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February 18, 2023

Digital Workplace Transformation Live - SPEAKER SPOTLIGHT : Digital Transformation in Manufacturing and Supply Chain: Smart Factory Strategy and Implementation

Courtesy of Johnson & Johnson's Marcos Paganini below is a transcript of his speaking session on 'Digital Transformation in Manufacturing and Supply Chain: Smart Factory Strategy and Implementation' to Build a Thriving Enterprise that took place at the Digital Workplace Transformation Live - A Virtual Conference.

BLOGS COMPANY LOGO - 2022-04-05T194114.851


Session Information:

Digital Transformation in Manufacturing and Supply Chain: Smart Factory Strategy and Implementation

How do you converge Process, People/Organization and Technology into a successful Digital Transformation in Manufacturing and Supply Chain?
Industry 4.0 brought a lot of awareness about new, exponential technologies. However, technology remains an enabler. If correctly selected, designed and used, technology will augment your operating model and workforce capabilities. But if considered in isolation, it will fail or deliver less than expected.

Session Transcript:

What a pleasure to have you with us. I'll tell you a little bit about Mark, because here.

He is the Vice President of Global Manufacturing Strategy Deployment at Johnson and Johnson Consumer Health marcos' responsible for process design and standardization across the Global Manufacturing Supply Chain Network at J&J, focusing on key processes and technology choices, and aligning strategy with customer needs.

This involves a global network, operational excellence, smart factory, digital and automation, a culture of innovation, and global project portfolio and performance management. Marcus has work at J&J for 14 years, covering all regions and many different functions. Prior to that, he was a Fiat Group, McKinsey, Newell, Rubbermaid, Rubbermaid, and Sylvania Lighting.

He is an Operational excellence export. And has a proven track record of driving large-scale supply chain transformations across multiple sites and regions.

Marcus, you're always a fellow Brazilian who was born in Brazil and went on to to go all over the world with the journey of culture of business and digital transformation.

And it's a personal and professional pleasure of mine to welcome you to the conference.

Absolutely. So it's my pleasure.

Let me just start share my, my, my screen.

And so, shows that for me What a good coincidence, right?

But first, because we're both Brazilians and we come with this energy right, and positive attitudes know to the world, But second, the work you do is fantastic. Right? So this think about sharing knowledge and connecting people.

This is where we live in a world that it's all about connecting. Right.

It's all about learning through communities, knowing great, your own ecosystem of improvement. So, and you provide that note. So I'm always very glad to join your sessions.

Many times I joined your sessions as a participant, because I also see the value to learn, no.

And by the way, many of my link getting connects came across the events that I that you promote that note, and where I learn, as well. And I eventually connected personally to some of the presents, there's no.

So, I love this process, and today we're going to talk about something that is close to my heart, which is smart Factory. Now, a lot has been discussed about Smart Factory.

Marcos PaganiniThere are elements that are facts. Others that are myths.

So it's always important to do a step back and choose in to discuss about the context right, and the concepts around you, smart factory, no.

And so that you can do better choices. Now, it's all about choices.

Now that we're doing supply chain and manufacturing, and the more educated you guys are right about the different possibilities of choices, the better east. No.

It is, because it's not about choosing teach those solutions or what offenders no, tell us every time, but it's it. But it's about building those solutions.

In an organized way, you know. In a way that makes sense, Right? So that's what I'm going to talk today.

So, let me just, yeah, So about me, and Jose already introduced me, but this is just, say, I have a passion for operations more than 30 years in the industry.

I've been in all regions, multiple factories, multiple sites, multiple companies, know, always doing supply chain and manufacturing. Now, I have passion for diversity and inclusion, different cultures, No transformations, no. And I think this combination of factors now makes something really special. So, first thing first, right?

Let's talk about the overall or overarching understanding of smart operations.

Many times, right?

In it since the term, Industry four came into the market about 10 years ago, right?

In the probably effect that happened in Germany in Hamburg.

A lot has been discussed now about Industry 4.2.

And connecting that to the fourth industrial revolution, right?

Now, one thing to keep in mind is that when we talk about the famous fourth Industrial Revolution, we are actually talking about the technology, evolution, now, and we are seeing these now going from Mechanization to electricity, computers and then cyber-physical systems now.

Um, now, uh, but actually, since then since up to this moment, right? When we talked about industrial revolution, we actually refer to the second part of my presentation, is that right off of protection system revolutions. Now we can leave it in the academics, right or the books and everything. When we refer to industrial revolution, we are referring to production ceased, right? And we all know that everything started with Artesian type of production.

Btog CTAAnd then we had the advent of mass production, mainly it started with automotive, but also textiles. And then, later on, when, food, industry, and that increased many other industries now, and then, the third step of the production system evolution has been the Toyota production system, right?

That, in a way, combines the benefits of the previous two.

Industrial Revolution is now, it tries to do, make to consumption, personalized, broad, that snow, but, is still keeping a high scale, and all the benefits of the mass production.

So, it is important to make this station, because you're going to see, through my presentation that I will I'll always be talking and connecting Dick Enology with operating moment.

And my definition of Smart Factory is the combination of both, So using technology and the benefits of technology within your operating system.

So these these merge is really important and most necessary, OK?

Now, I feel important.

Design principles now, as I would call and I go from on the left from top to bottom.

Activities that don't add value to customers are equal to waste.

So, we used to say that in operational excellence at the eighties and nineties note. When we do our process mappings and the like and guess what?

This is Extremely important nowadays as well, right?

So, I, I Am sure that if you map your processes today, when are you a discrete manufacturing boring service operations You will find out that most of the activities and most of the time spent In in your process mapping are not adding value to your customers know.

So you need to start by understanding where you add value and you need to remove what I call flow breakers because it's all about bloat.

Now. The second element is that first the problem, then the solution.

Don't start from the solution, right?

Don't think that mirror Coase, these no solutions, will fix your problem now.

So you start by thinking what are the problems you're trying to solve?

And know, most of you know what? six sigma E is. Right there, PDCA. In balloon terminology. We always start with the problem statement though it is as basic as dead, right. But we need to go through that exercise.

The third element is that you need to think of tunnels rather than an automated system. Now, beached, what's the secret sauce of page?

It's that it brings connectivity, but also intelligence, right? Automation is something that has always exist. That there's nothing new in automation. Automation. Since the advent of the industrial revolution, we've been trying to make a nice activities, know where to use information or, or physical processes.

But what is especially is that when you put people, process, and data, you can make your automation is smart, and when the automation is mark, this process is helped honorables, and that's a very important concept.

The other thing is that it's all about insights now.

Guys, it's, it's, it's funny, right, because I I, on the nineties, there were lots of discussion, was no, and books and research's about data, without value.

Um, And this discussion is back and even more important today because it got so cheap and easy to get data that every company, any manufacturing site, is collecting data for left to right now.

And what this is making is that it's overwhelming the organization with a notion of data that nobody knows what to do with debt.

So before designing systems to collect data through sensors, IOT is, as we call right and bring this data to your cloud, bringing this data to your data lake.

Think of why you need that data, right? And how you're going to use it, and how you're going to translate that data into Insights. thesis.

Because why do we need these insights, right, This direction, but not only data?

The other thing is that the world is not linear anymore.

So think about that. What we call supply chain planning source make the lever.

Event Email Graphic Virtual Conferences (17)-1It's, it's very conceptual, but it's not reality.

You know, the world, it doesn't work like that. No, if the connections are going in multiple directions. And by the way, your customers participating there'll be ceased and low and on your production system nowadays. Right, Because technology. Best Also to the hands of customers and clients, as well. So you need to think about that.

Why, because why do you want to create is an ecosystem of partnerships, right, and in EU as a manufacturer?

Don't have all the power on your supply chain anymore.

You need to orchestrate your supply chain, but you cannot dominate your supply chain anymore as in the past, it was the case.

And final point is that value is maximized, when there is structural change, look most implementations in digital automation stay on the statute.

Now, we substitute the process.

We make it more efficient through digital tools.

We scale to different locations situations. But the difficult part, really, and the secret sauce is a structural change, as we call it, the fables.

The third S And that's what generates new business models, no, connecting directly to customers, connecting to vendors, know, and getting predictive, analytics, or connecting to external indexes and any information that can be knowledge to your system. And this and this and that, and that can generate new ways of doing business. OK, so that's very important. What I'm going to talk next, which is the circle that you've seen the right side Is the expression of the TPS, right? Why do I say TPS?

And by the way, this is the Lean principle, we can give whatever name we want. Because even Toyoda says that they don't do toyoda yet, right?

It's a mentor journey because it is from the main till back your, Before you implement any page that all these elements or most of these elements, are in place. No.

The operational excellence tools, no, being just in time and you don't get in the right way within your network, and, by the way, applicable and adaptable to your system, it's smoother made to that this is in place, right, where you are discrete manufacturing or up service operations, no. And why?

Because, brings agility. Now, the whole idea of lean is to make things more frequently, but at the same or lower cost, So, it brings agility, and, by the way, we're talking about.

There's, I think, nothing more important nowadays than agility, no crazy world that we're living, right. So, you need to bring agility to your system.

It brings less variability of your processes. No. So, more reliability and oh, and more process controls, know, making sure that your processes are robots. No.

It brings continuous improvement mindset, an approach. No.

So that you never and learning and implementing innovation and bringing in of course, disruptive innovation through consortium's no of the stakeholders and it's all about flow. No. I always talk, right?

There's nothing more important in operations than creating hello, flow.

one, because when you have better flows, you have more efficiency, but second, because you generate more value to your customers, know, because when we talk about flow, we are saying flowing value from your operations to your customers, and that's the whole notion of lean operations. Nope.

Now, important, let them make a pause here. Technology must serve the operating system and not the other way. And probably, you've seen even Elon Musk, right.

A major.

Digital guru, I would say right or prediction or say yes, excessive automation that Tesla was a mistake to be precise minus thing.

Humans are underrated.

So how many times I've seen excessive automation in the system, right. And what, what the output or the excess of automation brings.

It brings many issues, right? First, of course, the cost element, right, and all the depreciation and CapEx that you keep.

Second is all the indirect costs that you need to keep to manage that. Heavily capital intensive system, nope.

But but third, is that automation will not necessarily bring you better flow note, and centimes, in many times, a heavily automated processing the needle for your flow, can even cause your process to slow down.

No. So, good balance.

capital intensity is really necessary.

You know, and keeping in mind that humans will always be in the middle, right?

In the center of any operating system, right?

So it's, it's, it's wrong to believe that digital automation must exist to eliminate people. No.

They exist to augment people and to augment people's abilities. Right.

Now, I often refer to a framework, which I use to build smart factory designs.

No, because each factory is a special factory and each factory has its own reason to exist, so you need to think about factory by factory and then supply chain by supply chain and obviously, when you have commonalities across factories, no, there are digital platforms or similar technologies, or when you have commonality across your supply chains, you will do things in a global way when it is specific to single factories or supply chains specific for that.

But it always starts from the left, to understand your business drivers and how your factory sits within your network, Why, what is the reason to exist, and how that plays. Now.

And that's very important, because even for factors that have same technology or same production type, but they are eventually sitting in different countries or different channels, they may have different purpose ..., right. Some may may be more cost oriented, others more agility oriented, other more, others more innovation oriented.

Screenshot (4)Right, so you need to understand what is the reason to exist for that part of the network. The second one is the assessment of flow. As I said, this is a key element.

You need to map your flow through a value stream mapping and then to understand your flow breakers. No because this is the problem you're trying to soap, no.

Then, the third element is about technology, the technology itself. No. And you need really to understand you, IT and OT systems, right? Is for many reasons, no. Because you have ...

you need to see the different ways to connect to your equipments. You need to create a system that has a highest level of cybersecurity and so on and so forth.

Then, the last point, as I said, is people excuse in the organization, know how your people and your organization place within your company culture.

This is a fundamental element because dished up and process must work in combination of yore culture that you're creating for that you have. And then in the middle wells, you do all these assessments. You start making choices. No. On some technologies that are universal, probably you will need a cloud seized. And you need that digital stack.

You need the WI Fi Ceased and you need IT and OT.

Perfect systems. But then you're going to be choices of where to apply: Digital Twin, where to apply smart asset optimization, and then fit for purpose, as I like to call, right?

Don't go away and start implementing digital terrain everywhere in your industry, right? Or in your landscape. It's most probably not.

Pertinent value stream mapping, and I purposely put a very traditional picture of a value stream mapping here today, of course, there are very fancy ways to do process mapping.

There are systems that provide these ability to do digital value stream mapping switches.

Great idea, because you can make it dynamic node, as well. But what is the purpose behind doing a value stream mapping, either within your factory or at the end to end supply chain? and with a combination of physical flows.

And information flows is because by doing that, you will understand your flow breakers as a keepsake and that is fundamental, right? Like we do in quality when you want to do an FMEA, right. To improve the reliability of your system, you will define your critical to quality, swipe your city views, no points in your element, the fragile elements. And then you work on those areas to make it more robust.

The same for flow, right and once you do that and then you're going to have low quality or release times long changeovers defective materials, maintenance issues and this. And this and that which are typical rule breakers then and only then you can go see their digital tools.

To help fixing those problems not in isolation, but within your operating model.

There are multiple digital tools that can do that. Right.

Always combined with people and processes, um, one element that I said which is important is your digital stack.

Right, I will avoid being too technical here because probably you've seen the same page here with different flavors.

No, but basically, we are saying about the architecture of your data connect, collection and treatment note in your system. And we call that digital is basically a what we call Common Data layer. My nose is how you connect to your IT and OT systems now collecting that data and bring into a common data, let you know your data lake.

And then you are going to treat this data and and bring to the Sidney L Plus. No.

Now, watch out right now first.

Well, there are many companies providing that, right?

We, personally and in just and just so, we use ..., but, there are so many providers and they're all equally, very good and strong.

Now, if it's not because you have a digital stack and that you can easily connect equipments and systems, right, that you will want to connect everything, right?

So, you need to be careful, right, because sometimes, the call sees the right or additional stack, can give the wrong notion deck, you can bring any data to the system and then all this data will be treated easily now.

So, you need to be careful, though, because otherwise, you can create a massive issue of having too many too much data. And without protocols. And without the data quality that you'll need to then go to the CTL plus. So, you need to be very careful when you collect, what's the quality of the data, what's the definition of that data? And how we're gonna use that.

All these attributes are very important to make sure that the system is robust.

Um, uh, many of the operational excellence tools that I mentioned before and here are just four examples, but you'll have tons of that.

Now can be, augment it through digital value stream mapping, I just said.

You can be digital maintenance and asset management. So, many times we say Condition based maintenance, predictive maintenance, guys, these are not new concepts.

Now, it exists for decades, really, no predictive maintenance is unknown, technique: know, that we're doing a reliability and asset management.

But now, what's the secret sauce is that you can better ****** the data, and better understand.

Marcos PaganiniThe phenomenon was known, the drivers know behind that data, and bring that intelligence to your maintenance excellence systems now, and call it. So you need to have a maintenance, t.p.n. type of process.

Note, total predicted that predictive maintenance to then have them most of the same for Equipment Changeover.

You can do, These don't, and it's man sees this, right, and use machine learning, artificial intelligence, to make that process stronger.

Problem solving the same, right. With PDCA or six Sigma approach is in the light.

Now, that's the way we use, it's only one example, what you'll see here for each keys are proof of concept, what we do and we force ourselves to think about the business processes that parameter trenches. So what is the how that connects to your Johnson Joe, our Johnson Johnson production system.

So the operating model, and how beach, the will make that, right? So we, we make this sequence to make sure that the sequence is correct is just one example. We have, of course, doses of these, and it just wanted to illustrate. So the message here, what is the message? Right?

We need to co-ordinate technology with process, with people.

And by the way, um, an operating model and therefore digital can only work if you have the right culture as well.

Don't forget that Great Britain in the stone and keeping your organization high year kiszko, difficult bureaucratic.

It doesn't work, right? Because the benefit of each though is to democratize data.

Right, is to bring our autonomy to your shop floor, and to let your people take decisions. Know, if you don't change your culture, you're not going to be using teach them the right way. So you don't want to create these, though, to create control tower snow. So it's not about control towers is about enabling towers now. So think about that. Got it probably, culture, and people are going to be the most important element of your digital implementation.

And if you do well, you're going to have a much better performance from your operational excellence. If you don't do Well, this slope will go downwards. That's the bad news. No, I just want to finish with one page, which I always do.

We are working operations, working factories, thousands of people, multiple locations. And I can never finish the presentation without talking about communities. Know, that must receive adaptation.

If you have passion for Dad, please connect to me in the LinkedIn.

We are in a campaign now because there are thousands of children in the island of Madagascar that are dying because of the current situation with gold in the economy. And I do need your help, guys, too.

To feed 1600 children every day, and we want to do that for at least three months to we can breach to a better situation in in the island. So, please connect, and I can show more and show how you can contribute to that. So, we have that.

I stop my sharing here, and we can.

Chat, so that I, that's all for for the presentation.

Always Annett outstanding presentation, a masterclass on what it takes to really implement digital transformation effectively.

So, Mark has lots of interesting comments that the has surface by one of the things that you pointed out, which I think is very important is that, you know, some of the, some of the concepts are not new.

They have been around for a long time, and the fundamental foundational concepts like total preventive maintenance, lean principles, right, and so on, so forth. This is an interesting observation that was supported by our audience, that, sometimes people will talk about technology, and talk about new ways of doing things. And often, they don't understand the fundamentals.

And they, they talk about, as if predictive maintenance, as you said, it's something that, it's an emerging field of, some sort that, Just now, we started using data to predict, you, know, how we're going to maintain systems, and where in reality, as you pointed out, that has been done for decades. You wouldn't be able to survive as a manufacturer if she didn't do that, well, maybe you can't survive, but certainly not thrive as a manufacturer, if she didn't do that.

Event Email Graphic Virtual Conferences (17)-1So um, so in that journey of maturity, let me ask you, the question is, if you are, if you want to have, is my operations and you and I apologize if this sounds redundant, because I think you cover already, but I want to emphasize because it's an important item from the, from the audience.

If you want to.

If you want to have smart operations, you need to start with the sun's important fundamentals, which you mention, But I would like you to really emphasize them one more time on what are the things that you need to have in place before you start trying to automate, before you start trying to digitally transform what kind of setup from culture to basic systems.

What are some of the, the, the fundamentals, if you will, floor for great manufacturing?


And, of course, we would spend here hours, right? But I will, NASA, for sure, be succinct. Here. Look.

It's like, when Toyota started in designing their system, they didn't abandon mass production systems, Right?

What, for the web other companies do, they took them most of that. And, and, and those from the length of the mass production system of creating process standardization.

Of creating reliability, of creating repetitive tasks.

No quality controls no SPC as we call it the physical process control.

These are needed writing the production, since we're talking about operations of production, which has a repetition, right?

And they and I always say it's also very poor therapy snow So you need to have the basics right, because there is no way you can you want to improve speed or to bring dished out.

If your system is not reliable, it's it's not consistent, Right? So that's where the side of process No.

The second element is of course people No. So your people must be motivated.

Your people must Have curiosity now to learn and to give ideas, know, you need to have diversity in your operations to have different ways of thinking.

You need to think about being less of a command control approach and and more supporting and coaching of your system.

So, yeah, I call those basics, right, but we all know, it's not that simple, right? Because when you create habits, right, it's difficult to evolve. And it's an never-ending story, right? But these are needed from foundational elements before you can dream about very advanced production systems.

Important topics that you cover there, and specifically on culture that you touched a bit on.

The question sometimes becomes, what is the right culture to have? Because cultures can be shaped in so many different ways. And, but there probably are a number of common denominators that you see when it comes to culture and behaviors.

What are the types of cultures and behaviors that you believe need to be in place to enable the smart operations to enable a successful digital transformation? If you can talk a little bit more about just the values, the code, the cultural values, and behaviors that you see sometimes. And I know this, because you have this experience, like, I do a large company where culture is not this uniform thing that everybody in the company has the same. I mean, from probably the manufacturing facility to manufacture facility, you have slightly different cultures.

And if you look across your own system, what are some of the behaviors that you're trying to build in that culture, so that you'll have effective digital transformations?


Listen, for me, it's not different than your own family, your own community, and so forth.

one of the most important elements in any system that aims to have human co-operation, right? Because supply chain is nothing different than a human corporation, right?

one of the most important principles is trust.

So, you need to have a culture where trust exists, because I tell you, from that moment, and we all experience systems withdraws. And without trust.


When there is no trust, man, I tell you people work for money.

People count the minutes, they're working.

People do their worksheets, people.

Mislead the system people don't bring in the ideas people don't comply, right? So, it's impossible. Right. To have a system that is high performance.

When there is no trust, No. So for me that in an easy to say, difficult to do.

Because human beings are not simple, but when you have trust, everything flows and, and, and I tell you, when you have trust, you have these organizations that don't even care about what we call span of control Y you have span of control. Right? You say, OK, my organization, I need to have from 8 to 10 direct reports, because that's the level that I can manage, right? It's, because there is no trust.

Because, when there is trust, and when people are, of course, well trained, committed in the audience, the other elements of having skills.

You can have endless number of spec, as we call, right? So, you need to have those elements. Trust.

Our dawned on me, the right behavior, of course, high skill is no end capability to know, that's what I call buy the right culture now. And when that happens, it is magic. I can tell you.

Marcus, we are running against time here, but I want to say it's always a pleasure to learn and share with you. Thank you for taking your time. It's a long day already for you, end of the day there is Switzerland, and you're here sharing your wisdom and expertise of our global audience, and we're all very thankful for that.

Absolutely, my pleasure, anytime. Thank you.

Ladies and gentlemen, that's Marcus Paganini, global leader Manufacturing at Johnson and Johnson, directly from Switzerland, sharing his wisdom and expertise with him are very thankful for that. This wraps up our session today. We had tremendous coverage from legal practices to transactional processes to manufacturing related manufacturing industries here. Great cross industry leaders sharing their experience and their expertise with us. If you want to, if you want to learn more, if you want to engage, go into the LinkedIn posts on there my name in this conference, ask questions to our conference speakers connect with them directly by they're all hyperlinked in the post for this conference, thank them for sharing selflessly and generously it with us. Tomorrow.

Screenshot (4)Our last day will pack another for great cross industry leaders of culture of business and digital transformation. We're gonna start date tomorrow with Crash ramanathan, ... Director of Business Process Re-engineering and Lean six Sigma, a J bill.

Another great, a world leader in manufacturing, who has been implementing incredibly powerful, meaningful culture of business and digital transformations across all others, all of the business units.

That will be followed by a deep dive on unleashing digital Twins to optimally empower the work place, and we have two great leaders, Hosni as dry and Jean DeVries, who are, who have over 30 years of experience of leadership, experience each on, on digital transformations across multiple industries.

So they're going to discuss with a little bit of a deeper technical dive on digital twins, and their use, and how they're accelerating digital transformations in many industry segments.

That was followed up by refocus, again, on customer experience, and employee experience, and the digital transformation journey. And we're gonna be having a discussion with Roger Godfather pool, who is Dan Surprises, vice-president of Software Engineering, for Wolters Kluwer. And he is going to be discussing with us, employees, as customers, and these, though, employee engagement.

So, Roger has done leading work in this area. He's going to share with us on his presentation tomorrow. And, we're going to wrap up the day tomorrow with the Customer Success Measurement, Analytics and Data Management Leader, Francisco, mulisch, money, and the lashes going to discuss with us how we achieve and sustain secure business automations for digital workplace transformations. So, he's gonna be talking about this digital transformation. But, the role of security, transformation in that digital transformation, and how they must go hand in hand, and he is going to wrap up the conference for us tomorrow, so far out. Whatever you are in the world, Have a great rest of your day, and I look forward to seeing you at the same channel tomorrow.

Take care, everyone.


About the Author

more-Apr-05-2022-02-10-01-69-PMMarcos Paganini,
VP, of Global MAKE Strategy & Deployment,
Johnson & Johnson.


My current role as Global Vice President of Manufacturing Strategy involves bringing outside-in and innovative improvements. Includes knowledge, expertise and process standardization across the Global Manufacturing and Supply Chain network focusing on critical choices on key technologies and capabilities aligned with customer needs.

Global Network footprint, Digital Manufacturing Strategy, End to End supply chain optimization, Agility programs, Culture of innovation, Change management, Operational Excellence and Performance/Program management are core foundational elements under my leadership. 


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