2/21/2020
BY: GEORGE SINGOS
With all the excitement and intrigue surrounding Industry 4.0 and advanced manufacturing technology in recent years, many companies have started thinking about making investments – with some already well into their technology adoptions. As I meet with companies around Michigan through my role as a consultant, I hear a lot of concerns from companies that aren’t quite achieving the Return on Investment (ROI) they were anticipating. This leads to the question, why do these technology investments fail?
The most effective investments occur when technology and operating systems are used to meet business needs, or the Voice of Business (VOB). With a strong business strategy in place, organizational practices and equipment investments should be established with the goal of serving this strategy. However, more commonly, companies decide to spend money on technology when systems are inadequate and strategy ignored, translating to disappointing and sometimes devastating results.
Technology, Systems and VOB: How Are They Related?
Rather than investing in technology just for the sake of it, adoptions should be relevant and targeted toward supporting specific company goals if an organization hopes to achieve long-term, positive results. This starts with understanding the current state of business systems. In this context, a system refers to all the actions and processes involved in running a plant, from data acquisition to operational efficiencies. The success of any technology adoption is largely dependent on the strength of the systems. If all moving parts communicate effectively and clearly, it will be much easier to integrate new technology into the overall system.
For example, one company decided to invest in a 3D printer simply because they noticed their competitors did. Lacking the proper system to support this – no employees trained to operate it, no plan for how to integrate it into existing practices – it eventually became a very expensive paperweight. In situations like this, it’s evident how having a more robust system in place can support technology adoption.
In addition, systems are most effective if they truly serve the VOB, which drives the overall company strategy. Where are your biggest problem areas? Are customers satisfied? How has business performance changed over the past month, year, etc.? How is the market evolving? These questions and more are considered when determining the VOB and thus strategic planning for the business. By establishing the areas in the company that most need attention, potential opportunities for improvement – such as with technology adoption – can be identified. This leads to more informed, targeted investments that relate to and support the specific needs and goals of the company.
What to Consider Before Investing in Technology
Through our Technology Opportunity Assessment, The Center helps companies measure their effectiveness in each of these three areas – Technology, Systems and VOB – enabling them to visualize which areas need attention, identify where technology opportunities exist and calculate ROI. This ensures clients have the proper systems and strategy in place before investing in technology, increasing their chances of achieving positive returns. During the assessment process, questions are answered to analyze and evaluate the company’s current practices in these three areas, with questions including:
- What is the company strategy for technology adoption?
- Do opportunities exist to improve products and services through the inclusion of smart technology?
- How is performance data tied to business results?
- How do you determine the Voice of Customer/Customer Satisfaction?
- What level of integration exists between management systems?
If an organization cannot provide answers to questions such as these, there is still work to be done before the business is fully ready to adopt new technologies.
Whether a company has already invested in technology and achieved poor results, or has plans to invest in the future, it is essential to establish strong systems and goals before moving forward in order to successfully realize expected returns. For assistance with identifying opportunities for technology adoption in your facility, click here or contact us at inquiry@the-center.org.
MEET OUR EXPERT
George Singos, Business Leader Advisor
George Singos is the Business Leader Advisor for the Michigan Manufacturing Technology Center. He has more than 30 years of manufacturing experience in various capacities. For the past 20+ years, he has focused on sales and marketing management both domestically and internationally. Prior to joining The Center, George spent the previous 10 years working in International Business Development. His primary focus was growing International Sales in Europe and East Asia while supporting North American, South American and ASEAN operations.
Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.
Categories: Advanced Manufacturing,
Industry 4.0