From Lean to Smart: Building the Factory of the Future

Welcome to the Industry 4.0 Club's fireside chat. The club's purpose is to engage the power of diverse worldwide talent to accelerate the global evolution to Industry 4.0. We accomplish this by hosting and supporting thoughtful, respectful, and interdisciplinary open conversations and creating quality content on wide-ranging Industry 4.0 topics to expand the reach of our community. My name is Mike Ungar, and I'm the CEO of the Industry 4.0 Club. I have over 40 years of leadership and management experience, with most of that experience in manufacturing at Michelin. I'm joined today by my co-host, the chairman of the club, Mike Yost. Mike, would you mind introducing yourself, please?

Not at all. Thanks, Mike. Welcome, everybody. As Mike said, my name is Mike Yost. I've been in industry a little over 35 years myself, first half on the solution provider side and basically the last 16 years plus on the nonprofit side. One of the co-founders of the club, Mike's co-host here on the fireside chats. And as Mike said, we like to engage diverse worldwide talent, so we're really super excited that we have Konrad Leyva with us from SESAME, the Smart Manufacturing Institute, and Tim Stewart, the president and founder of Visual Decisions Inc. These 2 gentlemen are going to be leading 2 workshops at the MD&M Midwest event in Minneapolis, Minnesota on October 27th. One will be diving deeper into lean and smart manufacturing synergies, and the second will be smart manufacturing, why it matters and how to achieve it. Mike, you want to tell us a bit about the event they'll be at?

Yeah, thanks, Mike. The MD&M Midwest event is one of the premier events for professionals and businesses to advance manufacturing, medtech, and critical industries. Education at MD&M West Midwest— excuse me— goes beyond presentations. From immersive workshops and expert-led conferences, workshops like these 2 gentlemen are going to lead, to live demos and show floor sessions, MD&M Midwest gives you more than insights. It gives you real-world experience to implement into your daily operations as soon as you leave the show. Every session, every workshop and keynote is built to help you think bigger, work smarter, and lead the future of advanced manufacturing.

Thank you, Mike. So just a little bit more about our guests here today before we jump in. Konrad Leyva is the Vice President of Ecosystem and Workforce Development at SESAME, which is the National Institute on Smart Manufacturing. He's also a recognized thought leader in advancing smart manufacturing adoption. Konrad brings together manufacturers, technology partners, educators, and practitioners to shape how industry understands, applies, and builds the workforce capabilities needed for the future of manufacturing. And Tim Stewart is the founder and president of Visual Decisions, Inc., a close partner of Conrad's and also a thought leader at the intersection of Lean, Six Sigma, and smart manufacturing. So for more than 25 years, Tim has helped organizations across industries apply emerging digital technologies and capabilities to transform their business processes, reduce waste, increase throughput, and deliver measurable operational results. There are likely not 2 individuals in industry I trust more than these 2 fellas. So gentlemen, welcome to the club.

Thank you.

Thank you.

It's really good that you— I really appreciate you guys taking time out of your schedules to talk with us today. So let me just jump right in and maybe, and, you know, maybe we'll throw this one to Tim to start. Just, Tim, when you think about lean and smart manufacturing, you know, a lot of folks treat these as competing approaches, one focused on process discipline and the other on technology. From your perspective, why is that a false choice, and how can manufacturers use digital capabilities to actually enhance and make lean even more powerful?

I always like to answer this question with an analogy from just personal life. I've been wearing a Fitbit for 14 years now, and it hasn't really helped a whole lot. I weigh 20 pounds more than I did back then, and it's not the Fitbit's fault, right? It's a great piece of technology. It's basically a fancy IoT device. It has advanced sensors, collects that information, pushes it to the cloud, uses AI to turn that into footsteps and heartbeats and sleeping patterns and everything else. But if you don't change your behaviors, if you still do the same thing tomorrow that you're doing today, you're not going to get any benefit from those new capabilities that you have from the technology. And it's the same exact thing on the shop floor. You can put all these IoT devices out there, You can put all kinds of advanced sensors and create pretty charts and graphs and have that be available through phones and everything else. And if you fundamentally don't change the process, if you still do the same thing tomorrow on the shop floor that you do today, you're putting those capabilities out there and you're not getting any value from them. So the way that I look at it, you have to combine the technology with the process improvement, with that change in the organization in order to drive the real value that you're looking for from putting that technology out there in the first place.

I want to know why Conrad laughed when you started telling your story about the Fitbit and gaining weight.

I always wonder where he was going. I mean, I don't use one of those. But I know, Mike, and I know you have your stories with your ring. But so, but I'm going to add to it. I'm going to avoid the tangent of the Fitbit.

It's not a tangent.

It's an analogy. But the truth is, is, is, Mike, that leaders are that are combining lean and digital. I mean, if you're just doing lean the way you've always been doing it, you're missing out. If you're just doing digital and not bringing lean into it, you're missing out on the opportunity of bringing them together. A Gartner survey recently showed that over 70% of industry leaders were continuous improvement and smart manufacturing initiatives, right? That we have seen similar results from LNS Research, from Deloitte, showing that the leaders are combining and achieving much greater results of doing them separately. I mean, the numbers are like over 20% greater results. So greater results is really why you should be combining these 2 techniques.

So how, you talk about the leaders, like, is this essentially a leadership discussion then, right? Like, what's separating people that are succeeding, leaders that are succeeding, of connecting the technology investments to their business strategies, measurable outcomes? Like, how do you advise people to move forward?

Well, I said leaders just because a lot of the surveys from Gartner's LNS, Deloitte are really surveying top manufacturers, large manufacturers, and then they're saying, among all of those, we see that the ones that are leading the pack in terms of their results are the ones that are doing XYZ, like combining these strategies, right? But you make a great point that there is a leadership component to all of this. Also, and a lot of it starts at the top with, with a new mindset.

Yeah, go ahead, Tim.

To add on to that point, Lean is a team effort. You cannot succeed in Lean without alignment at the top, as well as throughout the organization down to the operators. I shouldn't even say down to the operators, through the operators.

Right.

And it's the same thing with digital. In order to succeed with digital, you not only need that participation at the top levels, but you need people changing the way that they do their work all the way through the organization to really embrace the different use cases that are possible out there and to change, fundamentally change the way that you approach the work.

Yeah, so let's take this another step further though, because a lot of folks, a lot of manufacturers have invested in Industry 4.0 and did in dashboards, automation, connected equipment, but they haven't seen the result, the business transformation they expected. So talk about what separates true smart manufacturing from simply adding technology, more technology, and how should leaders really connect these investments in technology to their business strategies to get these measurable outcomes. Conrad, do you want to jump in on that?

Look, it's great that we're putting all these dashboards in place, but one of the things that— but we shouldn't stop there. We can't stop at where there's the thought that if we put the dashboards and everybody can see the numbers, that it will automatically lead to improvements. But the truth is, if we're still operating in a reactive mode, just waiting and reacting to the numbers that are showing on the dashboard, then that still doesn't take us over the bar of smart manufacturing. Where we want to move is to proactive methods where we're using AI, where we're using analytics to anticipate issues, to look at where the trends are taking us and anticipating issues before they happen. So we're not reacting to them, but we're avoiding them and recommending corrective action even. So even being— so that's about being more proactive and more prescriptive. And that's what puts the smart in smart manufacturing.

And I'll— go ahead, Tim.

I was gonna say, I'll give a couple of specific examples. I had one customer that when I got there, they had implemented some machine monitoring capabilities on a few of their cells and they hadn't seen any improvement. So they called me up and they, you know, asked me to take a look at what was going on. And what I saw was that they had implemented this on just their strategic assets to see what was happening on those machines, but they hadn't said, okay, the supervisors are going to change the way that they're doing work because it was only on a couple of different machines and the supervisors had, you know, 50 that they were looking at. And so they didn't fundamentally do anything differently than they had been doing. They still ran their shift change meetings the same way. the operators the same way. The standard work was never updated for how that new capability was going to be incorporated in. Maintenance didn't really change the way that they did their job because those were 2 machines or 3 machines out of an entire floor worth. And so maintenance never looked at that data. And so because that wasn't integrated into the process, because it wasn't part of the CI initiative and so forth, it never really gained any traction with the people in the organization. A counterexample to that is I had a company that implemented this on a couple of production lines, and what they did was they implemented TPM Tuesdays, where every Tuesday they would shut those lines down for a period of time And they would look at the data as a team and then implement some change that addressed whatever were the top issues from that previous week. So they integrated that data directly into their continuous improvement program, and they saw tremendous results from those pilot lines and then moved that process across the entire plant.

So can we stick with that for just a second? I'm sorry, Conrad. So you're talking there potentially about the, you know, the operations team and maybe the continuous improvement team, right, that's coming in for those types of things. Are you seeing collaboration across other parts of the business? Like we talked about leadership, but what about how we're compensating people or how managers manage and things like that, right? Are we seeing people or organizations that are really embracing You know, the, you know, go back to your Fitbit analogy, that the things you're learning in the operations and the impact that they can have more broadly across the entire organization.

Certainly that company that was doing the TPM Tuesdays, they had that integrated across the entire organization. So they had quality participating, they had engineering participating, maintenance, as well as management looking at that information and participating in those improvement events and so forth. With other organizations that haven't taken that same kind of approach of merging the SMART and the Lean together, I haven't seen that, and that's been a major gap.

Right, well, that's a great takeaway there. Go ahead, Konrad.

Well, I, I want to say that what, what Tim— and I want to come back to dashboards just real quick, but I don't want to lose track of this mindset and culture. I mean, the idea— because what Tim is showing is the new culture in that company. So in highlighting the importance, Mike, of what you were talking about, to get increased collaboration, this attitude towards more cross-department transparency, it's really a cultural change that needs to come with the technology change to really make an impact. On the dashboard thing, I just wanted to tell folks, this is actually an area that we spend a little time on the workshop. And, and that because a dashboard done wrong can actually set you back backwards. It's like, it could be worse. So we've seen where, where people get a little crazy with, oh, oh, God, it's so easy now to put all these metrics on this digital dashboard, and they can end up with information overload. So one of the things we talked about is, this is examples of dashboards done wrong, done right. And, and to focus on a few metrics that really matter, a few lean metrics, you know, around what the customer cares about— cost, quality, and schedule. So, so we have examples of that in the workshop, and I just wanted to plug that in there.

That's great. And just to that point, I just want to jump in quickly and remind everybody that we're talking with Konrad Leyva from Sesame and Tim Stewart from Visual Decisions Inc., ahead of their workshops that they're running at the MD&M Midwest event in Minneapolis, October 27th. So one on diving deeper into lean and smart manufacturing and those synergies, and the other around why smart manufacturing matters and how to achieve it.

Yeah, thanks, Micah. We talked to— both of you talked a lot about the need for the level of engagement and really being proactive at bringing these things together. So you've talked about this big need for this alignment really with people, processes, and we talk about the IT/OT divide, but bringing those organizations together as well. What other changes, organizational or workforce changes, do you see as being most critical to actually make that happen, to bring the results that you're talking about? If employees are concerned about the impact that technology or AI and automation might have on their jobs and their work, how should that all be addressed?

Do you want to go first, Conrad?

Okay, okay. So this is a workforce topic. Look, one, one of the things that we need to recognize is that I've seen studies between 70-85% of the workforce will need new skills, many for their new roles in the next 7 years. So We're going through a massive change. AI is part of that, but it's not the only technology that's causing change. There's a lot of need for new skills. So we're really asking manufacturers to, to work on that, make that formal part of their strategy, you know, so you need new skills with industrial IoT, data protocols, APIs, integration for your implementation teams. You know, for example, Sesame has that new i3x API, and we're training people on it. But we need to recognize that we're entering a mode now where it's the continuous learning is very important, where nurturing the career pathways of our employees is very important. And we're going to need to show that we're willing to invest in our workforce to really attract that new talent and retain it. in these manufacturing jobs.

Conrad, could you stick with that for just a second? I'm wondering when you hear something, I think you just said the 85% number about new skills, right, for working in the future workforce in manufacturing. That sounds pretty stark. That sounds kind of scary, right? But how much of that is different from any industry, right? Like where everybody's learning to be digital, all industries are being— so is The general baseline, 65%. And so it's not just manufacturing that's—

I don't— this is a great point, Mike. I don't think it's just manufacturing, right? It's just that manufacturing is also getting influenced. And we can't fall behind. And in other career pathways and other businesses, they're moving faster, and they've made training part of it and new skills. It's just in manufacturing, We tend to react a little slower. And if you're not implementing new methodologies, training your personnel, you're just falling further and further behind. And we're going to start seeing the gap of the companies that are ready, that are data ready, that are ready to participate in this new connected ecosystem among manufacturers, suppliers, service providers, and those that are not ready to participate in these connected ecosystems, the gap is going to get bigger. And some people are going to drop out because of it. They won't be able to get those new contracts and, and be part of the ecosystem. We need to help them move forward.

You know, the, the— it's a great point. I think I think that we hear a lot about the changing nature of work today, but sometimes we don't take a moment and pause and realize— I always like to tell the story when I joined manufacturing in late '84, we had one computer in the plant and our machines were controlled by pneumatic controls. Think about where we are today. There's a computer on every machine and you have PLCs and It's just, it's normal. And I think we get stuck in the moment and don't realize that that's the evolution of manufacturing broadly. So it's a, you know, people, you know, but companies have to embrace that and say, how do I help bring the workforce along? I think your point's absolutely correct.

Well, and I wonder, it really makes me wonder, like, how hard is it to lead? Like, if the whole world's becoming more digital, Right, and we say that manufacturing is becoming more digital. How hard is it to lead? Because your workforce may come in, like the future workforce is going to be more digitally savvy and capable every year that things progress. So how hard is it to lead a digital organization or a digital workforce if you yourself are uncomfortable, you know, defining, you know.

Oh, I mean, to Mike's point, is that really different than what it has been? Um, you know, as we've gone through the workforce, uh, a lot of the leaders that we've worked with in the past weren't as technology savvy as we were. Whether it was just basic computer skills, networking, some of the advanced IoT, some of the, you know, machine learning and AI that, you know, has been growing over the past, you know, 10, 15 years and so forth, they haven't had that same level of sophistication. So as this generation is moving into those leadership positions, You know, they may not have the same level of skills as some of the people that are entering the workforce today, but I don't see that as fundamentally different from what we've had in the past. Now, which technologies and so forth are current and lagging and so on is different. But, you know, those challenges have been overcome in the past. And as a leader, you don't necessarily have to know all of the details of the latest technologies. You just need to be able to, uh, have your people understand it and then have trust in the people that are current on all those technologies and be able to, uh, lead and direct them as generations have before you.

Mike, I, I thought of a quote I heard recently I love. Innovation is happening in manufacturing, one retirement at a time.

Oh, geez.

So, but the truth is, we need to merge, right? We need to merge that experienced workforce with the new talent, or we will lose a lot of that knowledge. And so there's a sense of urgency because People are retiring very fast. And we need to really bring that new workforce and have them learn a lot of that experience from, from our more senior personnel.

Well, so I guess that's actually kind of encouraging, right? Like, you know, leaders can lead. And it's always been that way, right? The folks coming in behind you know more about the current state of technology than you do. And that'll continue to be the way so that That should be encouraging, I would say, for manufacturing leaders. But one of the things that I credit you guys and your work, both individually and with your organizations, with doing is really helping people understand how to move forward, right? And so if you have a manufacturing leader, and I always use the word leader, like not necessarily talking about a business owner or top-level exec, but anybody who's trying to move the company forward and move their plant forward. You know, what if they're just overwhelmed by, you know, how much technology is out there, how many different places you could start? You know, what practical steps can you guys point to for them to figure out where they are, paint a vision for where they want to be, and identifying the right places to get started?

I feel like you're throwing a softball out there for me.

It's a nice big Juicy stuff.

One of the things that SESAME offers is a smart manufacturing roadmap capability, and this is an engagement. It's not a heavy lift for an organization, but we have facilitators available. Over 100 have been trained in the process at this point to work with manufacturers of all the sizes and shapes to look at what is their current state, what could they do from a possibilities perspective, what would that be worth to their organization, and then prioritize that into an actual roadmap. And so if you are looking at all of this and feeling overwhelmed, there is help available.

Conrad, would you add anything?

Yeah, I mean, so the whole methodology, right, is about— think about this as a journey. Okay, so not as a one-time project, but as a journey for your next 5 years, 3, 5 years, 7, if it makes you feel more comfortable, but you're going to have to Start moving in the right direction, but establish a future vision. Okay, where you want your company to be 3 years from now? You want it to look the same, or you want it to look a little more modern, more data-driven? So put a future vision in place. We have coaches, we have a lot, many trained coaches in these methodologies to help you establish what makes sense for your business. It's not a common future vision for every company out there, depending on your industry, your marketplace. But, but do then work backwards from that. Okay, what do I need to do today to be there 3 years from, from now? And then once you have that, and you have that whole conversation talking about what you want the business to look like, Then you look at technology, okay. But you might need to do things like training, like education, and then you might need to put some processes and changes in place. You might need to work differently with your suppliers. But and then part of that might be you need to implement some new technologies also, to make sure you have a good data foundation to share data among your stakeholders. But You need to prioritize that journey. Make it a journey and practical milestones along the way and anchor it on a future vision for your business.

I think just to add to your comments there, I think it's also good advice for leaders, manufacturing leaders to create, I'll call it their network of experts. In other words, you know, it's really hard to stay up to date on everything that's possible, all the things that are the tools and the evolution of the tools to help you solve your problems. So, you know, Conrad and Tim, you talked about a strategy, but inside that strategy, it's understanding what some of the tools are after you put the strategy together. And I think, or as you put it together, so I think leaning on your local MEP or other manufacturer support organizations or national organizations like SESAME to help you learn and understand how things are advancing is another element of, I think, success and really being able to drive that strategy to help you solve the problems that you've got and achieve the business goals that you have.

So true.

Yeah, for sure. Well, so we've been talking for the last half hour with Tim Stewart and Conrad Leva about their upcoming workshops at MD&M Midwest. And as we begin to wrap up this conversation, maybe I'd like to ask you for maybe a final thought, maybe a thought about what you hope folks will take away from the workshops that you'll be giving. So maybe, Mike, your quick takeaway, and then we'll go to Conrad and Tim.

Yeah, just a couple of things. I mean, I'll go right back to the top when Tim mentioned that he's been wearing a Fitbit for 14 years, right? Just think of that period of time, right? Right? Like, it's now very common for us to talk about IoT, IoT devices, you know, very, very mainstream, but this stuff has been around for a while, you know? And so I think that's really, really important. And I think to the point of the softball question that we were just discussing about the SESAME acceleration framework and helping people, you know, define what smart manufacturing means for them, I really think what's powerful about it is it's a common language that's being taught all across the country, right? So that people can define what smart manufacturing means for them. And probably this is the last thing, especially if you're a business owner or a leader, part of the journey is to give your people time to meet people like this, to go to these types of events, to get into these types of workshops. Oftentimes people think the journey starts when you buy some tech, and that is not true. true. I would encourage people to make the time to get into the circles with people like Tim and Conrad and come to these events and learn from them in these workshops.

Thanks, Mike. Conrad, how about your final thought for the audience today?

I echo both of those thoughts. Don't go at it alone. Use your regional ecosystem, which includes the coaches that might be available, includes the MEPs, that includes the community colleges that can help train your workforce. Go to cesmi.org, C-E-S-M-I-I dot org, and, and look for resources that are there, examples, webcasts, papers, you know, like the First Principles of Smart Manufacturing, the education catalog, look, see if some, if we have some partners near you. Or reach out to us, reach out to Industry 4.0 group. I just want to echo that there's resources available to help manufacturers along the way.

Thank you. Kim?

Echoing everything that has been said so far, establishing a common language and a common mindset, utilizing the resources that are available to you. And just reemphasizing the point that whether you are technology-focused today and you want to help make that technology implementation more successful, or whether you're process-focused today and you're looking for a way to kind of supercharge those lean or CI efforts, These things are better together than they are separate, and Konrad and I will spend a few hours talking about why that's the case coming up here in Minneapolis.

Excellent, well, thank you. So thanks, Konrad, thank you, Tim, for your perspectives on both smart manufacturing and lean, and just to reiterate, they're going to be leading workshops at MD&M Midwest on October 27th in Minneapolis, Minnesota. We hope you decide to come to those workshops and join them and the club.

If you—

to register, go to this website, www.mdmmidwest.com, and look for education content, look for the workshops, and register. I know that both Tim Conrad and the club would love to see you there. We also would like to know what action you're taking to advance the deployment of Industry 4.0. Perhaps you're going to attend this workshop, read an article, maybe even start a smart manufacturing roadmap like we've been talking about. Let us know what you're doing. Drop us a note on our LinkedIn page, the club's LinkedIn page, or at our website at www.industry4oclub.com. We also hold conversations like this weekly, so if you'd like to be on a future broadcast, have something you'd like to share with an audience, we'd be happy to host you as well. Again, reach out to us on our website or our LinkedIn page. And with that, gentlemen, thank you so much for your time today. We really appreciate it.

Thanks, guys.

Right. Thanks for having me.

Bye-bye.