This post was authroed by Julie Fraser, principal of Iyno Advisors.
Are you ready for people-centric manufacturing? If this question sounds crazy, realize that other industry analysts are thinking this way too.
These analysts are not stuck in 1960s manufacturing; people-centric manufacturing does not mean labor-intensive manufacturing. There are fewer people doing more production work every day. Yet, leaders are focusing on their employees, making sure they are fully equipped to take productivity higher and off the charts.
Yes, this requires automation and instrumentation. It also requires lots of information technology (IT). As automation and IT become well established, people will be more critical than ever. The ability of people to make decisions quickly and take appropriate action is going to be the differentiator between leaders and laggards in production and manufacturing companies.
People are the critical factor in manufacturers’ success. Why? Because of the core business strategies many companies are undertaking – and the way the world works today. These examples show that today’s automation and IT systems can only provide platforms from which people must make decisions and act.
- New business models seek to increase value to customers by adding services and complementary products. So the offerings are no longer just static products, but are based on an ongoing dialogue. In the end, determining what customers actually want and need is a discovery process. That means constantly changing products, triggering a need to improve how they are made.
- Many companies now come together to offer what customers need, whether in outsourcing, distribution, or other value-adding relationships. While each company’s IT system may be good, people must collaborate across companies for all the parties to end up with a good outcome. The capabilities of each partner may also change regularly, changing the terms of these conversations.
- Many products are now sold around the world, with totally different market conditions, customer expectations, packaging, pricing, and regulatory needs. As emerging economies grow, these factors change – and likewise as conditions change in more established economies. Each product sold in each region becomes a vast matrix of special considerations that changes regularly. This growing slate of specific configurations is another factor that changes product mix, optimization, and best practices in the plants.
These situations cannot be handled automatically with process controls, instrumentation, and IT – no matter how sophisticated. People must step in and make decisions. As these types of trends accelerate in leading companies, people are once again central to sustaining leadership positions as manufacturers.
Turns out, the research minds at IDC Manufacturing Insights agree. IDC Manufacturing Insights enumerates three levels of the “factory of the future.”
- The lowest level is the automation-intensive factory of the future, which is where manufacturers in developing countries focus.
- The middle level is the IT-intensive factory of the future, where producers in developed countries focus.
- The top level is the people-intensive factory of the future, where the leading 18 percent of manufacturers focus. This is not the same as labor-intensive manufacturing, but more suggestive of quick-decision and response-intensive manufacturing.
Automating can add productivity, but typically it is not sufficient except in standard, lower-margin production industries that are relatively static. Factories in the developed world have become much more IT intensive, with more and more software running on standard IT platforms. Yet, many of these production plants still struggle to drive improvements and be as flexible as needed in the unprecedented situations they face.
About the Author
Julie Fraser is principal of Iyno Advisors and is passionate about manufacturing using technology for better outcomes. She has researched manufacturing software and systems for more than 25 years, holding senior industry analyst positions at Cambashi, Industry Directions, and AMR Research, as well as writing the CIM Strategies newsletter at Cutter Information. She is also outreach director for MESA International.
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A version of this article also was published at InTech magazine.
