SMEs should scale using Digital & Industry 4.0 technologies
Problems during strong growth:
Small and mid size companies typically face a number of problems when it comes to scaling using technology. Everything works well when business is steady state. But during a steep economic upcycle like we have now, there is a hustle to rush production and suddenly they are unable to use data effectively to gain visibility; products don’t move out on time, WIP spikes due to problems, product development targets seem to have been missed, they lose customers to quality, they are unable to participate in bids on time. Once they grow beyond a certain size in turnover and people, it is harder to coordinate activities and align everyone’s effort in the same direction. Solution – implement robust systems so that data is collected and made sense of and actions taken based on data rather than on hearsay.
Use technology with care & diligence to scale up – Digital and Industry 4.0:
Up until now, companies may have used bits and pieces of legacy systems or hotch-potch solutions cobbled together in a hurry, whenever they had to respond quickly customer requirements, or worse – do some fire fighting. But today it is Industry 4.0 – we have a slew of new technologies, applications, devices, electronics and IoT solutions that larger companies are using stay ahead of the game. SMEs (Small and Mid-size Enterprises) lack the awareness of such solutions. It is impossible to have in house resources with time, skill and knowledge to evaluate such solutions. The talent in SMEs is typically hired for execution; they is always a hustle and an eternal constraint for bandwidth and time. Perhaps the owners or top leaders with insight across the organization may be in a position to evaluate the returns of implementing such solutions. But they are even more hard pressed to look into this level of detail. Evaluating these solutions requires a degree of knowledge to be able to compare available solutions, features required, marry internal processes with the technology solution, weigh in on cyber security and information security concerns, undertake cost benefit analysis, and most importantly implement all this without breaking the company. Silos within the company need to be broken, processes need to be reengineered and re designed, old ways of doing things have to be stopped, employees need to be trained, everything needs to be explained to them so that they can make sense the broad direction in which the company is headed. At the same time, as data becomes visible and there is more transparency into the process, employees get concerned about their incompetency and their relevance, so this needs to be addressed as well.
Large companies have fared much better in Industry 4.0 and digital:
Overtime, developments have happened in manufacturing, starting with mechanization, moving onto mass production, automation, and then in leveraging connectivity and information technology within the organization. Larger companies have been more effective in moving across these stages and the result – they’ve been more productive and lower cost producers of goods. In today’s age with IoT and the onset of #industry40 , companies are having to use not only software but also integrate it with electronics and hardware to gain insight into data in real time; then use data analytics to makes sense of all this for decision making.
Larger companies are able to do this quite well. For example, #Asianpaints uses a lot of data analytics when they bring together disparate types of data in various formats (which is quite typical – we have data in so many formats produced by various departments), integrate and present it in the form of dashboards to top management so that decision making is quite fast. They also buy systems from MNC companies to help them control and integrate plant processes. The information is made available to frontline employees so that decisions are taken swiftly lower down the organization itself. There are number of solutions which straddle electronics, software, process, production automation and quality systems. These solutions are provided by large MNCs in the form of typical operation management software and systems.
Are the technology solutions feasible? How to go about it?
Many of these solutions are quite expensive and SMEs may not be able to justify the ROI for such technology. But a rapidly changing world and the corresponding disruption in the technology industry has made sure there are a number of start-ups and smaller companies providing solutions similar to the MNCs, and these should be tapped by SMEs in their #industry40 journey. However, this needs a degree of effort, knowledge and research to identify such solutions and marry what’s best for our organization. Technology can’t be plonked in lock stock and barrel; a careful rethink of systems needs to be done, since processes would now be quite different given the use of more data sensors and sense-making using analytics to take better/faster decisions. In a sense, this is no longer the time for jugaad solutions as was done before, but rather needs an application of mind to carefully think through process/systems towards transforming the business using new technologies. This has to aligned with overall strategy as well, so that other departments start to function differently. Only then will efforts be multiplicative rather than just additive. Feasibility of implementing technology and ROI is also important. So bring in the required competence probably in the form of external consultants to ignite efforts that help scale the organization using #digital & #industry40, and overcome difficulties of time, resource competence and knowledge of redesign and change management.