Five Strategies for Leading an Intelligent Factory Transformation

Intelligent factory transformation is a process that industry leaders are using to create a culture in which change is expected, failure is not penalized, and experimentation and learning go hand-in-hand. A recent Intel study of manufacturing leaders and workers, that I co-authored with my colleague Irene Petrick, underscores the role that leaders must play in developing a digital culture to support the development of “smart” factories.

The findings from our study, along with anecdotal discussions with industry leaders, has helped us to articulate five strategies to help leaders implement the next wave of digital transformation toward Industry 4.0. Those strategies include strategic planning, stakeholder engagement, process integration, workforce training, and evangelical leadership.

Understanding Transformation Pain Points
Before we review the five strategies, here is a recap of some of the pain points companies are encountering in the transformation process. At the 2018 Hannover Messe and Smart Industry conferences, as well as at the 2017 Frost & Sullivan Manufacturing Leadership Summit, industry leaders articulated the challenges they are facing getting their organizations primed to deploy Industrial Internet of Things (IIOT) technologies to transform their factory operations.

Skills gaps, retiring workers, and changing workforce demographics are all top-of-mind issues. Leaders believe that transformation from the shop floor to the boardroom will require careful orchestration. Our findings suggest they are right. Our study shows that today’s manufacturing environment is increasingly populated with younger workers who are anxious for change. Engaging them effectively will be essential in supporting the evolution of Industry 4.0.

The results of our study highlight the obstacles to factory transformation. These issues range from workers concerned with the pace of change to leaders encountering resistance to change from their employees. Overall, 56% of the obstacles articulated in our results were related to culture and leadership. Significant barriers include distrust of new technology and skepticism at the C-Suite level regarding new technology — despite the promise of increased efficiency.

One study respondent attributed some of the resistance to a difference between current leadership and emerging new leaders in his company. “Culture is always a fix it, reactive mentality, rather than proactive about how things can be different in the future,” he observed. “Some of the upcoming leaders view technology as an enabler for them. But the ones that are retiring now struggle with it.”

For leaders working to engage their entire workforce in support of intelligent factory transformation, here are five strategies to consider:

1. Share the vision of the intelligent factory and the path forward with everyone in your organization, including line workers and managers. Our study suggests that workers at all levels want to be engaged in the planning process. They want to have meaningful input, and are seeking ways to have their voices heard. Leaders will get broader support from all stakeholders if the people whose roles will change have a voice in how new technology can be used to improve the status quo.

“When rolling out the new technology, we really need to start with proper explanation of what we’re doing, why we’re doing it, and how it’s going to help people in their various jobs do their tasks,” said one of our study participants. “By really being transparent and explaining what will happen, it will help to get people’s buy-in, and it will help engagement.”

2. Engage workers who may be impacted by change. Leaders need to ask the workers who will be most impacted by intelligent factory technology what they consider an ideal workplace experience, and what obstacles stand in the way of that experience. Those suggestions can then be used to help formulate a change management and design process strategy.

“If I have to advise my company how to make changes in new technology, then I would ask them to discuss the idea with everyone, and especially with those who are associated with that technology,” said another of our study participants.

3. Connect and integrate processes and involve stakeholders at all levels, inside and outside of the company. Industry 4.0 and the IIOT technologies that support it are not static solutions. Rather, their ultimate value lies in their ability to facilitate connectedness. Isolated instances of change yield limited value when they are juxtaposed with older technologies, networks and software. The key to success is integration.

4. Invest in ongoing workforce training. Education and training will prepare workers for technology transformation while helping to ensure the cultural and behavioral evolution needed to support change. Leaders committed to Industry 4.0 need to avoid the misconception that training will increase attrition rates, and instead view workforce training as part of the company’s investment in building new skills.

Some of the dividends from investing in a digital culture include:
• Improving productivity by empowering workers to harness data-driven technologies to optimize their use of equipment and processes.
• Building a sense of trust by updating engagement processes and performance reviews to implement new ways for measuring and rewarding worker performance.
• Engaging workers at all levels to embrace the importance of providing feedback to support an increasingly automated system capable of implementing continuous improvement solutions in real-time.

5. Prepare for change by making the intelligent factory transformation part of a new company mindset. As we discussed in another recent blog post, change is constant. Visionary leaders in the Industry 4.0 transformation process also need to be educators and role models. The key is to enable all stakeholders, from the factory floor to the executive suite, to help shape the transformation process.

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Faith and Irene Petrick, PhD, Senior Director of Industrial Innovation for the Internet of Things Group @ Intel, are the co-authors of the report: Industry 4.0 Demands the Co-Evolution of Workers and Manufacturing Operations. Learn more about the report and the survey results that facilitated it.

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