Category: View Points

Future of Manufacturing and Core capability Development

ManufacturingSome of the trends noted as the future of manufacturing are:

1. Manufacturing process as a critical core competence

2. “Product as a service”,  as a core part of the overall value proposition.

3, Remote Diagnostics

4. Sensor driven data as the basis for product and service Innovation

More details on these evolving core capabilities can be seen at the end.

We at STIMS Institute execute projects and offer programs for companies – big and small – to advance their internal capabilities and work force skills to position themselves as leaders in each of these emerging growth areas in manufacturing. Unlike most other companies we do not offer a “strategy” and leave the implementation in your hands. Instead we work from end to end, from concept to commercial impact.

As a recent example we identified precision grinding process as a core competence for an auto parts manufacturer. Recognizing that a specific grinding process was the bottle neck operation, we used our process signal monitor to obtain the vital signs of the process. The signal was further used by our expert team trained in the System Approach for Manufacturing processes, to optimize the process and reduce the cycle time by over 40%. This in turn translated into a direct increase in line through put by 40% without any additional capital or plant and equipment investment required!

For more details please contact us

Details on evolving core capabilities in manufacturing:

1. Manufacturing process as a critical core competence: In the case of global agricultural-equipment manufacturer Deere Inc., a key driver for the tractor-manufacturing strategy hinged on drive trains, says Pat Pinkston, Vice President for Global Platform Services for the firm’s Agriculture and Turf Division. The complexities involved in the drive train manufacturing are:

  • The size and configuration of the drive train
  • Customers want different types of transmissions (power shift, infinitely variable, collar shift, or low cost) as part of the overall drive-train package. A further challenge was Deere’s competitive decision
  • Lead-time for building a drive train from 40-50 days to one week.

These layers of complexity quickly made it apparent that the Machining of drive-train castings and gears had to be a core internal competence for the company. That one strategic decision rippled across the length and breadth of Deere’s revamped Waterloo, Iowa manufacturing facility. “We’ve got to continually understand what’s core, what’s non-core, and as the technologies, business, and customer requirements shift, be able to reassess and figure out how to integrate all that in a way that allows us to differentiate.”

2. “Product as a service” as a core part of their overall value proposition.  Rolls Royce no longer just sells airplane engines to its customers. It has a service-based offering called TotalCare that sells only the hours that each engine is in service. From scheduled maintenance to overall management, Rolls Royce guarantees an engine’s performance by taking responsibility for its operations. TotalCare transfers the risks and costs associated with an engine being offline to the vendor, thereby making reliability and uptime major incentives for both the customer and Rolls Royce. Rolls Royce is part of their overall value proposition.

The aerospace/defense industry (74%) and medical device manufacturers (70%) plan to lead with performance-based contracts. Similar to the Rolls Royce TotalCare solution, these contracts are about a customer paying a vendor based on performance against a set of defined metrics.

3. Remote Diagnostics: Ingersoll Rand’s Ohio-based Trane Intelligence Systems, data from 10,000 pieces of  HVAC equipment around the world are managed remotely. Remote diagnostics enable Trane Intelligence Systems to know ahead of time when HVAC filters need to be changed, when oil or bearings are starting to wear, and when Trane should plan for maintenance. Harvesting this data from operations enables more efficient service scheduling for Trane while maintaining uptime across customer premises.

But along the way to better product maintenance, Trane Intelligence Systems realized that the same diagnostic data could be used to adjust the internal temperature of buildings in order to extract better energy use from the equipment. Given that air conditioning can amount to 40% of a commercial customer’s total energy bill, this is not an inconsiderable value proposition.

 4. Sensor driven data as the basis for product and service Innovation: After several product generations spent improving the core compressor design of its Copeland Scroll line of refrigeration units, Emerson’s Climate Systems unit made a strategic decision to focus on sensor-based diagnostics as a differentiator. According to Charles Peters, Senior Executive Vice President at Emerson, the initial reason for equipping the compressors with sensors was to measure use and changes in electric amperage, which is often an indicator measure for a variety of performance or fault conditions.

Source: Manufacturing Transformation – Achieving competitive advantage in a changing global marketplace http://support.ptc.com/WCMS/files/155978/en/Manufacturing_Transformation_Report.pdf

 

Message on Manufacturing Day!

mfg day

      Today (October 3, 2014) has been declared as the “Manufacturing Day”. We offer a few thoughts and a message from the STIMS Institute along with a few examples of our accomplishment for the advancement of Manufacturing across the globe. Manufacturing today is more than making the stuff! Yes, manufacturing is part of a continuum I concept, design and development. It is the step prior to marketing and revenue generation. Beyond that “manufacturing” continues to be a black box! The biggest issue that has been identified as the problem for the growth in manufacturing is the availability of suitable work force for the modern manufacturing operations. Manufacturing is a collection of processes. Each process is an “input/transformation/output” system. The “transformation” or manipulation of the physical events is at the heart of any manufacturing activity. The knowledge, know-how and skill pertaining to the manipulation of the pertinent transformation and the skilled workers who can manage this effort are the core needs. Such need is abundant and wide spread across the globe. The development of such work force requires Knowledge Integration as the core skill. Recently STIMS Institute conducted a small experiment. We trained two young graduates in India, fresh out of college after their UG degree. The training period was about for eighteen months. The training consisted of mapping the industrial manufacturing processes, as a system. They were equipped with the tools and ability to diagnose the vital signals of specific processes. They were then introduced to an auto parts manufacturer, for whom a specific operation (OD Grinding) was the bottle neck operation. By systematically exploring this process and the reasons for the longer cycle time, this young team was able to reduce the cycle time by over 40%. The net result was an increase in line through put of over 20%! Two young engineers adequately trained in the System Thinking and Transformational Skills, with a suitable diagnostic tool and less than a week of work achieved the line throughput increase of over 20%, while maintaining all quality parameters and with no requirement for additional capital investment! The core capability of the team was the Knowledge Integration skills that combined the knowledge of a machine tool builder, technical staff on the shop floor, a global expert – all brought together through in-process data and its scientific analysis and understanding. We at STIMS Institute also believe that Product Innovation, Process Innovation and Applications Innovation are the true growth engines for any manufacturing company. To this end we have been collaborating with Mass MEP and mentoring professionals to foster manufacturing Innovation through an array of Process Innovation capabilities.

Work Force development for the 21st century manufacturing has to focus on two critical trends: The evolution of the Binary Economy and the relentless need for enhancement of Professional Effectiveness of individual employees as well as that of organizations and Enterprises. To promote and convey these concepts we have recently published a book that highlights these needs and the resultant capabilities required. We have also translated these into educational courses for UG students and work shop for industrial clients. We have also incorporated some of these ideas through news articles, special lectures for students and practicing engineers and managers.

To quote one of our students in an M.B.A. course at Southern New Hampshire university: “This is my final class of my MS program at SNHU. Prof. Subramanian is the one professor of them all that has pushed my critical thinking to the limit! He makes us THINK!!!!!!!!! I have been in management for approx 15 years and it’s like he turned on a switch in my mind that makes me look at what I do and how I do it, in a whole different light! I am so grateful that I got to meet him and be a mental sponge around him for 10 weeks!”

Looking into the future the path is clear – One cannot live and prosper in the “Knowledge Economy” without systematically integrating knowledge available from every source. Also one cannot be successful through manufacturing economy without an emphasis on the science of the manufacturing processes and their systematic exploitation.These apply to individual workers as much as they apply to the industrial organizations, enterprises and the nation as a whole. Due commitment for development of such knowledge based workers and their systematic deployment MUST be the focus of all – from educators, to national leaders. This is not an easy task, since everyone who proclaims to  contribute to “manufacturing economy” and growth in manufacturing sector has to go through this education by themselves at first. This will require a level of modesty and genuine commitment placed at the altar of Knowledge Integration.

Are you a Predator, Enslaver, Competitor, Cooperator or Collaborator? How about your business philosohpy?

Recently I came across an on-line survey:
Take a PtC Survey — “Compare Your Collaboration Type” & “Motivations that Drive Collaboration”

The survey and the report (which you see after taking the survey), indicates that:

• Most people think that they are collaborators or cooperators.
• Also one needs to know the distinction between Collaborator and cooperator.

  • When you know this difference, one will realize that mere cooperation is not the same as collaboration.

Yet, in life we find several who are fierce competitors, as well as enslavers and predators. Why does this happen?
In my experience this is due to a lack of the big picture and constant emphasis on it – the system thinking, which is a relentless focus on what one should do (The Technical Outputs) instead on the why this should be done? (The Stake holder benefits or system outputs), It is a shift away from being task oriented individuals and function as the system oriented problem solvers. Thanks to IT based automation, we are all driven more and more into task oriented automatons, at a time when Collaboration is the king and key for success. The result of such collaboration MUST be higher PE Score.

Then how do we make people change? Everyone at every level needs an infusion of the System Thinking together with a clear method to reduce it to practice. Along with that they need a set of additional skills – the Transformational Skills. One of the TS is what we call as the Emotional Intelligence for Innovation(EII). It implies that I work for your success and in turn you work for my success – which is the true spirit of Collaboration.

To develop a Common Language (Another Transformational Skill) we could say:
Predator — I want to win at all cost
Enslaver — I want to win and make you work for me to get there.
Competitor — I want to win, you need to fend for yourself.
Cooperator — I want to win along with you.
Collaborator — I will let you win, but I trust that you will make me win as well.

Now what is your business philosophy? – Are you a predator, enslaver, competitor, cooperator or collaborator? What is your professional philosophy?
Are you and is your business well equipped to function as a collaborator? To co-create value?

The report also implies that cooperation is more of a response to threat or directives or mandates. Hence it is more task-driven, Vs. Collaboration, which is more driven by Mission, Vision and goals.

Don’t expect your M,V and G executed and implemented well until you teach the tools of Collaboration (i.e.) System Thinking and Transformational Skills.
Need help? Want to collaborate? Contact us.

Another positive review on our recent book!

Our recently published book on Transformational Skills has received another (and totally unsolicited) review from a professional in France!

http://www.amazon.com/review/R1GSBLVJ09WY4D/ref=cm_cr_dp_title?ie=UTF8&ASIN=0791860167&channel=detail-glance&nodeID=283155&store=books

The ideas conveyed in this book are:

Tax the rich to create new high wage jobs!

MSNBC program Last Word with Lawrence O’Donnell aired on May 8th an interview with the economist and professor Dr. Robert Reich and the entrepreneur/billionaire Mr. Nick Hanauer. The segment carried the caption: Income inequality issue sinking in with CEOs. http://www.msnbc.com/the-last-word 05/08/14
The theme of the segment: the growing income inequality is increasingly recognized by the rich, who see it as an economic disadvantage for their continued growth in their wealth. Hence they may be ready to part with a portion of their current income through higher taxes to ensure sustained demand through increased consumption and hence economic growth with the potential for more future profits.
“Very wealthy are beginning to understand that unless the middle class and the poor have purchasing power, there will not be enough customers to create the demand for goods and services” mentioned Dr. Reich.
Mr. Hanauer said, “When workers don’t have money, we the business owners do not have enough customers”. He continued “It is self-defeating for the rich people to pay less taxes, while the poor keep getting poorer”…. “We will all be better off if more people earned a little more, while we – the rich – earned a little bit less”
The above arguments imply that everyone who wants to work is employed (but under-paid) and their work truly contributes to the revenue and the profits. This is a far cry from the reality as reported in the Mckinsey Global Report This report states:
•Recoveries are increasingly becoming “jobless” due to firm restructuring, skill and geographic mismatches between workers and jobs, and sharp decline in new start-ups.
•The US needs to create 21 million new jobs by 2020 to regain full employment—and only achieves this in our most optimistic job-growth scenario.
•The US workforce will continue to grow until 2020, but under current trends, many workers will not have the right skills for the available jobs. Technology is changing the nature of work: Jobs are being disaggregated into tasks, work is becoming virtual, and firms are relying on flexible labor (temporary, contract workers). These trends offer new opportunities for creating jobs in the United States, a trend that some companies do not fully appreciate.
•Progress in four dimensions will be essential for reviving the US job-creation machine:
• Develop the US workforce-skill to better match what employers are looking for;
• Expand US workers’ share of global economic growth by attracting foreign investment and spurring exports;
• Revive the nation’s spark by supporting emerging industries, ensuring more of them scale up in the United States, and
• Reviving new business start-ups; and speed up regulatory decision-making that blocks business expansion and new investment.
We agree with the view that the present economic recovery is also “jobless”. We have already described the reason or why the economic recovery is increasingly jobless. The need for new jobs – about 21 million by 2020 – and this may become reality only under the most optimistic scenario , according to McKinsey must be worrisome for the rich as well as the working and unemployed low wage population. But it is the result of a structural change in the nature of jobs created through relentless growth in Digital Technology and its pervasive effect to de-skill all human centered activities and make them amenable to be achieved through computers, network, systems and if all else fails through low wage workers from across the globe. Economists would call this as the “General Purpose Technology”. Hence this “jobless” recovery will be the prevailing pattern across the globe, for years to come. Few billionaires in the US cannot change this depletion of high wage work for the large majority of the population. You cannot get more milk from the same old cow. We need new cows and new pastures for them to graze!
The rich merely giving up their wealth through more taxes as suggested by Dr. Reich and Mr. Hanauer will do no good to increase the wages. Today high wage workers are the professionals, whose knowledge and its application is unique and hence they are rewarded through higher wages. All others are low wage workers, without any unique skills that demand the higher wages. Such higher wages for workers would occur only when the investments are targeted for new job creation for skilled professionals. This has to be coupled with professionals having new work force skills that the employers are looking for. At the moment there is no consensus on: what are the high wage jobs? type of work force skills required? the nature of education required for that? We have already proposed what is needed and how to get there. The new work force skills cannot be more of the same education. It has to be a different education that combines technical skills together with System Thinking and Transformational Skills.
Mckinsey’s second suggestion that US should attract foreign investments and spur export growth will face headwinds from the forces of globalization and free trade. While the US can be at the cutting edge of innovating and creating new technologies and the businesses around them, the larger share of employment from these developments will continue to favor workers in low wage countries. We call this as the Binary Economy. Worldwide there is an emerging economic model, with few number of high wage jobs for those professionals who can create and implement new solutions (Economy1) and a large number of low wage jobs for those who carry out standardized jobs which are highly de-skilled (Economy 2). Large majority of jobs in the middle – that require a random combination of some technical or professional skills and large majority of information tasks – do not exist in any business and in any industry. This is the collapsing middle that used to employ the large number of middle class, middle wage workers. The path way for workers for higher wages through their professional effectiveness is limited. At the same time, the investors have many options: Invest in a few high wage professionals and their output, use such highskilled workers from across the globe (and thus reduce their cost, while gaining their benefits), reduce cost through de-skilling and automation and also constantly de-localize jobs from high wage areas to low wage areas across the globe. It is this lopsided number of options available for the investors vs., very limited and narrowing set of options for high wage jobs is the reality of the 21st century Binary Economy. The few billionaires wanting to part with some of their wealth cannot change the basics of this Binary Economy.
The only pathway left for any reasonable chance for reducing income in-equality is to relentlessly create large number of high wage jobs. Such higher wage jobs to be created will have to rely on the last two suggestions from McKinsey (i.e.) Revive the nation’s spark by supporting emerging industries, ensuring more of them scale up in the United States, and Reviving new business start-ups. Let us face it. These cannot guarantee large number of jobs in the USA. As soon as solutions and such high wage work is conceived of, the investors will find ways to ship them overseas to use lower wage workers! Also IT enabled solutions such as Business Process Re-Engineering, Robots and Programmable Automation may take away more of the jobs, even if such work could be competitively carried out in the USA. Hence it is also necessary to preserve these jobs locally, if any country wants higher employment. This could be mistakenly interpreted as a kind of “protectionism”, which will face resistance from the puritans of free and fair trade, unless the fundamentals of  Global Economy are understood, which is neither free nor fair! There cannot be a viable or sustainable global economy until every nation gives up their isolated effort to protect and preserve their “national” economy. Instead we need coordinated programs and policies for higher employment across the globe. This may sound utopian at a time, when investors are given free reins to make more money across the globe, while the workers are constrained to work and live by the local economic conditions and policies imposed on them within the country, where they live. In other words the interests of the investors and the interests of the country they live in and its population are no longer synergistic. This is an implicit outcome of global economy.
Our point is this: Yes, few rich billionaires may be willing to part with their wealth, if the Republicans can be persuaded to tax them at a higher rate. Even if the Government gets such increased revenue, it is no guarantee that the wages of average American workers can go up –as desired by the Democrats – and hence create the demand for goods and services, leading to a robust economic activity inside of USA. So, we need to accept the reality: Taxing the rich or cutting Government spending by themselves will not spur the economic growth. Economic growth and creating higher paying jobs need not be synergistic. Without higher paying jobs there is no hope to decrease income in-equality for the large majority of unemployed and the working poor.
So, what is the answer? We may need to invest in areas that can (a) educate and (b) employ a large number of skilled professionals,who are also System Thinkers and Transformational in their Skills. This would be like investing in NASA, NIH, rails, roads and bridges, many times over! In order to foster such high wage jobs we need to start thinking of “Technology” not limited to IT – as is the current or prevailing notion – and we need to start thinking of Technology as a means to solve a wide variety of problems and meet a broad range of needs of the global population. These programs can be targeted not only for the immediate needs of the nation, but for the larger needs of the globe as a whole: Drinking water, home and shelter, better climate, low cost energy, better use of natural resources, better use of the ocean and the outer space, renewable energy, etc. Pollution in China need not be a crisis for China alone! Lack of adequate food distribution and hence hunger need not be India’s problem alone!

Such investment has to come from the federal government, since such jobs can be protected and preserved to remain within the shores. Like the peace core that created good-will across the globe, we need a professional core of high wage workers that can work in the USA and create a stream of new solutions based on a wide variety of technologies (beyond IT) for the betterment of the human kind across the globe as well as for a better planet tomorrow. To this end the billionaires can contribute their wealth through higher taxes and the government can target this additional income for creating such high wage jobs. The workers in these high wage jobs through their system thinking and transformational skills have to be truly mindful of the outcome of their work and not become government employed bureaucrats merely pushing papers and administering programs, as they are perceived to be in the current work force. This targeted investment through high wage jobs with the right skill set in professionals will Revive the nation’s spark by supporting emerging industries and Revive new business start-ups, as suggested in the McKinsey report, with one difference: the emerging industries and new business startups may occur across the globe and may not be limited to USA alone. But, this should not be a concern for the billionaires. Instead it will be net positive for them since their source of income is the globe and is not limited to USA. Such growth in new solutions to meet the needs of the population across the globe, will also have its multiplier effect for additional high wage jobs in the private sector and a large number of lower wage jobs. It is a Keynesian type multiplier effect, except the stimulant in our case is Knowledge of the skilled professionals and its integration, as opposed to mere infusion of money through the banks or the government. This is not the trickle down supply side economics of the Republicans. This is also not the unending safety net as the solution offered by the Democrats. It is a solution that accepts the true realities of the Binary Economy in which we live, where knowledge and its judicious application is the king.