The Five Promises of Smart Manufacturing

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 respectful, thoughtful, 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 am the CEO of the Industry 4.0 Club. I have 40 years of leadership and experience, with most of that experience in manufacturing at Michelin. I'm joined today by my co-host, Mike Yost. Mike is chairman of the Industry 4.0 Club. Mike, would you mind introducing yourself please and our guests as well?

Sure, absolutely. Thank you, Mike, and thanks everybody for joining us here today. As Mike said, my name is Mike Ghost. I am the volunteer chairman of the organization, one of the co-founders of the club, and I have about 35 years of experience in industrial automation, industrial software, what today we call smart manufacturing or Industry 4.0, and Fortunately, throughout my career, I spent a good bit of it working with Mr. John Dyke, who's our guest here today, the chairman— I'm sorry, the CEO of the SESMI, the Smart Manufacturing Institute. John's been the leader of SESMI for the past 6 years. Before that, he had an illustrious career at Rockwell and at GE. We also worked together at Mesa International, where John was the chairman of that nonprofit for many, many years. So he certainly understands the industrial side, he understands the nonprofit side, he's mission-driven, and he's a perfect person to bring in here today and talk about the work that SESAME's doing. And specifically, we're going to talk around some work that the Smart Manufacturing Executive Council, which is run by SESAME, has done, in which they published the 5 Promises of Smart Manufacturing. So with that, John, if you wouldn't mind, maybe before we get into the 5 promises, if you want to expound at all upon the introduction of your own background and experience and tell everybody just a little bit about who SESAME is if they're not familiar with your organization.

Yeah, gentlemen, it's an honor for me to be here with you today. I've been looking forward to this conversation for a while now. Both, both of you are well-respected thought leaders in this space, and I applaud you for the work you're doing to advance the cause of this really, really important effort there at the Industry 4.0 Club. So a little bit about myself and about the organization I have the privilege of leading. I am the CEO of SESMI, the Smart Manufacturing Institute. We are a consortia funded by the federal government to advance the cause of smart manufacturing and specifically to help U.S. manufacturers become more competitive through this effort of smart manufacturing. And so from, from our perspective, we, we get to convene the ecosystem, the manufacturers, the vendors, the implementers, the the consultants, the machine builders, academia to both identify, develop a strategy, and then fund the innovation, the research, the actions, the capabilities that are necessary to create a more productive manufacturing environment here in the U.S. So it's an audacious goal. It's an important goal for the nation's manufacturing and economic security to advance the cause of the middle class here in this country. and to remain a healthy, vibrant, strong manufacturing community. And we believe that smart manufacturing is a really, really important element in how we do that and how we stay engaged in a global manufacturing supply chain and continue the work that we do here in this country as a manufacturing nation.

Well, thanks, John. You know what, the other thing, as we get ready to talk about the 5 promises, I'm aware that SESAME worked with an organization called, or as part of, the Smart Manufacturing Executive Council. Can you talk a bit about that too before we get into the actual 5 promises?

Yeah, we had this really interesting epiphany a little over a year ago where we realized, we understand that smart manufacturing and in all of its sort of variations isn't a natural— it's really not a revolution. We talk about the 4th Industrial Revolution. It was never going to be a revolution. But in the short term, we do see significant evolution in how this community needs to engage, needs to think about the value of the work that we're doing, and needs to really disrupt kind of Industry 3.0 methodologies and mechanisms and capabilities and do things in a new way. So in an effort to work with our great smart manufacturing community here to influence and accelerate this disruption, we recognized that one by one the large manufacturing companies and the market-making brands didn't feel like they had enough influence over their partners and how they were engaging in this space. And so we sat back and we said, what, what can we do as a mission-aligned, vendor-agnostic organization community to really shine the spotlight on what, what the possibilities are and, and what we need to do as a community to really take advantage of these powerful capabilities? And so that was the genesis of the Smart Manufacturing Executive Council, the SME. the Society of Manufacturing Engineers, the CEO, which is Janine Coons. We got together and we said we have a common mission. We have a longstanding partnership and a common mission to advance the cause of manufacturing and specifically to the small-medium manufacturing community because they're absolutely struggling to engage in some of this value creation that we we hold out as the promises from manufacturing. And so, uh, Janine and I worked together to form this incredible collection of about 30 manufacturing leaders with a very specific set of criteria for what it means to be on the Executive Council. And, and, and the entire charter of this organization is to, as I briefly alluded to, shine a spotlight on both the value and the requirements of what it takes to become more competitive through this lens of smart manufacturing. And that's— that was the genesis of, of the Executive Council. And this, this paper you alluded to is our first attempt to sort of put a point of view out there that summarizes what this Executive Council is all about, why we're here, and and frankly, what the promise of manufacturing or smart manufacturing looks like.

Well, I know, John, we want to get in and talk about the 5 promises. I think you touched on sort of the reason why they came about. I'm just curious about one of the points that you mentioned about not being so revolutionary, and I'm wondering how that is being realized in industry as you see it. So You know, were people more likely to get involved when they said, hey, this is big stuff, revolutionary kind of things? Are you seeing them more willing to get involved when you say, well, it's not so revolutionary as it is evolutionary, and we have people around that know what they're doing, and, you know, it's more of a continuation of where we've been, or maybe an acceleration of where we've been traveling for some time? You have any read on that?

Yeah, so there's, there's a couple of dynamics here that I think we need to bring to light. One is, uh, if you look at the Federal Reserve data on manufacturing productivity here in the U.S. by worker, you'll see a stagnation and then a decline, which is completely coincident with the announcements or with the introduction of the Fourth Industrial Revolution. So at the very point where we promised a more productive way of manufacturing We ended up, um, we ended up in a place where we saw a 5-year plateauing and then for the last 5 years declining productivity by worker here in the U.S. At the same time, it's, it's fair to say that manufacturers and the community that supports manufacturing is absolutely enamored with and excited about the prospect of digitization, digital transformation, and the use of data to drive a more competitive, more production, more productive manufacturing environment. And so, and I think the most recent sort of icing on that cake is this focus on AI and machine learning and the prospect of how we use that sort of data to empower and those capabilities to empower the productivity in all aspects of the manufacturing supply chain. So, so that said, I think it's important to recognize that we do need to change the trajectory of how we think about moving from a legacy or at least a traditional way of doing things and moving towards a more contemporary, more effective way of doing things. We talked about democratization of smart manufacturing, the fact that there's still enormous cost and complexity and how to use data from the shop floor, and that that's frankly the barrier that prevents the accelerated adoption of smart manufacturing. That's the problem we need to address, and that's what we're trying to kickstart with this executive council and frankly with the work that we're doing here at SESAME. This is absolutely the challenge in front of us. We have to reduce cost and complexity and make it more accessible for all manufacturers.

Thank you for that noble mission for sure. Let me jump in. Let's jump in and maybe we're going to share these 5 promises now. Let me put them up on the screen and then I'd like to just review them briefly and then we'll talk some more about them. These 5 promises, first, attract, empower, and retain the workforce of today and tomorrow. Secondly, uncompromising customer focus. Thirdly, risk mitigation and optimization in the areas of safety, quality, and productivity. Fourth, structured innovation and transformation driving speed to market. And then fifth, I think you mentioned this at the end there, profitability— profitably achieve sustainability and circular economy goals. So The supply chain there. So those are— that's really a wonderful list of things. I guess I really want to begin to talk about those a bit more, um, and maybe just ask you, I think it's really appropriate that you started with people, uh, at number 1.

Yeah, it is interesting, isn't it? I think 5 years ago people would not have been number 1. Arguably they should have been, um, but I think it's, uh, it's no secret to say that, um, post-pandemic, with both the realization of, uh, the importance of the connected worker as well as some new dynamics that, that have shaped, that are shaping the workforce coming out of the pandemic and the, the, the sort of gig economy, um, there is absolutely, and I think this is more prevalent in the US than it is in other parts of the world, but But it's certainly not restricted just to the US. There are changing dynamics and more demands for flexibility in terms of work hours, in terms of work environment, and this has had an enormous impact on the need for workers to be more connected, workers to be more integrated into the process of creating value for their organizations. more engaged in the innovation process. And all of that comes about through the readily or more accessible or better access to data, right? And in more contemporary ways. I think the day of putting an HMI terminal in front of an operator and asking that operator to kind of spend 6 months coming up to speed on how that line or how that process works, before they become fully productive. We can no longer afford that. The average tenure of a worker 5 years ago was 19 years roughly, and today it's just under 3 years, right? So the time to value—

Wow.

Yeah, it's extraordinary, right? We did the brain drain that we've been talking about for 2 decades. It's here in spades, and COVID had a lot to do with that. The pandemic obviously had a lot to do with that, just accelerating many, many who had the opportunity to retire and to move on to do just that. So yeah, it's an extraordinary environment. Virtually every manufacturing organization we have the privilege of working with today says worker access and time to productivity is the number one challenge for, for us. So it went from being sort of the, in the second half of any list of of strategic objectives for data or for smart manufacturing to being number 1 on virtually everyone's list. Shocking.

Yeah, for sure. I'm wondering, John, the list that we have, and for those of you that are online with us, you can go to the SESAME website and see the document, the article, the 5 promises again. There's, I guess, was there any leading of the council to say, hey, these have to align with smart manufacturing initiatives, or was it more wide open to say, look, what are the 5? Obviously, it's the 5 promises of smart manufacturing, but I'm just wondering how much that tilts the scale or how much it aligns with the stuff that folks are seeing day to day or have been working on for many years.

So, so this was a wide-open conversation. The basic premise was that— and this was a premise that they validated, so it was not anyone leading the witness. These are 30 savvy, experienced manufacturing leaders. By the way, they each represent a significant level of both business leadership expertise as well as an understanding of the real technology challenges. that we have to address in this space. Savvy leaders, the overarching premise that they validated was that yes, smart manufacturing represents a fundamental capability to help the US become more competitive as a manufacturing nation. Let's just draw that line in the sand. These 5 capabilities came out of a face-to-face meeting of the council in Atlanta this past February and were refined as we worked through this over the subsequent months before we launched this point of view in the summertime. But yeah, this was a wide open playing field. This was the executive council saying, in our experience, here is what smart manufacturing holds out for us. This is the This is the return on investment that we've seen, and this is what we need to focus on to convince manufacturing leaders across the nation to expect from their smart manufacturing initiatives. I think there's an enormous hunger and thirst for guidance and leadership in this space, for kind of a center of gravity. We, we refer to the Executive Council as a center of gravity or a voice of industry And I'm not aware of any other organization like it where there's a group of manufacturing leaders that stands up to say, this is what must be true. In fact, it's a phrase that we've begun to use in every aspect of the work that we've been doing to create a playbook around these smart manufacturing promises and make sure that we're truly answering the questions what must be true for the manufacturing leadership of, of, uh, the, the, the nation's manufacturing companies? What must be true for the vendor community? What must be true for the machine builders? What must be true for the consultants and the integrators? So we're trying to address head-on through, through the lens of these 5 promises what must be true, and, and then make it compelling and make it interesting and make it achievable for these stakeholders to engage with us on this journey as we accelerate adoption of smart manufacturing.

Yeah, and I would just say that, I mean, when you look at the 5 promises, right, I mean, they're written in a way that, you know, it's not all just technology-focused, right? You're talking about, you know, focusing on the customer, focus on safety, quality, productivity, you know, attracting the workforce of the future, etc., etc., right? Which are And I think one of the things, oftentimes our audience tends to be smaller manufacturers, and sometimes hearing about the big companies turns them off. But I always like to say, and I think this exemplifies the fact that in many, many areas they've been there, done that for a long time, and these are best practices, right? So they're framing up these conversations in ways that hopefully break through to people to say, I, you know, accept what these promises say, get yourself on the journey, get yourself engaged with groups like this, groups like SESAME, etc., and then start yourself down a particular path.

I think what reinforces that too, Mike, in looking at these promises, I'm really— and maybe we can elaborate on this a little bit further too— is this concept of circular economy and sustainability, and really the idea that no one's on an island anymore. You know, we're in a community and, and we really rely on each other, um, you know, in this, in the overall ecosystem of the supply, uh, system for success. So I think that's also really important, kind of reinforces what you just were saying.

Yeah, I, I appreciate you highlighting that. One of the, one of the really interesting dynamics we've seen in the last couple years is that energy and sustainability, energy productivity as an idea and all of its sort of manifestations, energy management and so on and so forth, has not always been a top priority or a top sort of strategic reason for manufacturers to invest in these kinds of capabilities. In the past year to 2 years, it has become one of the top 3 catalysts for investing and strategic initiatives for investing in smart manufacturing. And one of the interesting things that we're seeing is that many of the typical things that we've been doing for decades now to improve productivity, improve throughput, improve quality, those have both an indirect and a direct input to energy productivity. But we're not as manufacturing operations stakeholders, we're not always great at connecting the dots between what, what that value creation means to the bottom line of our sustainability initiatives or to the ESG initiatives that our corporations are aiming at and looking to do the best to accomplish. And so connecting the dots between the very powerful, significant outcomes that we've been working on for decades now is super important, right? Because I think what we're doing here often has significant impact or can have significant direct impact on these highly strategic society-level objectives for us all.

And I think that ties into what you said earlier about it not necessarily being so revolutionary, right? We've been doing this for a long time. We have new technologies that certainly make things possible today that weren't possible previously, but we're still chasing the same things that we've been chasing for some time. And I think organizations like this, groups like you have assembled, can help sort of frame those things up. And so I know we weren't necessarily planning to talk about it, but you mentioned at the beginning about a playbook that the Executive Council is working on. Could you give any little teaser on what that is or update folks on what might be learned there?

Yeah, so we'll be giving the first teaser to the world at our annual national members meeting 2 weeks from today, as a matter of fact, in Knoxville, Tennessee. We've been engaging with this Executive Council for the better part of the last 6 months in trying to frame up and determine how to best encapsulate and then codify what's in the heads of these brilliant leaders and to make sure it's done in a way that can be consumable and relevant for all manufacturers, not just large corporations. And so we've got a, I believe, a very, very powerful venue at our members meeting where we're putting 6 of these executive council members in front of the entire membership at our event to say specifically— actually 7— to say to federal policymakers, here are the top 3 things. And these will come out in an actual playbook, but we're addressing key stakeholder groups to say, federal policymakers, here's what we believe to be true. Here's what must be true for manufacturers to become more competitive, and that you can think about and act as a federal policymaker. Manufacturing leadership of all types, of all kinds, here is what must be true for you. Technology providers and vendors, here is what we think you need to be focused on and investing in as we think about the future of the accelerated adoption of smart manufacturing. builders, the knowledge training ecosystem, the consultants, the integrators, academia. So we have very directed guidance all aligned with this notion that smart manufacturing is a central element, a central tenet in how we develop a more productive manufacturing community here in the U.S.

You know, it's— what's great, you know, it's kind of where— what I was thinking about as well is, you know, we've got these 5 promises that you guys have developed, but then the The question is putting them into practice, and I think what you've just pulled back the curtain on is how do we take these promises and have them make a difference actually in what we do. I think that's wonderful.

The point is not to in any way poke at any of these stakeholder groups. They're doing what they're doing for all the right reasons. The objective is to shine a spotlight on The sort of if-then statement. If we want to become more productive, here is what we must be doing, and this is the trajectory we must be on in the days to come. And we want you to join us as we work on this together and as we work, work as a community to solve problems that no one stakeholder group can actually address on their own.

Well, maybe— I'm sorry, Michael, I just jump in. Every once in a while I lose sight of this, and then it Comes back to me and I want to say it again. And so, John, you mentioned at the beginning, you know, SESME, part of Manufacturing USA Institute structure, you know, funding and research and things like that. In order to do some of the high-level strategic things that we're talking about here, there's a bunch of behind-the-scenes stuff that has to be taken care of or potentially taken care of technologically speaking, that you guys are working on. So I like to remind people that there's a lot of stuff that hopefully years from now will be easy and a given and stitch together all these different constituents and, you know, make it possible for, you know, us to easily grab information, move it, you know, support our decision-making no matter where we are. But that's a lot of the work that SESAME is doing as well, right? Right, and maybe, maybe take just a minute to make sure we don't gloss over that portion of the work you guys are doing and make sure that people understand that there's some really foundational work you're doing in the weeds, technologically speaking, that will ultimately help accelerate the democratization as you're talking about.

Yeah, thanks, thanks for pointing at that. And I love the fact that we're 30 minutes into this conversation without having touched on technology Right. But it is a non-trivial aspect. To your point, the legacy of 30 years of— 30-plus years of implementing one data silo for one use case at a time has left us with a technical debt in all of our shop floors that is just extraordinary. It's a massive boat anchor.

Yes.

Future productivity, engaging and leveraging future capabilities like AI and digital twin and so on and so forth. And so that entire methodology of implementing stovepipe architectures one use case at a time has to be a remnant of the past, relegated to this, the ash heap of history, as they say. We have to focus on plug and play, on interoperability. This umbrella of interoperability, which means a lot of things, But we have some very specific ideas, some very specific capabilities, technologies, open specifications, standardization of how information flowing from the shop floor in real time, whether it's a single sensor, whether it's a PLC, machine tool, robot, a data store, dramatically simplify and commoditize how that information flows into a a place so that through an open specification, any application can hit that content, that object, that class, and create value with it instead of reproducing these data silos in one stovepipe architecture after the other. So that requires a longer-term mindset, but that is absolutely fundamental to how we dramatically reduce the cost and complexity, which, by the way, will also, we believe, play a pivotal role in how we begin to facilitate a much, much tighter integration between IT and OT, how we bring the best of OT and the best of IT together in ways that both sides can respect, both sides can trust, and both sides can use to advance their specific objectives and the things that they get paid to do every day.

Yeah, it's interesting you talk again about breaking down silos. We talked about that earlier between in the entire ecosystem about having to do that and tie together. And we have to do that really at every level of our manufacturing organization in order to deliver on the— I think on this productivity promise that we're talking about.

Yeah, spot on, Mike, spot on.

That's really cool. Well, that's really neat. So we've been talking for the last 30 minutes or so with John Dyke, the CEO of SESAME, and we highlighted earlier these 5 promises of smart manufacturing. We've been sort of talking through what they are and how they would be applied. And if you would like to see them more in, you know, look at the entire article where they're talked about, You can see that here at this web address. You know, as we kind of reach towards the end of our discussion, maybe Mike, we'll start with you. You have any final thoughts for the audience today as we wrap up?

Yeah, maybe just a couple of points. One, go to the sesame.org website because there's tons of information there about all of the the work that the Institute is doing that oftentimes is unknown to many people. So there's research, there's funding, there's projects, there's workforce development, there's the Executive Council, there's so much that's available there. And so I would strongly encourage people to do that. Also, one of the things that you'll find on that site is SESAME does their own LinkedIn Live webcasts monthly, and back in the July timeframe was another session specifically to the 5 Promises of Smart Manufacturing, so you could check that out as well. And then, you know, I guess realistically, probably the only other thing that I would say is that, again, the SESAME community that they're building, you know, it's leveraging this executive council, I think, is really important. They're manufacturers, so these are manufacturers' voices speaking. They're manufacturers with significant experience. And so I think, you know, especially as we work to serve folks that are not necessarily on the council and maybe smaller organizations trying to figure out their paths forward, learning from these organizations is really, really important. And again, sometimes people want to dismiss the bigger organizations because they think, oh, they have all the money in the world and they have all the staff in the world and they got this licked. And there's a lot of heavy lifting and a lot of hard work that folks have been doing for a long time that I think is significantly valuable and you can consume through spending time and getting engaged with SESAME.

So John, how about yourself? Any last thoughts for our audience before we wrap it up today?

Yeah, 2 brief thoughts. Number one, just sort of taking this idea that, you know, in the past we've been sort of relegated to building out our capabilities one use case at a time and shifting into what Mike Yost and I have been propagating as a mindset shift. We talk about a smart manufacturing mindset, the notion that much like quality and safety and even continuous improvement have become part of our DNA, over the past 3 decades. We don't question why we focus on safety or why we're investing in quality or why continuous improvement or lean is important. We need to be thinking much more systematically about the value of data, creating cultures that demand data, and then obviously the transformation required to think about data in a much more holistic way because it is the way we're going to regain our position as becoming a productive manufacturing nation. There is no other path forward, we believe. So that's, that's one point. The second point is just building on what Mike said. In the US here, we're known, and in fact many ways are proud of, our sort of individualistic tendencies. And that's one of the hallmarks of our innovation historically and what has set us apart as a nation. Individuals that are able to work and to innovate and do great things and bring those to the marketplace in a very capitalistic sort of environment and, and be successful. Well, there are some things that we need to do now, I believe, that take us beyond that sort of individualistic notion. Not that we're not advocating for innovation and capitalism, but there are problems that we need to solve because our supply chains have become so globalized, because, because other nations are collaborating in ways that make them more productive. We, we need to do that. We don't have that history of collaborating to solve problems, but that's what SESAME is trying to do. We're convening right now about 210 corporations, thought leaders that help us figure out which problems to solve and then how to go solve them. This is extraordinary. Become part of this group of folks that are invested not only in their own success but in the success of our future as a manufacturing nation. That's kind of what— that's, I guess, would be my final appeal to the community here.

Yeah, thank you. It's a classic moving from independence to interdependence. That's wonderful. That sounds super. Are there any other activities you would just like to— I know you mentioned the annual conference in a couple of weeks that SESAME's holding. Are there any other specific SESAME activities you would like to highlight before we wrap up?

So the short answer is come to our website, check out our website. We're planning a whole host of new activities. and ways to convene this ecosystem starting in January. We're actually using the executive council to drive the priorities and the topic areas. At the event in 2 weeks, we're investing— we're announcing rather the investment of a whole new set of smart manufacturing innovations. So I can't say much about either of those, but if you're not coming to the events in 2 weeks and registration is closed, If you're not coming to the event, find us on the website, watch out for those announcements, and, and, and look for ways that you can become involved, that your voice can be heard, and/or that you can learn from other peers in the industry that are engaged. And I can tell you are having exactly the same challenges that you are. And, and, uh, as I said, it's both an opportunity for you to contribute as well as to learn from From all the great thinkers in this space.

Thank you, John. Well, it's been really great, John. Thank you for taking time out of your busy schedules to join us here on the Industry 4.0 Club Fireside Chat. We would like to—

It's been a privilege and an honor to be here with you.

Yeah, we'd like to encourage all of our listeners, you know, you've heard us talk about taking action and really helping to drive this forward. We'd like to encourage anybody that's been listening to take action to advance the deployment of Industry 4.0. Read an article, attend a workshop, develop a smart manufacturing roadmap for your plant or your company, or challenge your organization to move forward, as John has mentioned today as well. And of course, share those with us. We'd love to hear from you either on our LinkedIn page or at our website. The Industry 4.0 Club hosts conversations like this routinely on LinkedIn and YouTube. If you'd like to join us on a future broadcast, also please let us know. Our website is www.isg40club.com, or follow us on our LinkedIn page. So on behalf of John and Mike, thanks guys for again for joining us. And we'd like to wish everybody a wonderful day. Thanks, everybody.

Bye.