We concluded the second part of the production digitization guide with the black box. What is this black box? It’s your company, seen from the furthest possible perspective – without nuances or problems at individual workstations. It’s a box where orders come in on one side and products come out on the other. And money – because that’s what it’s all about in the end
Spis treści
Outline of Details
Looking inside the black box, we’ll see… more black boxes, such as planning, production and everything that supports it (logistics, purchasing, maintenance, quality, HR, safety, etc.), marketing, sales, and other processes. It’s at this level where serious disruptions can occur, mainly in information flows between silos, and these will be the main source of problems at this level. If we were to translate this into mechanical terms, the lack of synchronization between system components can lead to various collisions, jams, and other undesirable effects that will paralyze the entire system to the greatest extent.
There is, however, a consolation: without looking into individual silos, it’s quite clear at their interface what information should be exchanged between processes and when. And it’s right here, before diving deeper, where you should create a plan for information flow between processes. Goodbye silos!
From the production perspective, anything that could delay or interfere with it in any way should be noticed and eliminated. This will enable synchronization of work between departments and subordinate their work to production. Everything that happens inside individual departments from this perspective is less important and should be treated as such. It’s around the exchange of information with production that priorities should be set within each supporting process. How to conduct such analysis? A SIPOC tool will be useful to determine not only the direction and timing of information exchange but also to define the criteria that information should meet to be useful and not become a problem itself.
Entering the Silos
Finally, it’s time for production itself. Other silos should be treated similarly, but remembering the order. Since production is the priority, it should set up the information exchange plan with other processes, and they should conform to it.
Let’s enter the “production” silo and see what’s inside. To avoid drowning in details immediately, let’s assume we’re entering from the top, seeing entire processes first rather than individual workstations. We have lines or cells that have a plan, have specific parameters to execute that plan, and very often, despite everything, are unable to do so.
Disruptions occur somewhere between input and output, and from this perspective, we’re still not interested in anything happening inside the machines, because it’s the process as a whole that fails. Here, we still only need photocells, buttons, or other “primitive” counters to see where delays and efficiency drops occur. Flow in the process is indeed linked to resource efficiency, but only for some resources. Namely: the slowest ones, or so-called bottlenecks. These will determine the efficiency of the entire process.
It makes absolutely no difference where the bottlenecks are physically located in the process: at the beginning, middle, or end. Wherever the bottleneck is, the line will work as fast as its slowest part. And from this perspective, we should only be interested in this resource, the bottleneck, because any improvements made in any area other than the bottleneck are a pure waste of energy, time, and money, because… they won’t really speed anything up.
Bad news for the popular “kaizens”? Yes, bad. Uncoordinated improvement projects, for which we often pay employees bonuses, miss the point unless they address the bottleneck, so it’s worth considering either abandoning such tools or at least ensuring that only suggestions concerning bottlenecks are even considered. This will help filter out worthless pseudo-optimizations that only “make KPIs” and are bragging points at conferences but bring more losses than benefits. I’m sorry if I disappointed you here.
So at this level, we’re only interested in identifying bottlenecks and assessing whether improvements around them have brought real improvement, manifesting in an extremely simple indicator – increased output per unit of time. Not from a resource. Not from a machine. From the entire line. Because we’re not interested in increasing work in progress, but finished products that can be sold to customers and turned into money. Work in progress is frozen capital. Yes, yes, sales again.
And Finally, the Machine
If you’ve been waiting since the beginning of this article for terms like OPC, Profibus, Interbus, and other exotic protocols, it’s time to address this issue. Inefficiencies in processes, as you can see, occur at much higher management levels. They most often result from poor work organization and poor communication, not from problems with machinery or its parameters. From a business perspective, data from controllers or SCADA systems is nice to have, but strategically not crucial.
This is paradoxically quite good news, because considering the costs of speeding up machines compared to simple organizational changes, it’s better to slightly change the hall layout or supermarket organization than invest millions in “shaving off” a few seconds from the machine cycle itself. Value adding in production process lead time usually doesn’t exceed 5% of total time, so improvements made in this 5% area will simply have minimal impact on total lead time. It’s easier to eliminate downtime caused by, for example, late material delivery, than to buy a second machine or speed up the old one and recover relatively little from it.
So is it not worth collecting this data? It is, but certainly not at the beginning, and we must remember that compared to process data, they have little impact on business. So if you’re starting digitization by connecting all machinery to SCADA or OPC, consider whether this money could be spent more wisely and with better effect for the organization.
When do technological data become important? For example, in case of quality problems. It’s worth correlating process disruption with some machine state or settings. This can help eliminate such problems in the future, but recording all information from all machine controllers because we might someday figure something out from it is pure wishful thinking. You’ll spend lots of money storing terabytes of useless information, backing it up and archiving it, and probably never use it. Machine data is worth keeping only during anomalies, and to detect these, we only need process data, which serves as a kind of vital signs record for the process, just like an ECG.
The Human Factor
Alright, now that we’ve looked at digitization strategically, assuming we should start it from a bird’s eye view, lead along the main process and first take care of the ECG, and only then go into details, it’s time to get to work. Right?
Well, if it were that simple, I wouldn’t have anything to write about. If you notice certain similarities between the digitization strategy I described and the strategy of implementing Lean in an organization, you’re not wrong. These are essentially the same strategies, differing only in where information is stored, but the sequence of actions and organizing the process from general to specific are identical in both cases. Standardization is also very important, accompanying such a strategy, and from a digitization perspective, it’s absolutely crucial because IT systems must operate according to clear algorithms and there’s no room for “I don’t know” or “sometimes this way, sometimes that way.”
I’m bringing up these similarities between digitization and Lean for another reason too. Every Lean project will fail without top management commitment. The same will happen with a digitization project. Top management must deeply believe and be the first willing to use the new approach, which doesn’t mean they have to carry out these activities themselves. However, they must support them with their authority and, above all, be deeply convinced of them themselves.
What does engaged management provide? It removes obstacles, legitimizes actions, but when necessary, can also impose its will. Because there will be resistance, and at every level.
Digital data, like well-functioning lean, strips the organization of decorations. There’s no room for “painting the grass green,” coloring indicators, covering up one’s own incompetence. And these are, contrary to appearances, not such rare phenomena, especially in the corporate world, where a large number of people and strong specialization often favor pretending to work or allow creating comfortable “storage spaces” for not-so-competent employees, whose protective umbrellas suddenly disappear.
Managers may fear being held accountable for rapidly deteriorating indicators, or that their low competence or deliberate slowing down or hampering of certain things will suddenly come to light. But managers won’t be the only ones with concerns. Production workers may fear increased norms, increased duties, or other consequences related to too much downtime, low efficiency, or excess quality defects.
The age barrier might come into play, with longer adaptation time to new technologies. This can raise concerns among older workers about the consequences of too slow adoption of new tools or even inability to master them, including job loss. And there are industries where the influx of young workers to the market doesn’t balance retirement departures, and especially in these, older workers’ feelings must be taken into account.
Finally, there are habits and simple resistance to change. In every group, there will be skeptics, and if there are enough of them or they have a strong enough influence on the rest, their actions can pose a serious challenge to the digitization project.
All of these problems will require attention and individual approach. Board support and appropriate empowerment and decision-making authority given to people implementing such a strategic project as digitization undoubtedly is, may prove crucial for its duration, effects, or even the success of the entire initiative.
Epilogue
The above article suggests that enterprise digitization is a large and very serious project requiring enormous commitment, many analyses, and involvement of all departments and decision-makers in the company. Because that’s exactly how it is.
A sufficiently global view is necessary to organize the process, the ability to go deeper and deeper to the level of machines and operators, soft work in the area of change management, and board support. It sounds like a powerful challenge and there’s no point in pretending it won’t be. Better to realize this earlier and tackle it appropriately than be surprised halfway through, burning the budget and leading to general discouragement. So why do it?
In competitive markets, you simply can’t not do it, because if we don’t, the competition will. The benefits of improved information flows, quick and trouble-free access to answers to almost any question, create completely new possibilities both in terms of increasing capacity and better, faster, and more efficient response to market changes.
Properly implemented digitization means the possibility of better management in virtually every aspect of the company, inventory reduction, capacity increase, time reduction, and the ability to bring products to market faster. There are also industries, usually quite narrow niches or new markets, where demand so exceeds supply that the generated absurd margins can cover any inefficiency. Such companies have less pressure for improvements, but this is short-sighted thinking, as niches either end sooner or later, or a player enters who, thanks to higher operational efficiency, can spark a price war that the sleepy status quo maintainers may simply not survive.
So regardless of what niche or industry you operate in, consider wise digitization today. If competition isn’t breathing down your neck yet, all the better. You’ll gain the comfort of conducting such activities calmly and with more thought, and the advantage built this way will allow you to maintain or improve your position and protect you from unexpected scenarios. Especially in times where not only competition but unforeseen phenomena like pandemics, wars, or economic crises can change the picture in a split second. Organizations that can quickly react and adapt to changes gain through digitization a kind of life insurance policy.