The Human-Factor Company Type A (Digital) & Type B (Lean-Digital)

Technology alone does not guarantee success; if the people aren’t in support of the transformation. Here’s an example of this argument in a “Digital” vs “Lean-Digital” Enterprise.

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: Welcome back Alexander, last time we reflected on the question “Are we disrupting manufacturing or reinventing the wheel?“
The fact is that technology alone is not a guarantee of success, if the people aren’t in support of a transformation – this is the reality and the “New Normal” in many enterprises today, at least as far as we could tell from our research and interviews. In spite of this fact, we observe more than a handful of companies behaving otherwise. In other words, relying heavily on the technology to the point of taking away the work of their people. What are your thoughts on this?

ALEXANDER: Indeed Hana, we see many companies making the same mistake, let me illustrate it with a simple example:

Let’s consider two companies: A (Digital) and B (Lean-Digital) are upgrading their Shop-Floor IT Architecture with an IIoT Platform. By using intelligent sensors monitoring the key parameters like temperature, vibration, pressure…the shop-floor teams have streamlined the process and reduced the amount of manual quality supervision and sample inspections by 20%.

As an outcome:

Let’s say Enterprise A), the “Digital Starter” company, decided to reduce their Quality Management personnel by 20%. “We can achieve the same revenue with less costs”. Here they are Focused on Cost Reduction.

Then there is Enterprise B), the “Lean-Digital” company, who decides to utilize the employees who now have increased capacity for value-adding activities – in Customer Service. Here they analyze and help resolve problems around the product which arise mainly after the end of the warranty period. Based on this experience the company has now established a new “after-sales” service line, extended the warranty period for this product and this procedure to more products. This leads to improved client satisfaction. At the end of the day they arrive at an enhanced business model with a new after-sales Competence Center that increases revenue and profitability. In other words, the company is growing in a healthy way. Here they are driven by Growth & Continuous Improvement and not by cost reduction.

HANA: So, at the end of the day, we arrive at the same conclusion, which is the relevance of the people, the individuals, that make up a company, they will either support or resist the changes. Next time we’ll reflect on WHY SUCCESSFUL CHANGE MANANGEMENT REQUIRES TOP-DOWN SUPPORT FROM LEADERSHIP. If you liked this video, comment below, and join us next time. Thank you!

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