5 insights from MIT: Implementing I4.0

What did I learn from MIT?

During the next five days I share with you the 5 top learnings that may change the way you look at digital transformation in your business - directly from the MIT “Implementing Industry 4.0: Leading Change in Manufacturing and Operations” course for executives to implement large scale technological change in the manufacturing and operations environment. 

I invite you to join the 5 main outcomes - each day one lesson:

• Learning 1: Untap the “hidden factory” capacity of your processes
• Learning 2: The system with the faster O-O-D-A loop will prevail
• Learning 3: Three perspectives to be taken into consideration for a successful organizational change
• Learning 4: It is a journey and it is not complex at all
• Learning 5: Straight answer for the most asked questions in transformation journey

 Lesson 1: Untap the “hidden factory” capacity of your processes  

The Hidden Factory is the set of activities in the process that result in reduction of quality or efficiency which is “camouflaged” below the surface of day-to-day operations and is not known to the organization or others seeking to improve the process. 

I believe, as stated by some experts - as Dr. Armand Feigenbaum - that up to 30% of activities in manufacturing runs under the concept of the “hidden factory” 

One example of it can be a defect that is identified later in the value stream and a high effort is needed to remove it from the process, fix it, and place it back. Without solving the root cause of this problem, it will occur over and over again, and the workarounds will be part of a hidden process. 

One visual sign of a “hidden factory” at your processes is when you meet some of the â€œ7 wastes” and in particular when you find a significant amount of ?Work in process” or shortage in your processes. 

See if you can identify the Hidden Factory in the famous video from “I Love Lucy” below.

I believe we can identify hidden processes by increasing the transparency of what is going on in your processes (if possible real-time) and when you have consistent feedback loops. 

One example of the power of feedback loop is a study conducted in the Netherlands during the energy crisis in the late 1970’s.

As part of the study, it was discovered that households directly located at the local water canals used 30% less electricity than those not located at the canals. Reason for that is that the housings directly at the canals did not have a basement and the people living there had their electricity meter directly on their way to come in / out of their houses. Outcome of this study was that the fact to have the transparency of the consumption of energy every time they are coming in or out their houses triggered a higher sensibility regarding the usage of the energy when compared with the other households some blocks far more away of the canal.

 According to the Lewin equation, behavior is a function of the people and the system in which they find themselves. The new risen technologies can empower individuals or organizations to change their own system.

With the rise of new mature technologies (on Industry 4.0), identifying and solving issues within a hidden factory has become more accessible. Example: In order to capture data from sensors or machines PLCs and to create standard reports with the insights you need to run root cause analysis. Traditional problem-solving tools (as A3s) will continue to support you to fix some of these processes. 

●      Hint 01: You already have more than 70% of the data you need to attack your problems. Do not wait until you have your IIOT set to start your transformation journey. Go Gemba.

●      Hint 02: The addition of a few external sensors to your process that allow equipment condition monitoring, like sensors that detect vibration, temperature, flow and simple image recognition, are more than sufficient to address a very high amount of the problems you likely have in manufacturing.

●      Hint 03: Avoid introducing complete system solutions (Big Bang) before fixing your processes or having a complete understanding of the “hidden factory”. To reduce the risk, it is better to go with the “Think Big. Start small and then scale fast” strategy.

Important to rephrase, the hidden factories represent both an obstacle and an opportunity to implement the Digital Transformation. Probably your current organization has optimized to the current technology, resulting in many hidden factories

Further information: Interview with John Carrier, a Senior Lecturer of System Dynamics at the MIT Sloan School of Management, who spoke about uncovering the Hidden Factory to monthly TULIP meet up event

 You can also watch the episode from ASQ, to learn a little bit more about the concept of the hidden factory and how it can affect any organization regardless of industry here.

Stay tuned for tomorrows learning session