Reason #4: IMplement true data driven decision making
Big Data is changing every aspect of life. Bringing data and data driven decision making is a critical step in the race to world class
Data is disrupting every aspect of life, completely transforming our thinking as data interpretation and the timeliness of our response to that data greatly impacts the results we are getting. Look at how times have changed, for example Uber’s $66 Billion 2016 Market valuation is based on a company whose only real assets include data, app’s for real time data analysis and huge market acceptance in their service integrity/cost. No one can argue how their use and interpretation of data has completely revolutionized and reduced the cost of taxi services around the world. There’s no denying it, if its possible to cost effectively bring accurate, timely data related to how our processes are performing, there can be amazing opportunities to reduce costs and/or re-think current practices.
Now bare with me and step back for a second. Manufacturing a product in the most macro sense, is simply a set of repeatable processes where you take a number of inputs (raw materials, labor, process consumables, etc.), and you run them through a series of operations in an effort to produce a very consistent and repeatable outputs (the product). The more consistent the output the higher your Quality yield. The more efficient and integrated each sub-process step, the lower your costs and the higher your availability. The better the control and understanding of how your process inputs impact the outcome, the greater the opportunity to sustain-ably eliminate waste and truly innovate.
In the past data collection and interpretation was either too expensive or deemed not worth the effort and therefore companies only did it when the cause and effect relationship between process input variability and their desired output was obvious and substantial. For example the controls OEM’s put on their Tier 1 and Tier 2 suppliers are extensive and expensive, but because they know the impact an out of specification sub assembly can have on the performance and quality of the final product its deemed necessary.
Unfortunately, within a facility in the absence of data, companies tend to rely on Tribal knowledge and/or Preventative Maintenance Programs to try and manage and maintain processes in their efforts to minimize negative impact on their product or people. PM programs are extremely wasteful by nature and drive costs up, unnecessarily consume resources and hurt process up-time. They also limit the company’s ability to improve, since time is used as the trigger vs using data to identify the opportunities for overall process improvement and cost reduction.
A great modern day example of the battle that can exist between a data driven culture vs a tribal knowledge mindset is the movie Moneyball. Now no one could argue that there is a shortage of data in baseball, however this movie illustrated how even with excessive amounts of data available to management, it can still be tough to connect the cause and effect relationships that exists when people stick to thinking rooted in the past. Check out this awesome clip that I think illustrates this point beautifully. Link to Clip
The Brad Pitt character, Billy Beane, is tasked with fielding a competitive team, with 1/3 of the total salary budget from his competitors. Unfortunately he is surrounded by a management team that thinks like his competition, managers that rely on their experience and assumptions in what makes a winning team.
Recognizing that the conventional method of evaluating players was flawed, Billy Beane decides to takes a major risk. He buys into a data-driven strategy that works to recognize undervalued players based on a different set of lead metrics. Balancing the player’s market value with a set of leads that translate into actual runs, Beane fields a competitive team spending just a third on player salaries.
The analogies to manufacturing are endless as companies in the absence of good data focus on the wrong metrics in their efforts to achieve their desired results. Data and skilled data interpretation is the only way to truly identify the lead metrics necessary to know what impacts the results in a positive, sustainable and meaningful way.
Where it’s critical for a manufacturer to intimately know all the lead and lag metrics directly associated with the quality and throughput of their part, most do not have the time, resources or systems necessary to truly understand the non-core processes that support their primary focus. This is where Strategic Outsourcing to a qualified provider can accelerate cost reduction and innovation opportunities.
Strategic Outsourcing, to the right provider, can quickly deliver step change solutions to address these non-core processes and deliver true data-driven decision making. The right provider however needs to be able to demonstrate 3 critical aspects:
1. Specialized Expertise: to know what KPI’s need to be measured (leads) and how they impact the desired results (lags).
2. Robust Systems: The systems and infra structure necessary to cost effectively collect and interpret the data.
3. True Data Driven Execution: Focused data driven execution (with measured compliance), where timely data is used to adjust the process to deliver the lowest total process cost.
By combining these three critical elements, with "off-the-shelf" solutions, outsourcing to a strategic partner can deliver a step-change shift in your results.
Its reason number 4 as chosen by the manufacturers polled, however it could easily be reason number 1 as data and innovation continues to disrupt every sector of manufacturing!
To learn more about Zimmark's systems, expertise and data-driven execution go to: Why Zimmark?