Several years ago, while interviewing an engineer at a large manufacturing firm about the then-new trend of connecting plant floor manufacturing execution systems (MES) to enterprise resource planning systems (ERP) via Ethernet, I asked the engineer what it would take for this trend to become more widespread throughout industry given its clear business advantage. Before revealing his answer, you should know that, at the time of the interview, there was heavy resistance among manufacturing engineers and operators to the use of Ethernet on the plant floor. Considering the predominant mindset against Ethernet on the plant floor at the time, the engineer’s answer to my question was particularly blunt. He said: “A lot of engineers are going to have to die.”
Of course, he was not suggesting the murders of the engineering cognoscenti at the time, but he well understood how difficult it could be to change industry mindsets when it comes to new technology adoption.
Now that Ethernet has practically become the de facto plant floor network across much of industry, the intransigence of many engineers against Ethernet just a little more than a decade ago sounds almost ridiculous today. And though the fears about Ethernet use on the plant floor have largely subsided, the general industry mindset about investing in and adopting new technology has not changed much.
A decade ago, it was Ethernet that raised plant floor concerns. Today it’s the cloud, Big Data, digital manufacturing, and the Internet of Things. Adding to manufacturing engineers’ historic trepidation around new technology adoption is the front office’s growing aversion to risk. In fact, a KPMG report states: “Many manufacturers now sit on significant amounts of cash but are almost too risk adverse to deploy it by investingin innovation and product development, strategic acquisitions or new markets. Manufacturers simply can’t afford to sit still; they need to focus on risk management rather than risk avoidance or they will be left behind by bolder competitors who aren’t afraid to invest in the future growth of their business.”
As KPMG noted, while some manufacturers are held back by risk aversion and uncertainty about new technologies, others are blazing ahead with new investments and initiatives. Though it might sound as if such trail blazers would help light the way for the rest of industry, in many cases manufacturers are feeling that, if they can’t keep up, why should they even bother trying.
This cynicism is adding to “decision paralysis in some companies, driving decision makers to hesitate when faced with investing in new systems that could be outdated shortly after implementation,” says Larry Korak, industry strategy director at Infor, an enterprise software supplier.
Korak says the way forward for manufacturers wanting to take advantage of technology modernization is to “plan an overall strategy and work toward long-term goals.” He offers this three-point guide toward organizing such a strategy:
- Prioritize cloud-based solutions. Cloud deployment solves three important issues for manufacturers: Cloud-based solutions are agile, fast to implement and are always modern. The burden of staying current on updates, security and upgrades falls on the cloud provider, not on you. Your organization gains more bandwidth to focus on innovation rather than maintenance.
- Choose hybrid architectures to get the best of cloud and on-premises deployments. An organization can host an application such as ERP on its premises and use cloud-based solutions for fast-changing connected components such as extended supply chain management and inventory management.
- Look for solutions with open, standards-based, highly flexible architecture. Any new solution should integrate with legacy and future components. Important standards include an HTML or XML base for easy integration, real-time data availability, and the ability to mobilize data across different kinds of devices and operating systems.
Though these points clearly address specific steps to achieve specific goals, the issues of risk aversion in the front office and on the plant floor will likely remain. “You have to modernize not just your technology but also the mindset of your corporate culture,” Korak says. “Digital business is a team sport, and the CEO should spark the collaboration needed by setting the digital vision. That means new training and education are required to ensure new ideas are embraced, rather than resisted.”
Another tactic involves attracting people to your organization who will take it forward. For many manufacturers, this means making sure you have current software in place. It’s more important than you might think, Korak says. “The youngest generation of workers—18 to 35 years of age—have grown up with smart phone apps and modern web interfaces,” he says. “They see no reason to deal with green screens in the workplace.”
Korak references a recent Mint Jutras report noting that “millennials are twice as likely as older generations to seek different employment if software at work is outdated and difficult to use. To attract and retain new talent, it’s critical to modernize,” he says.