The real reason manufacturing digitalization fails
The truth is that most manufacturing organizations are effective at manufacturing and extremely bad at digitalization. Why is it that manufacturing digitalization initiatives fail so often?
Money
You never have enough budget to do what you want, right? But budget isn’t the main differentiator between success and failure. If it were the case, every multinational would have cracked that nut by now.
And to make things even more complicated: more money typically means more budget approval steps, you need to come up with a clear ‘plan’ with ‘milestones’ and ‘resources’ etc. All things that work counterproductive when exploring the unknown depths of (industrial) digitalization.
Conclusion: More money won’t fix everything
Technology
We like to pretend we’re on the cutting edge, but let’s be honest. Digitalization of manufacturing is at least 10 years behind other sectors. We struggle to get mobile devices in our plants and think we’re modern if we put virtual machines in the cloud.
The technology we use is proven and to be frank… old by modern standards. New standards are dreadfully slow to be considered and implemented on a miniscule scale, typically showcased when we build ‘a plant of the future’.
So another one that we can forget about.
Conclusion: I wish it was a bottleneck, but technology is clearly not it!
Talent
The talent war is fierce and attracting IT profiles to manufacturing is hard. If only we had the smartest developers…
But just as technology isn’t the bottleneck, neither is talent. Certainly you’ll need smart people, but having the very best isn’t as much of a deal breaker as you would think. We’ve seen groups of ‘average’ people achieve superb results, and groups with super talented people fail.
It’s also a catch 22. You’ll attract and retain the best only if you can keep challenging them. The best won’t come for your first dashboarding project, no matter how pretty your slides or high your ambitions are.
Conclusion: Nope, talent isn’t your bottleneck.
Organization & Culture
You guessed it. This is the one 🙂!
All the money, talent and technology in the world is meaningless if your organization and its culture aren’t working in your favor.
The problem is, especially for manufacturing, that too often they’re stuck in old ways of thinking. That same production mindset that made them so successful is also completely inadequate when it comes to digital transformations (we wrote this article about applying an Industry 2.0 mindset to 4.0 problems).
Lack of people focus
Of course your company cares about its people, but this goes further. Too often do companies - large and small - see people and the work they deliver as assets, resources, machines. And they manage them likewise:
Optimizing and pooling knowledge to ensure people have 100% utilization rate (or 110% if you push them past their engineering limits),
Split people over several ‘projects’ (Do you also have people assigned as 0.1 FTE to 20 projects? Did that really work out for you and them? Did you ever consider how much of their time is wasted in meetings?),
Well structured process and detailed planning with the goal to minimize risk,
A strong project management culture,
CAPEX driven: we minimize OPEX to free up cash to fund more CAPEX.
And we could go on for a while…
Not managing complexity where it occurs
Do you really empower your teams to take decisions without the need for management? Or does management want to have a say in everything? Do you encourage your teams to break down organizational silos?
We do understand you: it is scary as a manager to give up control. It means accepting that your teams will make mistakes under your watch. But the alternative is worse with you making even bigger mistakes and being their bottleneck.
Short term solutions, long term problems
“Can you do it later, we don’t have the budget for it now?”
“Let’s not solve this now, we need to deliver this project by this quarter.”
We all know these ‘laters’ never happen and only mean you’re accumulating technical debt until it explodes in everybody’s face. If you can’t balance the short and the long term you end up paying for it one time or another.
How to solve this?
The bad news: it can be very hard work, there’s no standard recipe and it requires management to be on board.
The good news: you’re not the first, you’re probably even late to the party.
You’ll need a proper digital transformation on all levels of your organization.
This is the reason David and I are so enthusiastic about agile ways of working and organizing (in the broadest sense of the word). It just works so much better and once you’ve tested it, there’s no going back.
There’s no way we can summarize it all in one single paragraph, so we’d rather give you some recommendations to get you started:
Check out our book summary: “The IT/OT Book Library”
Follow some of our favorite writers:
Listen to one of these podcasts focusing on Agile and alike:
Make sure to subscribe, we are preparing a couple of dedicated articles to these new ways of working, focusing on Agile, DevOps and more!
Review one of these previous articles:
