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Nick Ruhmann
By
February 02, 2017

Beware the New "Instant Pudding"​ of Operational Excellence

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"Those who cannot learn from history are doomed to repeat it." - George Santayana

 

In 1961 General Motors deployed the first industrial robots at a plant in Ternstedt, N.J. Ever since, the technology of "robots" and "automation" have become a siren call across industries coming into vogue every decade or so.

Back then, this siren call was limited to manufacturers, logistic companies, construction, or anywhere manual labor was being used. (generally)

Not so anymore, as the vision and promise of Robots, Artificial Intelligence, and Machine Learning replacing people has arrived in full force across the service industries. The OpEx world now seems full of promises of:

  • Robotic Process Automation (RPA)
  • Low-No Code Software Development
  • Artificial Intelligence
  • Data Analytics

No I don't wear a tinfoil hat, no I don't walk around with a sun dial, and no I don't hate technology.

I love technology! ...pinkie swear!

But that is exactly what all the above are...just more technology.

Technology has existed since man first decided to use something as a tool to make some job easier.

The first rock that clubbed a bird...the first stick that reached a nest out of reach...the first bronze sword used to slay our enemies...the first robot...the first smartphone that has an app for everything, and yes even the first driver-less car.

Technology has exponentially innovated and improved our lives - and will continue to do so at an exponential rate. But the "why" behind it all has always been the betterment of mankind...not the replacement of mankind.

The cycles of looking to technology as the next latest and greatest thing to enable business results (or say Operational Excellence) isn't new. The automotive industry is a great example, having been down this road a time or two.

In the mid 1980's the US automotive industry was definitely feeling pressure from Toyota and other Japanese car makers. There were some real differences in the management methods that were actually resulting in the loss of market share and profits...but instead many in the industry went looking for the quick magical sauce that would return their edge. The reality was that Toyota often had fewer robots and fancy automation than the big three. But CEO's of the big three would turn a blind eye to the hard work answers....they'd go looking for "instant pudding".

The 1980's saw the emergence of new techniques and technology that promised to save labor, boost profits and allow a return to market dominance. There were (and are) a plethora of "silver bullets" that came and went during this time period. (and then again in the 90's, and again now)

Rather than me repeat them all let me link to an excellent article from Bruce Hamilton (the Toast Kaizen guy) that sums it all up better than I ever could:

Seriously read it, read all of Bruce's blog in fact. All of his posts are great.

Traditional Lean - Old Lean Guy

OK...I assume you clicked on the link, read it and you're back. There were all kinds of new tech and software coming available during the 80's for the industrial and automotive sectors.

Bruce makes the point that:

"Interestingly,  all of the alternatives to TPS (Toyota Production System) ...proposed information and production automation as viable solutions to flagging productivity and competitiveness."

Bruce goes on to talk about the 1990's and more "techno solutions" as he calls them.

  • Agile manufacturing, boasted Lee Iacocca at Chrysler, would “leapfrog” Lean.  (There were some good things happening at Chrysler at the time, but it never lasted)
  • Six Sigma, made popular by Jack Welch, CEO of General Electric (6-sigma gets a bad rap, it's not a bad thing. But it's implemented very often in a bad, bad way)
  • Lean Six Sigma (You can read my other post on that)
  • Business Process Reengineering (BPS), an IT-driven methodology aimed at radical process change...but resulted in mostly dehumanizing work and stunting continuous improvement.

Bruce's final summary is basically: stop putting your faith in silver bullets. He ends with:

Over the last three decades, organizations have spent too much time searching for technical alternatives or supplements to Lean without first understanding Lean basics.  I’ve listed just a few of these experiments: MRP, FMS, OPT, Agile, BPS, 6s, ERP.  Perhaps you can add some others. While there may be merit to some of the thinking behind each of these concepts , they have unfortunately diverted attention and resources away from the hard work of learning people-centric TPS.

Note that Bruce doesn't say these methods and technologies are free from merit....but that relying on them without having a good foundation of leadership, culture, and behaviors is basically (my own words here), "a fools errand".

Now Perhaps I'm being too critical, cynical, or even pessimistic; but I fear that the general trend of operational excellence interests are coming back around full circle.

The latest agendas, articles, and whitepapers I'm seeing coming out of Lean, Business Transformation, Process Excellence, and Operational Excellence conferences, blogs, and websites sure seems to have an overwhelming focus again on technology.

Do I think that Machine Learning and Robotic Process Automation are fantastic technology - absolutely. But so was the pneumatic cylinder and fax machine at the time of their emergence.

Did they provide the early adopters some magical competitive advantage? Actually technology can quickly became commodities.

They provided almost no long term boost to any individual company. They did however move the entire human race forward. (yeah for mankind!)

I recently read a whitepaper stating:

“MORE THAN 25% OF WORK THAT’S DONE TODAY MANUALLY WILL BE TRANSITIONED TO BEING DONE THROUGH AUTOMATED AGENTS OR ROBOTIC PROCESS AUTOMATION WITHIN JUST THE NEXT FIVE YEARS.”

 

That's quite possible. It's also quite possible that 10 years ago, we had 25% more manual work than we do today. (or more)

 

 

The reduction of manual or repetitive work is not new. The rate that technology is able to provide new solutions is increasing, that part is always new - no argument there.

But what is it that gets a company to the point 5 years from now to realize that improvement? According to this study, the average tenure of companies on the S&P 500 in 1965 was 33 years. That life expectancy narrowed to 20 years in 1990 and is forecast to shrink to 14 years by 2026.

So technology isn't ensuring that existing companies survive, otherwise we'd see the established companies with the $$ to fund investments in cool new stuff staying competitive. So if it's not the fancy RPA software, or algorithm, or new low code BPMN solution that ensures a company gets to see the next round of tech advances - what is it?

It's people. It's leadership. It's people serving other people and learning together. Technology can be purchased, but human knowledge is the one competitive advantage that cannot be purchased, implemented, or copied. It's earned, and it's earned only through a culture that can respect people as people, puts learning first, and truly believes in pursuing win/win scenarios for all of it's stakeholders.

A PERSON once wrote a letter to W. Edwards Deming and asked for the formula to quality improvement. The person offered to pay whatever price Deming required. This led to what has become one Deming’s most famous quotes:
“There is no instant pudding.”
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