Are We Disrupting Manufacturing or Reinventing the Wheel?

Do Lean Six Sigma companies better perform on their digital transformation journey? Are we disrupting manufacturing or reinventing the wheel? Alexander Demmer shares his thoughts on GBR Insights.

Alexander Demmer has spent more than 25 years in operational excellence and business improvement, strategy and implementation, and is one of the pioneers in the integration of lean management, IT practices & corporate culture.

(Transcript)

HANA: Hello I’m Hana Damjan, the Global Head of Content of GBR, and today I’ll be interviewing our Research Director Alexander Demmer who has kindly agreed to share his thoughts as part of GBR’s Insights. Thank you for joining me today Alexander, can I ask you to introduce yourself?

ALEXANDER: Thank you Hana, and welcome. Well, I believe I have a certain affinity for transformation, especially looking at you so young Hana, I feel like 100 years old but anyway out of these 100 years:

  • I spent more than 25 years in Operational Excellence/ Business improvements roles in strategy & Implementation
  • I believe I’m one of the Pioneers in the integration of Lean Management – IT best practices & Corporate culture
  • I went through various type of transformations (Digital over the last decade, LSS, SAP introduction /roll outs, IT centralization / outsourcing) during critical enterprise phases such as corporate mergers and divestments
  • Last but not least I feel committed to missions combining profitability with social responsibility
  • E.g., since the beginning of the Corona pandemic, I am engaging myself as a volunteer to support small and midsized companies on their Digital Path

HANA: Excellent, so you obviously have a wealth of experience that we can leverage on. So let me start the conversation off with this –

Over the last year, COVID-19 has caused major disruptions to businesses everywhere, which has of course forced the development of digitalization, although it’s fair to say, digital transformation has always been high up on the agenda.

Now, almost one decade since the birth of the digitalization looking at the results of many manufacturing enterprises along the digital journey, we see a wide spectrum of performance outcomes – from excellent up to flagrant failures. And I think that among the many reasons behind successful results, a strong culture of Lean Management seems to have fallen into oblivion when there’s in fact a strong correlation between successful digitalization and Lean management.
So, are we disrupting manufacturing or reinventing the wheel?

ALEXANDER: Well, that’s a good question Hana. If you remember during our research activities having a closer look at the homepages of many manufacturing companies, we had the impression they’re pouring us a horn plenty of new (buzz)words:

Customer Experience, Agile Organization, Digital Leadership, Culture of Innovation & Failure, Human Centric Approach, VUCA (Volatility, Uncertainty, Complexity, Agility) suggesting that they have achieved a quantum leap in a new dimension. 

At the same time some publications around Digital Transformation are proclaiming ‘we are shaping a new era of disruption’ disrupting (almost) all previous achievements.

But let’s be honest. Are these enterprises really playing in the Champions League, among the front runners in doing digital or just opportunistically riding the spirit of the Time, “Zeitgeist” as we say in German?

HANA: So, it looks like it has become socially acceptable to celebrate a completely new world with new attitudes, disciplines and behaviors?

ALEXANDER: Indeed. Is it a new world? That’s I think the question we should ask. Because if we’re comparing it with previous transformations over the last decades, we’re seeing a common denominator. The initial focus used to be mainly on technology, management procedures, process standardization …basically everything that we would associate with the “Tool-Set” terminology.

This Toolset has been often overestimated in detriment of what we would call “Mind-Set”, say the culture of a functioning company with all the organization, roles and responsibilities, personified by the people- its employees.

At the end of the day, we arrive at the same conclusion, which is the relevance of the individuals supporting or resisting changes.

HANA: So, to recap, what you’re saying is the digitalization in manufacturing is entering into a maturity phase learning how to integrate the Tool(set) AND Mind(set) of the transformation.

ALEXANDER: Exactly. I think that’s an important outcome of our research as well.
So in a nutshell, why do companies with a Lean Six Sigma DNA better perform on their digital journey?

Spontaneously I would quote the first “Lean-Mantra” which my Sensei (Lean Coach) injected me:

“Eliminate Waste before you Improve”, which translated in the Digital era = “Don’t Automate / Digitize Waste!”

It’s not surprising, that both Lean & Digital share the same objectives, which is to ‘Create Value’

Lean      = Creates value by using improvement methods without IT

Digital   = Creates value by using IT (connectivity) the Industry 4.0 era, as the improvement enabler

So, it’s not surprising that LSS companies are the winners of this race, as they are building on a stable foundation, so this way they have a considerable lead over the other competitors, who don’t have the transformational experience of LSS.

HANA: So, the experienced Lean Six Sigma companies are building Digital on a “culture of transformation”, which is an ADVANTAGE.

ALEXANDER: Exactly.

HANA: Well, great bit of insight there Alexander, next time Alexander and I will be continuing our dialogue around ‘The Role of People’. If you have any questions to pose to Alexander, feel free to comment below or email us at hello@gb-research.com. See you next time. Thank you, Alexander.

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