Industry 4.0: Technology and the human side of change

We are all seeing a lot in the news today about Industry 4.0, or the Fourth Industrial Revolution. More terms with the numbers 4.0 added to their endings are showing up. So, we are seeing Manufacturing 4.0, Supply Chain 4.0, and more recently Value Chain 4.0 trying to encapsulate the full end-to-end supply chain under one umbrella term.

Industry 4.0 is usually introduced, or presented, from a business level perspective. The focus is typically on business models and operational efficiency. Underpinning the concept is a lot of technological complexity. Depending on the source these comprise some, or all, of the following:

• Autonomous robots
• System integration
• Internet of Things (IoT)
• Simulation
• Additive manufacturing (3D printing)
• Cloud computing
• Augmented reality
• Big data
• Cybersecurity

What we don’t see is a focus on people. When the literature gets around to talking about people it is often with respect to skills: either those needed to deploy and implement Industry 4.0, such as complex problem solving, or the skills that will no longer be required such as physical labour.

The reality is people will still be needed to perform a lot of their current work for some time to come. During that time, we need to continue operating our manufacturing companies while integrating the new technologies along the way. This means we need to work with existing employees to implement new technologies in a way that is still beneficial to both parties. In fact, the transition will be much longer and harder, without some of those key employees, or fail.

A real-life example that I was involved with was an industrial products firm that was implementing a single Industry 4.0 element, namely the Internet of Things (IoT). The company operated a lot of sophisticated numerically controlled machines across several plants in North America. The project was to install a “black box” behind each existing PLC (programmable logic controller). The new sensors could monitor all the conditions of machine operation and send that information to a central database for analysis.

The goal of the project was to better understand the availability of the machines with a focus on removing impediments to smooth production flow and minimizing downtime – very laudable goals.

Presentations were made to both the staff and hourly (unionized) employees that would be involved in the project – either helping to implement or using the equipment. There was a human interface to the sensor so employees could enter the reasons for downtime. Programmers and shop supervisory staff worked with the hourly employees to get their feedback and incorporate it into the HMI (human machine interface) design.

A few of the devices were deployed as a pilot project for learning, debugging and training. There was a solid effort made to make people feel part of the change. However, as more of the devices were deployed and it became clear that the project was really progressing, there was push-back. Some of the responses from the work force were:

• “You are trying to control us.”
• “Big brother is watching us.”
• “You are trying to take our jobs away.”
• “You are changing the work conditions outside of a contract negotiation.”

So, despite best efforts, it was clear they weren’t enough. What could have been done better?

When it comes to managing change, the person I respect most is friend and change management guru – Chris Edgelow. He has a simple but powerful methodology. I have listed the key steps here, slightly re-sequenced, plus added to them based on my own experiences.

Communicate-communicate-communicate. As Chris says, “If people aren’t complaining that you are over-communicating, then you aren’t communicating enough”. I have found this to be true. Even if the company thought it had involved the right people early enough in the process, there were always opportunities to communicate more and sooner. Communication is more than a series of pronouncements in an auditorium or flurry of e-mails/newsletters. In the absence of good communication, rumours flourish and usually to the detriment of the project.

Communication is vital to address concerns that are present on the factory floor, and in the office. As can be expected, the introduction of changes on the shop floor are usually met with a defensive attitude from some employees.

Build a solid foundation for change. Before implementing changes, it is imperative to answer the following three key questions – “Why is this change necessary? What is at stake if you don’t change or we fail to make the change? Where are we going?” I would add one other point, which is “where we are not going?”

When implementing improvement changes, the goal is not to eliminate jobs but to save jobs. Ideally, we would even add jobs because the changes allow us to be more competitive and deliver more quickly. It may be necessary to have these conversations in smaller groups in order to identify “What’s in it for me”, in some cases down to the level of individuals.

Have a clear and understandable plan for change. This should include timelines, accountabilities, resources, budgets, and feedback loops. The size and detail of the plan should suit the size of the project. This is definitely not a case of one-size-fits-all. Be ready to modify the plan to suit unforeseen events or to take advantage of good fortune.
Support people through the transition. If the first steps have been implemented well, employees know the starting point and the destination. Then the issue becomes helping everyone through the transition. Management and supervision must help people let go of the old ways and support them until the new ways become comfortable and familiar. Remember that how you reward people, even simple praise and saying, “thank you” will help determine outcomes. Ensure that everyone knows what the expected behaviours are.

Focus on the intended outcome. Typically, there should not be job losses because of improvements in loading, availability, and performance. Downsizing, or the threat of downsizing, as a result of an improvement project is the surest way to discourage employees from participating in the change process. After the changes, people usually end up working the same hours but more productively or in new roles.

In case there might be a need for fewer hands-on hours at a work station, companies should consider options for redeploying manpower. Consider implementing the concept of a water spider position – a person knowledgeable about the process who keeps materials and processes flowing within a lean operating system by following standardized work. This involves material replenishment but can also include providing consumable supplies, to prevent potential interruptions to the line.

Another alternative is to use more senior employees to train, coach and support other team members to improve their skills and performance. People with the right mindset often excel in such a role, given the opportunity. This is an ideal way to transfer knowledge and, hopefully, retain key process information.

Managing change can be notoriously hard, but it’s necessary and worth the effort to do it well. Remember to communicate early and often; include those most affected by the changes to be involved in the process. Don’t lose sight of your most important asset – people.

Stephen Cherlet is a senior management professional with FarStar SAC Consulting. He has more than 35 years of experience across engineering, manufacturing, quality assurance, materiel, information and production technology, project management, and lean transformation. Click here to find out more. E-mail stephen@farstarconsulting.com.