No one can argue the benefits of Industry 4.0 technologies—simplifying decision making, elevating productivity and cutting costs to name a few. Getting there has been top of the agenda for executives for the last decade. While the goal may seem simple, the process itself is far from easy. Many food and beverage manufacturers remain stuck—some early adopters having already invested significant time, money and resources into these technologies, while others are reluctant to start the journey. Neither are experiencing the full value. Why? Because Industry 4.0 solutions only work when they are built upon a solid foundation.
Executives pursue Industry 4.0 because the math makes sense; they’ve made a multifaceted cost-benefit decision that weighs a potentially substantial return on investment and key performance metric gains, the risk of missing out competitively, and implementation complexity and costs. For front-line personnel, though, it’s a mixed bag: revolutionary advancements may be exciting for some but elicit concerns about skills adequacy, job security and loss of control for others.
No matter where you’re at in your journey, you’re likely thinking about your next step (or 10). And Industry 4.0 technologies might solve a few of your problems, but not all of them. Without putting foundational building blocks in place, you’ll never get to your goals. Data, assets, processes, projects, technology and reporting all need to work together. It’s what we call a smart culture, and the first step is recognizing that adopting a smart culture involves putting people at your core.
Transforming Your Organization with a Smart Culture
Disrupted global supply chains, increasing costs, rising inflation, labor shortages—these are just some of the challenges for executives and managers in the food and beverage industry today. The need to reduce costs, operate more efficiently and extend the life of assets while also increasing operating capacity has never been more important.
Despite advancements in technology and the ambitious goals of digital transformation, most manufacturers have struggled to see any real productivity gains. New technologies are layered onto broken processes and then expected to be managed by teams who are resistant to change. Combine this with employees who prefer the status quo and leadership who haven’t effectively communicated the process changes that need to occur, and you then have a recipe for failure. A recent report from McKinsey shows that 70% of complex, large-scale change programs don’t reach their stated goals.
What if there was a way of operating that considers not just digital technology but the whole picture of your company’s operations? Adopting a new mindset around smart culture is key to success and it begins with the understanding that tools and technology alone aren’t enough to achieve digital transformation. Instituting best practices to better integrate and manage assets, internal processes and people can help to achieve efficient operations, reduce costs and improve reliability. But many companies struggle to tackle these challenges on their own—being staffed for operations rather than transformation. To lessen the load, trusted partners can help fill the gaps. Tuning into the wisdom of experts in the field is a great way to fine tune these best practices, while helping to support in your creation of a smart culture.
Equipment and Technology are only as Good as the People Who Use Them
Your goal may be to optimize the bottom line, but how do you go about this without making more capital investments or hiring more people? Accessing an available and trained workforce is a big challenge, not to mention the costs associated with hiring and training new workers. It’s easy to get caught up in what you don't have—lamenting the exit of retiring employees and trying to recruit unwilling candidates—or you can focus on supporting the people you do have. This means preparing your workers for change and putting good change management practices in place. Organizational alignment starts at the top. Leadership must be willing to set the vision for the future state, making sure it is clear, specific and understandable. It requires working through what the change means for the organization and its culture, how roles will change, and how to prepare people for new roles.
Investing in training to educate workers in digital technologies can help them better understand the benefits of digital transformation. Training your workforce to use machinery and technology to their full potential is the single most important step in developing a smart culture. This could also include skills development and may potentially necessitate new talent acquisition, such as a reliability engineer or data scientist.
Creating the Foundation for Transformation
Establishing governing principles to create a culture of accountability and transparency involves a new approach. It’s about caring for your people while standardizing processes to improve reliability. A grower cooperative in Florida knows about this firsthand. Dealing with a lack of long-term planning, the 60-year-old cooperative decided it needed a complete transformation of company culture and processes for greater reliability and productivity. The cooperative focused on developing training documents for all company processes, adding a reliability engineer to the team, launching a new communications system, coaching in planning and scheduling techniques, and capturing data on a full season of repairs to plan for the next year. Establishing a process for root cause analysis and loss elimination was key to this approach. Here were some of the results:
- Over 1000 work orders executed, allowing for both material usage and actual labor consumption to be captured for the first time at the site
- Improvements in both uptime and sugar production rates well ahead of original projections: 78.2% OEE results versus projected 75.3%. This represented $1,000,000 in additional margin for the site
- Maintenance spending reductions which exceeded original projections for the first year: $1.6 million versus $0.5 million
So what can you do to increase the odds of success? The key is to make the most of the workforce you have by standardizing work processes you can apply organization-wide. Define metrics for each step along the way and include guidance on how to apply advanced technologies. This can make the process more effective and efficient. Establishing key performance indicators can also help you evaluate how your people are learning, using and improving your Industry 4.0 initiatives. Once you learn how to apply best practices for a smart culture to your organization, you’ll find your workforce becomes more efficient.
Improving Equipment Reliability Is Key, but It’s Only Part of the Puzzle
What happens when you apply smart culture and engineer your entire operation for reliability? You minimize unplanned downtime, extend asset life and take advantage of technology that can help you do more with fewer people.
A great example of this is a leading cheese manufacturer implementing reliability best practices to improve current production capability and prepare for future increases. Safety, employee culture, efficiency and increased production were the business objectives. An initial assessment confirmed the plant had made improvements over time and were emerging from reactive maintenance, however, there were best practice gaps remaining. Each plant started developing its site-specific organizational change plan, which included:
- An online system of best practices and tools for process change
- Revisions to asset hierarchy to improve cost capture and asset criticality
- Training on how to use the software to manage maintenance work and to capture pertinent reliability data, such as failure causes and work order “time confirmation”
- Organizational change management practices and e-training modules that support each work stream
As implementation started, the site teams began to make changes and improvements. They also developed improved production loss reporting which resulted in $1.4 million in downtime improvement projects.
These results are examples of what happens when you implement a reliability improvement project and as this organization sustains their improvement efforts, they are continuing to experience benefits from implementing best practices. Sustaining the changes and driving results will firmly position them to meet future business needs.
The Bottom Line
Getting operations to run better, faster, cheaper and safer isn’t easy, but it’s possible. It takes commitment from leadership, effective communication and the willingness to change—even when it feels uncomfortable. Without effective leadership as a driving force, your digital transformation efforts have little hope of succeeding, resulting in waste of considerable efforts, costs and resources. And just as engaged employees can make or break an organization’s success, effective leadership and communication are critical too.
The success of smart culture relies on people—from leadership teams to the front line. When the focus is on this approach, companies can not only transform from reactive to proactive cultures, but it also makes it easier to adopt Industry 4.0 technologies while attracting and retaining the valuable employees needed to meet goals.