The Human Factor

March 1, 2004
Maybe it’s because I was in Orlando, but several of the speakers at a recent conference brought to mind a former attraction at Walt Disney World’s Magic Kingdom.

In the ExtraTerrorestrial Alien Encounter, visitors were treated to a creepy experience with an alien, after a demonstration of new teleportation technology goes terribly wrong.

No, I’m not comparing the speakers to aliens. But in the Disney attraction, the teleportation device was developed by a company known as “X-S Tech.” And that illustrates a common speaker theme—it’s not just about the technology (or even, “excess technology”), it’s about the people.

At the ARC Strategy Forum, held in late January in Orlando, automation suppliers, end-users and analysts from host ARC Advisory Group ( addressed best practices for driving operational excellence in manufacturing.

Speakers agreed that technology plays a role in improving manufacturing performance, particularly as a means to achieve better information flow from production systems to business systems. Specific implementations include using fieldbuses and smart devices to improve diagnostics and lower maintenance costs; linking automation systems to enterprise planning systems with manufacturing execution systems and visualization software; and incorporating software standards, such as OPC, for interoperability among applications.

But to leverage automation benefits, manufacturers must change their work processes.

Bert Natalicchio, business group manager for Shell Global Solutions, is on the front line of change management as Shell upgrades its instrumentation networks to smart devices that employ Foundation Fieldbus. Several initial projects have reduced maintenance costs by 1 percent—which translates to $2 million per year per operating unit. Natalicchio attributes Shell’s success to two parts “people issues,” one part technology. “Change management and implementation methodology contribute 50 percent or higher to the success of the project. Sometimes, it’s two-to-one versus technology changes,” says Natalicchio.

Walt Staehle, director of manufacturing execution and shop-floor information systems for Kraft Foods, rates people issues even higher. “I’d say change management accounts for 70 percent of our success; implementation accounts for 25 percent, and technology only 5 percent,” says Staehle. Kraft encourages employees to adopt new work procedures by “letting folks in on the process and rewarding them appropriately.”

When Steve Furbacher, president and chief operating officer of Dynegy Midstream Services L.P., wanted to reorganize his business, he looked at ways to flatten the management structure and speed decision making. Dynegy Midstream Services is a natural gas and liquids company whose 715 “team members,” as Furbacher calls them, helped contribute $3.2 billion in 2003 revenues to parent Dynegy Inc.

In addition to applying dynamic performance management tools from Invensys, Furbacher focused on people issues and organizational readiness for sustained improvement. Here are his four tips to modify behavior:

1. Focus on the right behaviors and the right things will happen.

2. Provide the right information at the right time to enable the right decisions and actions.

3. Clearly define roles, responsibilities and accountability to drive performance.

4. To realize economic benefits, ensure that all employees have skills, knowledge and information and are empowered to execute the business strategy.

New technology has a powerful hold over technologists—it’s exciting, interesting, even sexy. It’s what makes getting up and going to work in the morning fun. But applying automation technology just because it’s new is a dangerous practice.

First, define what you want to accomplish; then determine how you will get there and, finally, figure out which technologies can pave the way. Never forget the human factors that will ultimately decide whether the technology is a success or a failure.