The Digitization of Manufacturing Starts in the C-Suite

January 8, 2018

Manufacturing is dirty.

Manufacturing is unsafe.

Manufacturing is boring and has long hours.

The list of negative press for manufacturing goes on.

After decades of antagonism, the digitization of manufacturing is the next great hope for a resurgence in the industry.

While manufacturing is said to lag behind other industries in the application of innovation, early adoption of emerging technologies will elevate it into a leadership position — so long as C-suite executives pay attention and call the right shots.

Here’s how manufacturing leaders can foster transformation to improve cost-effectiveness and efficiency.

Elevate Expectations of What’s Next

The digitization of manufacturing starts with education and training for senior and technical leaders. This instruction creates the level of understanding and excitement necessary to put life into new concepts.

Seek out resources like IT companies, consultants, universities and benchmarking leaders (e.g., Rockwell, Siemens and GE) to accelerate the learning curve and help build your company’s strategy for the next 3–5 years.

Don’t overlook the role of human resources. Ideally, the talent required in functions like IT, engineering and accounting is already in place. But manufacturing leadership needs to be a part of this list within the next 6–12 months.

There’s already a chronic skills gap in manufacturing, according to Bloomberg Businessweek, and of the 3.4 million jobs expected to become available in the sector over the next decade, up to 2 million could go unfilled.

The skills necessary to survive and grow in a digitized shop floor are primarily new and will require technical degrees. Develop specific position descriptions to share with local colleges, tech schools, manufacturing organizations and chambers of commerce to create a new awareness and sense of urgency for future needs.

Upgrade Soft Infrastructure

Manufacturing leaders can create new expectations and a new sense of urgency to prepare for the power of innovative technology. But they also have to shift paradigms on the systems already in use.

Here’s where to start:

  • Blow up outdated, wrongheaded programming of vanilla enterprise resource planning (ERP) systems. Reshape standard cost systems to get more accurate costs of the winners and losers in the product portfolio. After all, standard cost systems tend to understate costs for the losers and overstate costs for the winners.
  • Lean accounting has such a bad connotation that just mentioning the term could get you tossed from the CFO’s office. Call it “value stream accounting” and educate up with data on why it’s a much more accurate way of running the business and guiding sales and marketing decisions.
  • Re-do bills of materials and routers to the fewest possible number of levels (a flat structure is best) while staying consistent with manufacturing processes. Evaluate all “bolt-on” and standalone systems and begin work on integrating the data flow into the ERP system — or eliminating satellite systems entirely.
  • Evaluate the need for equipment upgrades with engineering and manufacturing help. Significant capital investment is likely, especially for factories that lack newer-generation machines and controls. You should be able to envision a time when the programmable logic controller of the machine will communicate directly with ERP systems. In other words? Real-time data collection and analysis.
  • Artificial intelligence will be involved in the next decade as well. If you have any analog machines still in use, put their digital replacements into the next capital spending cycle. Move down this path as aggressively as possible, and as financial resources allow.

Turn Negative Media Into a Positive Voice

It’s time manufacturing leaders started blowing their own horns about the great careers available in manufacturing companies — from the shop floor to the C-suite. Every company has public relations contacts, either internally or with outside sources.

The new jobs are creative and require more skill. In most cases, they’re more cerebral than physical. Manufacturing jobs on the shop floor today still pay far better wages than service-industry jobs, and that will likely only get better. As the technical skills of employees improve, so will their pay.

Continuous improvement initiatives over the last 30 years have helped substantially improve working conditions in factories: order of magnitude improvements in safety incidents, considerable reductions in inventory and higher employee engagement.

But now a new type of change is afoot: the digitization of manufacturing. The press is in, and today is an exciting time for a career in the industry — and the support starts in the C-suite.