Digital Transformation vs. Lean Transformation | Bob Emiliani

Michel Baudin‘s comments: “Digital transformation” is a quaint way of describing the growing pervasiveness of software in business, with its infrastructure of computers, computer-controlled devices, and networks. Digital is normally opposed to analog, as in music CDs versus vinyl LPs. The early work on industrial automation was based on analog mechanical, fluidic, or electronic control systems, and its “digital transformation” happened decades ago with the advent of numerically controlled (CNC) machine tools and programmable logic controllers (PLCs). This is not what Bob is talking about, but I am not sure what he is talking about.

Bob sees Lean being displaced in corporate strategy but is not quite clear what is taking its place. He says that corporate investment is shifting “from machinery and employees to robots and software,” but aren’t robots machinery? And doesn’t the use of robots and software require investing in the development of employees who can use them?

Many other names have been used besides digital transformation. For example, the prefix “e” often designates electronic versions of previously existing tools, as in email, or eKanban, so you could talk about eManufacturing, but nobody does. “Cyber” is most often used for the dark side of this technology, as is cyber-attacks or cyber-bullying, but it hasn’t kept the German Industry 4.0 program from being based on cyber-physical systems, For lack of a better word, I just use “Information Technology” (IT) as an umbrella term for everything in manufacturing that is based on computers, from machine controllers to ERP.

Michel Baudin‘s comments: I don’t see it. The introduction of more IT into the operations of a business requires people at all levels to change, including managers. They may think they don’t need to, but they are mistaken. It takes work to become and remain IT-literate but the managers who don’t are likely to use it, at great expense, only to mechanize existing practices and make them more difficult to change. Many authors have pointed this out, including Bob in his article, and here are a few examples I have personally experienced:

1. Many assembly plants prepare kits days in advance and, when the time comes to assemble a product unit from the kit, discover missing parts. To proceed, the assemblers steal the needed parts from other kits, which perpetuates the problem. It’s not an easy to eliminate this practice but part of the solution is to prepare kits just before use, so that components are not placed in kits earlier than necessary. The “solution” I have seen implemented in a Manufacturing Execution System (MES) was instead to include a “Steal from kit” transaction to track the practice.
2. As discussed in earlier posts, IT has made “smart” numbering systems obsolete, but it is used instead to perpetuate them.
3. A machine shop used a machining center to cut multiple copies of the same item from a slab of aluminum, when it could have made instead matching sets of different component going into the same product. It did not make this change, however, because its process planning system did not support making multiple items from a single slab.

Michel Baudin‘s comments: A company’s specific product designs and processes are its core technology. They are intellectual property, invented by its engineers, often patented, and indeed a major corporate asset.  We shouldn’t equate “technology” with IT. It is only one form of technology, and not the major one in most corporations.

I am not sure that making Lean management survive as a topic is an appropriate goal. Lean management is a separate entity as long as it represents a departure from corporate practice. If successful, the approach now known as Lean management will replace the current practice and become the standard.  As “the way we do things,” it will be just management. If unsuccessful, it will be forgotten.

Michel Baudin‘s comments: The key point is that, whether it is software or machinery, the mere possession of an asset is never a competitive advantage. Anyone with money can buy a Stradivarius and it doesn’t make them violinists.  It’s only when combined with skills at using them that these assets can become a competitive advantage. There is no investment that eliminates the need to develop a skilled workforce.

The record of IT in Manufacturing is mixed. The direct and supervisory control of machines is a success, and so are Warehouse Management Systems (WMS), but ERP systems don’t have many enthusiastic users. These systems are, at best, perceived as an unavoidable cost of doing business but I have never heard a manufacturing executive credit a company’s success to the ERP system they used.

It’s not a question of whether IT should be used in Manufacturing but how.

Michel Baudin‘s comments: The English translation of Taiichi Ohno’s Toyota Production System came out in 1988; the Japanese original, in 1978. For ideas on IT, it’s a bit long in the tooth. Ohno’s ideas about Manufacturing have aged well and retained their relevance but I would not look to him for guidance on IT. My smartphone today is a more powerful computer than the mainframes of the 1970s, and it is connected to the world. There were prophets from that era whose visions of IT came true but they did not come from the ranks of manufacturing experts.