058. Idea – Prioritizing Technology for Industry 4.0 Transcript
Welcome to EECO Asks Why. Today we’re going to have an idea of episode we’re gonna be talking about prioritizing technology for industry 4.0. To help us walk through this we have Brandon Mendoza who is a Director of Sales at Odin Technology. So welcome Brandon.
Thanks, Chris. Appreciate it.
Yeah man. Looking forward to going through this with you and maybe we can just start by helping our listeners who may not be too familiar when you hear things like 4.0, because you do hear terms about smart manufacturing, digital transformation, 4.0 all these things and they can be somewhat confusing.
So if you had to sit down maybe to an eighth grader, somebody in middle school, how would you explain that to them?
Yeah, no, that’s a good place to start. I agree. There’s a lot of buzz terms that are being thrown out there and it can get confusing. Quite a bit of overlap. When I think about smart manufacturing industry 4.0, digital transformation, I try to simplify it down.
It’s really about combining smart, connected systems with advanced analytics to enable data-driven decisions. And I’ll use a quick analogy so that, even an eighth grader would understand what I’m saying there. If you think about a car today, and you’re sitting in that car, that car has a variety of different smart sensors.
So whether it’s sensor reading the tire pressure, the temperature of the motor or various feedback on the electronics, those sensors are then displaying that information to the person in the car, on the mobile device, might even have analytics running against all that data. If you think about the future of cars going towards the autonomous vehicles, you’re going to start seeing, predictive analytics and other ways to combine the data, to really enable better decision making and in a car where it can actually drive itself.
Today it’s providing information to the driver that’s helpful. “Hey, there’s somebody next to you don’t get over” or, “Hey, you’ve drifted out of your lane.” But it’s really using data to allow people to make better decisions and make those decisions faster.
I love the car analogy. That definitely, very relatable and is we’re seeing the auto industry change and evolve with electric, and then, like you mentioned the autonomous car that’s as really cool. So now, good foundation. Thank you for that.
When you start working through some of these technologies, you’d run into headwinds. So maybe help us walk through, what are you hearing out there consistently from a technology prioritization standpoint of headwinds that people have?
Yeah. We actually recently did a survey and I was somewhat surprised to see that 76% of manufacturers say they struggled to prioritize, industry 4.0, smart manufacturing technology investments. And at first that surprised me, but when you reflect on everything that’s happening in the world, COVID just like every other industry, impacted manufacturing quite a bit.
And I think what it’s done has really accelerated the need for digital transformation. And so you have a lot of companies out there trying to accelerate their efforts and move quickly. If you look at, the complexity of the various technologies that make up smart manufacturing, number one that I think makes it difficult. The rate at which the technologies are changing is faster than ever before and will only continue to increase. When you look at these efforts here, it’s really a cross-functional change across the organization. As far as driving alignment, and even once you pick the technology, actually driving adoption and actually using the technology to create value by driving different behavior, there’s a lot of things where it can go off the rails.
So yeah, I think folks are struggling to prioritize, build out that roadmap, understand where to start, how to scale and everything that goes along with that.
Right. Now, you said, It was at 76% of industry is struggling to prioritize?
Yep. Yeah, we just did a survey about two months ago, and that was the number that we saw.
Wow. That definitely shows an opportunity maybe and having conversations like this will help. So for the listener out there, Brandon, that may be struggling and they’re trying to evaluate from a technology standpoint, as you mentioned, where to go, what advice would you give them?
Yeah, I always start with three questions. When we started this podcast, you asked me what does smart manufacturing mean. And I think that’s a good question to start with as far as what does smart manufacturing mean to your organization? What is the capability or the thing that you’re trying to drive with this idea of smart manufacturing. And then once you understand that, I think you want to understand how it could impact your operation.
So what are the outcomes where the actions, what are the changes that you’re trying to drive. At Odin, we talk a lot about the fact that value really isn’t created, unless somebody is taking a different and better action than before. So I think you really need to reflect on what did the outcome and what are the actions or behavior changes that we need in order to drive that outcome.
And then lastly, just simplify it to what’s stopping you from achieving that. So if you know what you’re trying to do, what impact you’re trying to make. Now reflect on, what’s stopping you from achieving this. And I think that’s where sometimes it can get complicated because it could be infrastructure, it could be analytics, it could be visualization tools, it could be skilled resources.
It could be, funding, timing, all sorts of things. And that’s where it can get complicated. I would look to leverage various resources out there. Like you can do like a digital readiness to understand where you’re at today and how that compares to roadmaps that are out there.
Forrester, who’s a third-party consultant, similar to Gartner, just released a smart manufacturing tech tide last quarter, where they evaluated the top 20 technologies and they broke it into. maintain a vast experiment, divest to try to more clearly define that roadmap. so there’s a couple of resources out there that you could leverage, but I think you first have to, again, go through those first three questions that I ran through to understand, what it means to your organization.
Right? Absolutely. We’ll recap, just those questions. What does smart manufacturing mean? And when I heard you say that Brandon, I was thinking that may set the vision, right? Or help define the culture of where are we trying to go? The other two, how can it impact operation? That definitely speaks to the ROI and, tying it all back together. But I like your last question. What stopping you? Because that’s where the rubber meets the road, right? So from the rubber meeting the road standpoint, what are you seeing out there from leading companies that are successively implementing new technology. What’s setting them apart right now ?
I’m a big fan of Simon Sinek and starting with the why. And I think that is very applicable here. As far as companies that are successful. There has to be a really strong why ingrained behind the smart manufacturing initiative. Why are you doing it?
And usually that relates to the problems that you’re trying to solve and very clearly defined use cases and outcomes. I think a lot of times people assume that smart manufacturing means more automation and replacing humans with technology. But I think it’s more so around combining humans and technology to make humans more productive. To allow us to make better decisions faster.
And I think if you clearly define that why, why the company is investing there and how you expect that to impact people’s roles and hopefully make their job better. I think you’ll get that clear buy-in upfront. So people know what to expect and know why they’re doing it. And then from there, I would say companies that I’ve seen be successful, really focused on action and focus on small wins because sometimes, a lot of these initiatives are really transformative across the whole company.
And so it’s easy to get over complicated and make it a really massive, wide encompassing effort. And, it’s great cause you might have a big impact in the end, but it takes a long time to get there. And that can be a little bit grueling for folks to go through and not see the results.
And so I think companies that focus on driving small wins will help drive that adoption, will help people understand where the value is and how it’s going to improve their role. Think about how to make it sticky. At the end of the day, if the change or the technology or what you want your teams to adopt, isn’t something that makes their job easier and it becomes a burden and not something they see positively, it’s not going to be sticky versus if it’s something that they become dependent on relying on a day-to-day basis. And they realize wow, this makes my job better. This makes me more productive. It’ll be easier to drive that adoption because they’ll naturally want to use it.
And I think the last point I’d put out there is because it’s such a company transforming initiative, it really requires a cross functional team. It can’t be led by one single part of the organization. It has to be cross functional to really work.
Absolutely. To take us back for our listeners, it all starts with the why, and getting that defined correctly.
So I love how you said, you focus on the action .The small wins. I tie that back, back in the days for reliability that I used to support here at EECO, I called it control groups. Pick a small group of assets, focus on that group of assets versus trying to eat the whole elephant at once.
Let’s just focus in on here. Let’s win that. Let’s win the day. Win that battle and then it, hopefully we’re winning some advocates along the way. And like you said, making it sticky. And if you do that adoption, like you’re talking about really just starts to really grow and exponentially and good point on the cross-functional team.
That leads me to my next question around the who. Cause you think inside of the manufacturing environment, there are a lot of people, a lot of departments, a lot of people are usually involved with technology. Who do you see as being leadership roles in technology or industry 4.0 type initiatives, things like that?
Yeah, I think it’s been changing over time. This is another one where I can throw some recent survey results at you that might be helpful here. On a recent survey, we asked that question of manufacturers. We said, Hey, who’s important to involve in that cross-functional team. And 90% of folks said both engineering and IT. So those are the two most common portions of the organization that are critical for smart manufacturing industry 4.0. Operations was almost 80%. A close third behind the first two. And then next was digital transformation was around 50 to 60%. And then finally finance and HR, and I’ll point it out a surprising one here that’s grown on me recently is, clearly you can’t leave finance out of the conversation, because at the end of the day , the project needs to be funded and needs to make financial sense. But the HR one, which in our survey was only 22%, so you can see it’s a small percentage I think is actually maybe a misstep that people are starting to understand and put more energy and action towards.
I did a recent interview with Chris Lynn from GE healthcare who leads up the HR side of this transformation effort for GE healthcare. And he talked a lot about again, when you think about what you’re really trying to do again, combine technology with people to really drive improvements, that people aspect is a huge part of the equation. And if you’re not involving them upfront, I think that’s a misstep and I think it’s only going to slow you down or cause the adoption to not go the way that you want.
And so now I would encourage folks, although HR teams sometimes aren’t invited to the table until people go to put it into action, I would try to invite them more upfront so they can help understand how this is going to impact their workforce, help message it, and get the why and the buy-in to their workforce. And then help create that plan to go execute. But yeah, that’s the cross-functional team that we typically see.
That’s great. I definitely hadn’t considered that. You think naturally to the engineering and the IT. I think anybody listening to this, that they’re working with 4.0 or smart manufacturing, those that are two groups of people that we’re seeing have to come together.
That whole IT/OT convergence. That’s a natural fit, but the HR that’s an interesting component. Good advice. Definitely good wisdom there. I think it’s something that we need to explore more as we evolve in industry and manufacturing, things like that. So thank you for that, Brandon. That was awesome.
There’s so many things changing in the market right now. It’s a lot of uncertainty out there on how to invest and how to make decisions from a manufacturing standpoint. What would you say to a manufacturer out there right now, who’s trying to make good decisions from an investment standpoint, maybe talk to that finance guy or that finance person. Give us some advice. Where would you go?
Yeah, I, I agree. There’s definitely a lot of market uncertainty where we’re in an election year, we had, the largest global pandemic, there’s trade Wars to a certain extent going on. So that, there’s just a lot of shifting priorities right now. And so I think it’s important anytime you have market uncertainty to focus on what you can control, and not get too caught up with the things that are out of your control.
I think the two biggest themes that I’ve seen over the last few months, as far as where manufacturers are focused on improving, it’s really around improving operational agility. So they can respond faster to changes in demand as we saw with COVID as well as operational resiliency. So that was another thing that was exposed to COVID was “hey, we can’t operate the plant remotely. We’re very dependent on labor or people being physically in the plant or close to one another. What’s the next pandemic looks like, what is a cybersecurity attack look like”?
There’s several things that could expose a weakness within the organization. And then, I think it’s important nowadays, too, because of that uncertainty to really, to pilot the new technologies and prove out the value before you make a massive investment.
Again, small bet, small wins sort of idea. I think when people are evaluating the technology, it comes down to ROI, meaning their functional requirements a lot on time to value and payback, right? Again, small wins. How fast can you prove this out? And then I think that ties back to ease of implementation.
I think folks are leaning towards more turnkey type solutions that doesn’t require additional engineering and development after the fact where the cost and scope can start to grow. And then lastly, CapEx versus OPEX. Is this gonna be a capital investment or is this something that you can build into your operational costs? So hopefully that answered your question.
Definitely. That was some really good stuff. I love the operational agility versus resiliency. That’s, that is critical. And it’s definitely shown through this pandemic, that companies that were ready or they were in a better position to react because they had that mindset going in.
If you’re a manufacturer out there, Brandon, and you really want to get going. And you’ve talked several times about, trying to start with a small control group or just certain areas to really pilot things out and get them going. Are there any areas of low-hanging fruit or minimal risk, that manufacturers could start implementing right now?
Yeah. there’s many places to start. I think again, I’ll bring us back to the fact that it’s technology combined with people to make your teams more effective. And so I would focus on workforce productivity, right? What technologies are going to get you productivity with your teams and drive that adoption?
I think it’s important to, as folks are making decisions to think digital everywhere, Anytime you can transfer something that wasn’t digital yesterday to something that will be digital tomorrow, that creates more data that you can leverage and take advantage of. I think again, starting small and proving out those wins before you scale.
I think when you look at the smart manufacturing technologies that I referenced that roadmap from Forester and they did 20 different technology groups. There are some out there that are cross-functional. So I would think about starting there because you can get a lot of capabilities across several different areas very quickly. But I would also focus on technologies that are focused on driving actionable improvements.
And what I mean by that is there’s a lot of smart manufacturing technologies that add data, add reporting, add analytics, add these things that can only be seen as like nice to have and something that sits in the background. I would focus on solutions that are really driving a workflow to action.
So it’s not just going to be this amazing report or analytics in the background. It’s very built into your operations as far as driving a workflow that leads to different and improved action. And I think if you start there, your ability to drive a quick win will be a higher probability.
You’re looking for a immediate impact, right? Or direct impact, rather not immediate. Direct impact to show how that technology has positively impacted your operations. Thank you.
You did say digital everywhere, man. I think we may be onto a t-shirt Brandon. You want to go in with me? We’ll market that digital everywhere. I love it. And I have, have that out in the manufacturing plants, man. What do you think?
I like it. I like it. One other thing I’ll just add to that is, you know so much of this is about data, which is great because the more data, the more potential to improve decision-making.
But it’s also, I think what a lot of us are dealing with is like kind of system overload, right? So much has been thrown out us that we’re trying to get good at filtering and figuring out where to prioritize. So I would also focus on systems that do that for your teams. They extract out the insight, the recommendation to improve production versus your teams having to build that out or figure out how to go extract that insight.
So if you can find technologies that make it a more turnkey ability to extract out the insight and the action from the data. I think that’s where you’ll drive success faster.
That’s so key. No doubt. And Brandon you’ve really walked us through a lot of really good information, knowledge for our listeners today. We call it EECO Asks Why. We’d like to wrap up with the why. So from this topic of prioritizing technology for 4.0, why is having that clear roadmap so important?
Yeah, there’s, always major shifts within industries and we’re definitely going through one right now in manufacturing, when it comes to digital transformation, industry 4.0, smart manufacturing. And I see this initiative as probably the most important thing when it comes to continuing to innovate and differentiate manufacturer’s capabilities and grow their customer value.
At the end of the day, it all has to come back to them providing more value to their end customers. And I truly think this initiative is going to be the biggest thing to help them grow their customer value. As we all know, technology only accelerates the pace at which things change and therefore, having a clear roadmap and making sure you’re staying on the leading edge, is important.
So you can stay in tune with that fast changing landscape. And I think lastly, we talked a lot about how this is very transformative for an entire company. It’s a big shift, big impact, and it’s cross-functional team. And because of that, it’s very interconnected as far as the plan, the dependencies, the resources, the technologies.
And so having that roadmap ensures that you have an interconnected plan that is providing value in several different areas of the organization. And is continuing to evolve over time.
Right. I love it. That was, that was great. Thank you for summarizing that up. Ton of value here for our listeners, Brandon. You definitely are our top of your field. So thank you for taking the time with us today on EECO Asks Why, buddy.
Appreciate it, Chris. Thanks for having me.