Industrial companies stuck in their childhood? Grow up!

Just like a human being, organizations should grow up step by step.

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However, many industrial companies are stuck in their childhood. Which phases does an enterprise have to go through before it can call itself mature? Several “capability maturity models” exist, and most of them define five maturity levels.

On the initial level, an organization operates in an informal way. Quality highly depends on individual employees. That is wonderful if you’re an artist, like Rembrandt. But what if the client recognizes operator John’s finishing touch in the final product?

When companies become aware that things have to be done in a more professional and standardized way, they reach the second maturity level. They start to formalize their most important processes, and in normal circumstances, people know what is expected from them. But as soon as unexpected events happen, they get confused. Due to a lack of real-time information and procedures for exception handling, the company is not able to act proactively.

At the third maturity level, companies strive toward repeatability of the end result, and they develop and maintain standard process descriptions. Definition and monitoring of key performance indicators (KPIs) is an absolute requirement for growing into the higher maturity levels (4 and 5), in which continuous improvement is key and operational excellence is the goal.

It seems that about 60 percent of the U.S. information technology (IT) organizations operate at maturity level 1 and 25 percent at level 2. Only a very few companies reach the levels 3 or higher. From personal experience, I estimate that this is also true for European companies, and for industrial enterprises.

Can automation help a company to grow up faster? The rule says that you may not skip a maturity level. So it is better to start standardizing the procedures using paper forms and build local Microsoft Excel and Microsoft Access applications. Experimenting will help you to get a better picture of the best way of working. The procedures have to be rather stable before you can put them into the usually rather rigid automation systems. Automation is not a requirement for reaching higher maturity levels. However, the more complex a company’s situation, the higher the need for information systems.

Growing complexity

In their quest for improvements, departments tend to focus on internal processes. Factories implement historians that collect data in a central repository. The lab purchases a Laboratory Information Management System (LIMS) so analysts can share information about quality tests. And the sales department uses a Customer Relationship Management system that tells them which colleague has communicated with which client about what.

But just as with adolescents, there comes a moment in a department’s life when it starts to realize that it is not the center of the universe. It is not good enough if the department’s results are okay. The company as a whole has to perform well. Therefore, teamwork across departments is required. This means transformation from a silo-oriented situation toward process orientation, aiming at a higher level of internal collaboration.

IT managers should become aware of the added value of their departments in helping companies become best in class. Introducing standard methods such as ISA88, ISA95, SCOR, BPML and Archimate help businesses start defining manufacturing and supply chain processes. They should provide intranet, document management functionality and automated interfaces between applications. Then offer workflow and business process management systems when business is ready to take its first steps into the 21st century. Growing up is not a black art. It can be done.

Bianca Scholten, bianca.scholten@task24.nl, is a Principal at IT integration firm TASK24, in The Netherlands, and a voting member of the SP95 committee. Her books “The Road to Integration; a Guide to Applying the ISA-95 Standard in Manufacturing” and “MES Guide for Executives: Why and How to Select, Implement and Maintain a Manufacturing Execution System” are available at www.ISA.org

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