Transcript 0:01 Those customers want value, and they're gonna say they're gonna go somewhere else if they don't get the best value. Is that correct? Absolutely. Value is transient. What's value today may not be value tomorrow. 0:13 Again, because they're under pressures and, and some of them aren't the most adept at adapting. 0:19 And it does come back to that people process and technology thing, in that you can have the greatest processes in the world and really good technology, but if the people don't follow the processes and don't use the technology, you're gonna fail. 0:35 [upbeat music] Welcome back to The Peggy Smedley Show, your voice for our connected world, with your host, Peggy Smedley. Hello, listeners, and welcome back to The Peggy Smedley Show. I'm your host, Peggy Smedley. 0:52 My next guest has more than 50 years of experience in the manufacturing sector, working both with automation, technology, end users, and the vendor side community. 1:01 He has also worked in the consulting industry and has been a market research analyst for more than 27 years. 1:08 He is the founder of his own consulting company, where he works with clients on how to best leverage technology to drive operational excellence. 1:17 In addition to his work at his consulting company, he serves as CFO at The Analyst Syndicate and is the manufacturing practice lead at Third Eye An- Advisory. 1:29 Please welcome Dan Miklovic, founder of Lean Manufacturing Research. Dan, welcome to the show. Hey, Peggy. It's always good to be here. 1:38 It's, uh, always a pleasure talking with you about the technology trends in manufacturing, and we've, we've been at this for a long time, and it's always good to share our perspectives. 1:49 You know, I have to say, Dan, when I was reading your intro, I was thinking, oh my gosh, you know, there's so many things you were doing. I, I was like, wow, I, I almost forgot, you know? 1:57 And you and I were talking before the show how long we've done these, and every time I have you on the show, I feel like, wow, you know, I'm getting older and older and wiser and wiser. 2:07 But it, it just, it's how many decades we've done this together and how much has gone by and all the trends, and it's amazing, right? It's, it's interesting to see what's happened in this space. Well, it is. 2:21 You know, I, I first got into manufacturing, uh, when 4-20 milliamps was the, uh, big technology trend. 2:30 And, and my first major engineering job in automation was helping a chemical company, uh, manufacturing plant convert all their pneumatic controllers to these new-fangled electronic things using 4-20 milliamp. 2:43 And now, you know, it's all digital and everything. Although I just saw a recent article about, you know, why 4-20 milliamps still remains relevant. 2:54 It, it's crazy to think about some things that have gone and how, like, when you said a 4-20 milliamp, but you know, when we think about that, why it's valuable and sometimes you have to go back to technology and how technology has... 3:07 It evolves and, you know, I mean, and, and it's evolution and sometimes we still need it. 3:12 And that leads me to our discussion today of thinking about where we are in manufacturing, because manufacturing, we talk about this evolution in manufacturing. I think we, we evolve. We have to look back to go forward. 3:26 Everyone says, "Well, we don't want to look back," but we have to look back in order to go forward, and I, I think everyone's struggling with that because we talk about these changes in manufacturing. 3:35 We talk about industry 2.0, 3.0, 4.0, and now we're hearing about this new era of manufacturing, 5.0, and it cracks me up because you and I have been around and seeing all these evolutions of manufacturing. 3:49 But a lot of it is, it, it, it, some of it's the, is, is the same in some ways, and some of it builds on itself, but yet you have to do some things because you just can't, the old expression, throw the baby out with the bathwater. 4:02 I mean [laughs] you, you, you know, manufacturing isn't that quick to jump, right? Well, it is. It, it has been, you know, it's sort of the root of the term, if it ain't broke, don't fix it. 4:13 [laughs] But, but at the s- but at the same time, you know, I'm from St. Louis. I live in St. Louis currently. 4:19 Uh, I grew up here and I'm back here now, uh, after spending 25-plus years on the West Coast in the high tech northwest in the Seattle area. But one of St. 4:29 Louis' favorite sons was Yogi Berra, and he, one of his famous expressions, or favorite expressions or famous expressions was, "It's deja vu all over again." Yeah. 4:41 A- a- and in manufacturing, I think that's what we're seeing. You know, we, we saw the, the sh- you know, manufacturing 1.0, industrialization. 4:49 Um, manufacturing or industry 2.0 was the, uh, advent of steam power and automation and all of that. 4:57 And then 3.0 became the automation using electrical and electronic types of things, and the, particularly the electronics of the, uh, late '50s, early '60s, and into the '70s. 5:10 And then, you know, now we talk manufacturing or industry 4.0, the, um, advent of computers and, and the, what they call the cyber physical systems. 5:21 And then now 5.0 is supposedly the use of AI and cobots so that machines and humans work together. You know, but in reality, it's just, it's not revolutionary, it's evolutionary, and it's, it's... 5:37 I think that's the thing that people have to realize is you don't have to throw out all the old technology to use new technology. But when we talk about that, have we created this disruption? 5:49 We ta- and I know manufacturing used to hate talking about disruption in manufacturing. Have we created this, this fear-That, and then people go, "I don't wanna make change because it's too costly. 6:01 It's all we're talking about is new technology, and we've put this old technology on the shelf, and we're not doing it, and it's become costly." So digital transformation, what does it really mean then? 6:12 I mean, that's the struggling part that I'm having because we've talked about IoT and what is IoT and what is data, and now we're saying AI, but it's really somewhat of the same, and we're just getting smarter at it. 6:25 But the way we use all these terms, and I'm not picking on you, Dan. 6:28 I know that analysts love to use terms, and they love to use acronyms, but they're their own worst enemies to get the industry to kind of say, "What the heck are we doing here?" 6:39 When in, in reality, you have to help them understand why do they go forward and how do they make money. The ultimate idea here is they gotta make money. If they're not in business, they're gonna be broke. 6:51 Well, you know, and that's true for analyst firms too. 6:54 I mean, Gartner was, is, is and was, and I spent 15 years at Gartner, um, the classic of the three-letter acronym, and, you know, a lot of it is about fear, uncertainty, and doubt. 7:06 Uh, any analyst, any consultant makes their money by sowing fear or uncertainty or doubt because then, you know, the people come to them for help. "What should I do?" Or, you know, "What's my best course of action?" 7:20 Well, 7:21 at the same time though, you know, to say that as an analyst myself, there, there are valuable models that come out of the analyst community and perhaps, you know, none better than the Gartner Hype Cycle, where it talks about a technology trigger that, um, people start to see a new technology and say, "Hey, maybe I can use this to really change the way I do things." 7:45 And then we go to the peak of inflated expectations, which is where, you know, where I think we've been with Industry 4.0, digital twins, all, all the IoT stuff. We- we've crested that peak of inflated expectations. 8:00 Everybody thought all this technology was gonna radically transform business. All we heard about in, you know, from the McKinseys and the Boston Consultings of the world was digital transformation. 8:12 Well, everybody figured, you know, I apply technology, I'm gonna immaculately or immediately change my business, and it's gonna be like an immaculate conception. 8:21 I'm gonna put the technology in, and boom, the whole world's gonna change. 8:26 And what we're seeing now is they're saying, "Hey, yeah, it helped me do this during COVID," or, "It helped me, you know, enable remote workers a little better." 8:34 Or, "Yeah, I was able to do this a little better, but I spent a lot of money, and 80% of what I invested in isn't paying off." 8:41 Well, that's what we call the trough of disillusionment, where people went all in, and they're not getting the results. 8:48 And, and the question is then how do I climb the next phase of that hype cycle called the slope of enlightenment so that I can actually use the technology to make real substantive and long-lasting change in my business? 9:02 And that's the challenge a lot of companies are struggling with today. It's not that they don't know they don't have technology. It's not that they don't wanna use technology. It's they don't know where to use it. 9:14 Well, that's the problem. I, I, I, I think you, you've hit on something that's very impor- important. This, this trough of disillusionment is, is serious because we have people saying, "I've really wanted to see this. 9:27 I wanted to see immediate results." And then they said, "Well, while traveling down this path," they didn't understand, you know, IoT is not an end result. It's a journey. We always said to them it's a journey. 9:39 You're not just gonna all of a sudden and that. And then now this slope of enlightenment that they're looking for that you said is like, okay, you, you always have to understand it's not you're just one and done. 9:49 You have to keep going, and you keep... And that, and that's where I think they struggled understanding. That's the people, the process, the technology. 9:58 You constantly have to reinvest, and that's where I think the struggle came from. But what does that really mean? 10:05 And I think when we use those terms, people, process, technology, they get confused because it's hype again. But the idea is you have to, and that's where we're saying, well, how many people? How much of this process? 10:16 How much is the technology? 10:18 I think w- that's where digital transformation became confusing, and I think what you just said leads us down that, that road of understanding now we, we, we've discovered the failure in the supply chain because we didn't understand it had to do with collaboration. 10:33 It wasn't just within the four walls. It had to do with everybody. Yeah. And, you know, it, it really is about understanding how to make the value chain, the supply chain, whatever terms you wanna use, work better. 10:50 Um, you know, GE in its early days under Jack Welch really went in all in on Lean and Six Sigma. 10:59 And the, the trick was that what made them successful, what, what allowed GE to really change the way their supply chain worked was they just didn't do Lean for themselves and Six Sigma for themselves. 11:18 They went out and shared their knowledge with their customers and with their suppliers. 11:26 So they, you know, made sure that the digital transformation or the business process transformation that they were trying to seek was something that went beyond their organization, and I think that's what companies need to look at today is, you know, hey, if I'm gonna invest in IoT, and I'm gonna know so much about how my factory operates, how can I better use that to help, A, my suppliers get a perspective of how I operate so they can better integrate with me and can better understand how to meet my needs, and then B-How do I use the information I'm generating about my manufacturing processes to help my customers better see, you know, how they can work with me? 12:14 How they... If they understand how my plant runs, they can better understand how to give me orders so that they get a smooth supply, that they don't cause lumpiness and that I'm forced to react. 12:26 You know, it, it's something that we've learned over time, and there's been several studies in this, 12:33 80% of disruptions, that is, you know, breakdowns, uh, quality upsets, uh, accidents, they all occur during non-steady state operations, either during a startup or a shutdown or a process upset of some kind. 12:51 And the more we can keep things moving smoothly, um, you know, the better our manufacturing systems will run. 13:00 And that's where, why we're struggling so much today in the post-COVID and the supply chain disruptions driven by, um, the war in Ukraine, is that, and, and the impact that's had on the whole European supply system, is that people haven't figured out how to keep things moving smoothly using technology, and that should be their goal. 13:26 And, you know, we talk about agility, but agility is more than just the ability to change quickly. Uh, agility is sort of a gracefulness. It's, it's a, a fluidity in the way you change. 13:40 So the trick isn't just to be able to, you know, make a snap change and be able to react quickly. It's to be able to re- react gracefully and quickly. And that's what I think we're, we're struggling with. 13:53 I think, and, and I really think that's part of the challenge with this supply chain. We didn't understand that, and we failed miserably, but now we're coming back. 14:04 And I think we, we, we didn't want to admit that we were failing. 14:08 I think we tried to put a Band-Aid on it and say we could, we could get along with it, but then it became tougher and tougher and tougher, and we have to look at the reality of what our struggles are in order to be better, in order to improve so we don't make the same mistakes. 14:23 And that's part of the challenge is we have to realize we need our partners to serve our customers better and our customers' customers better because those customers want value, and they're gonna say they're gonna go somewhere else if they don't get the best value. 14:39 Is that correct? Absolutely. And, and value is transient. 14:44 Um, what's value today may not be value tomorrow, um, you know, a- again, because they're under pressures and, and some of them aren't, you know, the, the most adept at adapting. 14:56 And, and it does come back to that people process and technology thing in that, you know, you can have the greatest processes in the world and really good technology, but if the people don't follow the processes and don't use the technology, you're gonna fail. 15:11 You know, the same is true. You can have really highly motivated people, you, you can have all the best plans in place, all the good processes, but if the technology won't allow them to execute, you're gonna fail. 15:24 And then the third leg is you, you can have the best people, great technology, but if you don't design your business processes to deliver value, 15:38 you're gonna excel, you're gonna do good at being bad. 15:44 Well, Dan, we're out of time, but I want you to come back soon because we have so much more to talk about, about creating a skilled workforce, and I'd love to talk about where do we go with ROI. 15:53 So that's gonna be our next discussion. So Dan Miklovic, founder of Lean Manufacturing Research, thank you for your time. 15:59 Where can our listeners go to, to just work with you and, and to improve their manufacturing processes? 16:06 Well, they can contact me through The Analyst Syndicate, um, which is www.thansyn, T-H-A-N-S-Y-N,.com and click on the, uh, analyst page, and they'll get a link to, you know, be able to connect with me via Calendly and talk about, you know, hey, where do we wanna go? 16:25 They can read some of the research I publish there and everything else. And we ought to do this on a monthly basis, Peggy. I love it, Dan. We will. We're gonna make this a regular thing. 16:34 All right, listeners, that's all the time we have for our show today. Make sure to share and subscribe to our s- episodes each week. As always, you can share your thoughts with me on Twitter, @connectedworld. 16:44 And remember, we broadcast live every Tuesday at 12 PM Central. Check out our website at connectedworld.com, our show website at thepeggysmedleyshow.com. 16:52 And don't forget to tune in to Project Sustainability podcast at psp.lipson.com. This is The Peggy Smedley Show, your voice for our connected world. And remember, with great technology comes great responsibility. 17:03 Have an awesome week. [upbeat music]
