employees are gathering data manually, they push for having digital data readily available, so root-cause analysis takes hours instead of days. Rethinking the process while applying lean principles with a digital mindset drives breakthrough performance.

To develop a digital mindset, the team must be trained for the digital dexterity required to launch and obtain the desired outcomes of SM initiatives. In addition to basic skills in dashboards and metrics, training in areas like critical thinking, complex problem solving, adaptability, resilience and creativity are equally important to realize the full benefits of digital transformation.

Lean and digital are good grounding mindsets for smart manufacturing, but it is also important to cultivate an ecosystem mindset. The technology available today can help manufacturers tackle all kinds of problems and reduce costs within their organizations, but the big opportunities lie in optimizing the entire value chain. By leveraging an ecosystem, manufacturers can grow the business and deliver more value through more resources to more satisfied end customers.

It has become increasingly hard for a single manufacturer to keep up with the pace of technological innovation and complexity in products and manufacturing processes. By focusing on specific specialties, partners in the ecosystem can target their capital and technology investments to fewer core competencies. While each company is optimizing and trying to “do more with less,” the ecosystem shifts the culture to a more practical and scalable approach of “do more with more.”

Conrad Leiva (left) and Jim Wetzel (right) engage workshop participants at SOUTHTEC 2023. (Photo credit: David Butler II)

Better Together

Manufacturers have realized that the best way to provide personalized products and enhanced customer communications and services is through an integrated ecosystem of partners, suppliers, distributors and service providers. As these ecosystems become common place and expected, manufacturers must be ready to participate in these highly integrated digital networks to remain competitive.

The new manufacturing ecosystem is evolving to leverage digital connectivity and infrastructure for higher levels of orchestration and optimization in the manufacturing value chain. This evolution requires a culture that promotes collaboration and embraces higher levels of transparency, not only within the organization, but also across the supply chain.

Overcoming the challenge of digitally collaborating outside the company walls becomes paramount. Concerns about ownership and control of processes and systems can make departments reluctant to share information across organizational boundaries. However, the ecosystem mindset challenges the legacy of clearly defined areas of responsibility and siloed information systems and embraces streamlined integrated processes across the old departmental boundaries. Instead of relying on managers to make all decisions during weekly meetings, the organization empowers employees with the information needed to make better decisions on the spot when issues come up.

Manufacturers are opening to sharing data in the supply chain to get higher levels of visibility and resiliency in their ecosystems as long as they have security and governance. The information flow needs to be architected to limit and secure the data, so the right partners get the right data required for supply chain orchestration. Companies embracing a digital ecosystem approach are already realizing between 16% and 32% improvements in their speed of product introduction and revenue streams from new products and services.

Prior mindset movements like lean had big impacts on manufacturing during the last few decades. It is time for a new smart manufacturing mindset that combines lean, digital and ecosystem mindsets for the next big wave of productivity improvements. Organizations with this new mindset will be better positioned to drive future success.

The combination of the right mindset, principles and roadmap creates the recipe for a successful smart manufacturing journey. CESMII is providing resources like the “First Principles of Smart Manufacturing” and is helping manufacturers with a systematic approach to the development of a roadmap that aligns the team and links the business and technology strategy.