The Internet of Things (IoT) has been the talk of the town for several years. From connected cars to connected manufacturing, some of the world’s largest industrial companies have put next-generation digital technologies at the center of corporate transformation strategies.
Turning the Corner on IIoT Hype
LNS Research has been one of the leading voices in the marketplace promoting the concept of an Industrial Internet of Things platform. We continue to see value in the IIoT platform – its core capabilities around connectivity, cloud, big data analytics – and see it as central to transforming system architectures in manufacturing. But many manufacturing executives have heard enough hype about the IIoT and are now looking for real value.
While IIoT conversations in the past have focused primarily on technology, there has been very little discussion on the role people play in the successful use of IIoT technology, which is an oversight the whole industry must address quickly. Technology is just one of three critical components when it comes to improving performance in manufacturing. To ensure operational excellence, manufacturers need to think not just of technology but also about people and process.
The Importance of the Human Factor
In a recent LNS webcast highlighting our research plans in manufacturing operations management (MOM), one of the topics raised was the creation and use of a new metric: Overall People Productivity. Of all the topics raised, this one got more attention and interest from the audience than any other. In a recent conversation with one of our consumer products clients, the challenge faced was just in this area.
This large global manufacturer had been focused on overall equipment effectiveness (OEE) for many years and had seen consistent improvements in the metric year after year. Unfortunately, this improvement in OEE was not driving a subsequent improvement in plant profitability. Upon examining why these two metrics were diverging, the root cause turned out to be the human factor. Because plant management was driven to maximize OEE and not considering other costs, like labor, whenever there was a maintenance, quality, or efficiency issue detected and not resolved quickly, more labor was thrown at the problem.
Although this particular company figured out that accounting for human factors was critical to performance improvement, addressing these issues was something else entirely. With financial, operational and people information all stored in separate systems, it was difficult to pull together a comprehensive view of organizational performance. That forced this specific company into some expensive projects.
Enabling the Smart, Connected Operator
A better solution would have been for this manufacturer (and others) to take an operator-centric approach to manufacturing performance management and leverage next-generation technologies like cloud, analytics, and mobile in support of the operators, not vice versa. Unfortunately, too many in manufacturing still see analytics only as a solution for machines, and mobility only as a solution for corporate executives and plant management; not operators and maintenance professionals. This is actually the opposite approach of what should be pursued.
When operations personnel are made mobile—or even better, smart and connected—the roles that deliver value to the manufacturing process are enabled to transform from behaving in a reactionary to a proactive mode—the very definition of being more Lean. Of course, enabling smart connected operators is more than just passing out iPads; it is critical that individuals are given the right information at the right time in context and based on analytics. This is only possible with next-generation technology, e.g., consumer-like applications with collaboration, search, analytics, and personalized experiences built in. When next generation technologies are embedded in how operations personnel conduct work and create value, issues can be identified before they occur, improving product quality and reducing equipment failure. People are the central component of this change.
In creating smart, connected operations, it is not enough to have equipment and digital business processes that are aware of design configurations, inventory levels, quality, reliability, efficiency, suppliers, customers, and environmental impact. It is more important to have smart, connected operators that are aware of and can react to all the same things, speeding the transition from real time, to predictive, to autonomous operation.