The Four Phases of Revolutionary Digital Transformation with Tim Figures (Make UK)

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[General intro omitted.]

Chad Perry:

Today we’re hearing from Tim Figures, Director of Technology, Sustainability, and Innovation at Make UK.

Make UK is the United Kingdom’s national manufacturing membership organization, providing commercial guidance and political representation on behalf of UK businesses in the industrial sector.

In his role as Policy Director, Tim works with 20,000 members, government officials, and all kinds of experts to ensure that UK manufacturing will remain competitive into the future, especially with the ongoing shift into digital technologies.

And one of the ways he does that is to provide a four-step framework that manufacturing leaders can use to make small, progressive, but meaningful changes to their businesses with the help of technology.

So, that’s what Tim is going to be sharing with us today, as well as addressing some of the more common barriers to adopting digital tools.

Tim, great to have you with today.

Tim Figures:

Good to be with you, thanks for having me on.

Chad Perry:

Now, you have a pretty unique vantage point on the manufacturing industry, especially within the UK, where you work with political policy, and businesses both large and small. So you get to see broad trends right down the level of day to execution, and that presumably has enabled you, along with Make UK, to develop this framework. So can you start with some context on your role at Make UK and how this framework has come about?

Tim Figures:

Absolutely, no problem at all. So, as you say, I’m the Policy Director at the national membership organization, Make UK, responsible for technology, sustainability, and innovation. And this really is one of the most critical things facing our sector at the moment, because manufacturing is undergoing a digital transformation just like all other sectors of the economy, but unlike some other sectors, it’s not a digitally native sector. It’s grown up in an analog world and has to adapt and change perhaps more comprehensively than some other sectors in order to embrace the smart use of tech and data to unlock step changes in productivity.

So I’m really keen to work with members and our sector more broadly to help drive that transformation, and think about what incentives or policies, and what support is needed to help make that change really work.

Chad Perry:

If I were a small manufacturing business, and I came to Make UK, or I just happened to have a conversation with you at a conference, what would that conversation look like?

Tim Figures:

The first thing I would do, is I would want to understand at what stage you were along your digital journey. And you mentioned, Chad, a little while ago, the four stages. We’ve identified these four possible waypoints along the journey from analog to digital manufacturing.

And the first one, which we call the pre-conception stage, essentially describes a stakeholder that hasn’t yet really thought about digitalizing and hasn’t really gone into what they really need to do, and why it will be good for them.

The second phase is the conception stage, where people are starting to ask questions such as, how can digitalization help me, what is it, and also looking around and seeing what their competitors are doing and benchmarking themselves against that.

The following stage, we call evolution, which is where people are looking at their current business practices and their current arrangements, and thinking about how they can use technology to optimize those.

But the final state, which is where we’d like to get everybody over time, is the revolutionary phase. And that’s where they’ve been able to use tech and data analysis to completely re-imagine how they produce and unlocking step changes in productivity and efficiency.

Chad Perry:

And what is your sense about where various parts of the industry, in the UK and maybe worldwide, where are they in terms of these four stages?

Tim Figures:

Well, this is something that we do really keep quite a close eye on, certainly amongst our numbers. Now, the last time we asked people about this was in 2018. And we’re going to update our numbers this year. But then, roughly speaking, just under a third were in the pre-conception stage, so they hadn’t really started thinking about this yet. 27% were at the conception stage. And 39% at evolution. There were only 4% of manufacturers who identified that they’d reached the fourth and final revolutionary stage.

I hope very much that when we go back in a couple months time and we check this out, that we find out that people have moved further along the journey. But those numbers do demonstrate that there’s really quite a long way to go in the UK, and indeed, in other countries.

Chad Perry:

So would you say that that’s accurate, is there pretty good alignment with where people think they are versus where you know they need to be?

Tim Figures:

So I think the self-identification is broadly right. I think the issue is not that people don’t know where they are, it’s that people are too far back along the road. And that if the UK and our sector is to maintain competitiveness, particularly in the face of all sorts of other pressures that it’s facing right now, it’s really important that everyone has thought carefully about the benefits that digitalization can bring, and has embraced those opportunities to the greatest extent possible. And that’s at the heart of what we’re doing at Make UK, understanding those technologies and working out how we can encourage and help and support others along that journey.

Chad Perry:

Yah, and I guess that really shouldn’t come as a surprise, because this is pretty consistent with what I’ve seen where, there is kind of like this board distribution of where people are. And so what I’d like to do, is maybe get a better idea of what a person in a leadership role can do based on where they are in those stages.

So the first one would be pre-conception, they come to Make UK, and they’ve identified that they’re in pre-conception, what next? I mean that’s gotta be the biggest hurdle at all, right, is how to get started?

Tim Figures:

Yah, well, because people, you don’t know what you don’t know, do you? Those people who’ve already embarked on the digital journey and maybe have made some initial improvement, and then learned from those and think wow, goodness me, this worked really well for us in this area of our operation, let’s try and see what else we can do.

But if you’ve not embarked on the digital journey, it’s very easy to find reasons for saying, it’s not for us. Some common ones might be: I don’t understand what I need to do, I’m perfectly fine doing things the way I’ve always done them. I’m not confident that I can deliver the change management needed to unlock significant gains to make it worth my while doing this. And I suppose, most commonly, the perception that it’s all really expensive and there isn’t the time or the money available for the investment that’s needed.

None of those things are necessarily true, but I can see that if you haven’t got your head around the benefits that can be achieved from this, then it’s really quite easy to find reasons to look the other way and not do anything about it.

So that’s why really emphasize that, particularly if you are a small or medium size manufacturer, this isn’t that something that you can do on your own, it’s not something that will just kind of arise from within your existing knowledge and existing skills base. It is something that you do need help and support to do. But the good new is that there are plenty of organizations out there, including many funded by the government or local enterprise partnerships, or things like that, that are able to help.

So the first thing we would do when talking to a member where we think there is potential for digitalization is to put them in touch with the local sources of advices and support. Now, those are different in different parts of the UK. But we and our great regional teams do know who can help in every part of the country, so we would start to make that connection. We’re able to provide some of that support ourselves from our expertise, but we would also encourage our members to get in touch with their local enterprise partner, their local authority, local university that’s active in the space, a catapult center, or many of the others that are providing advice and support.

Chad Perry:

So, it’s actually kind of a two-part problem. And this is very consistent with some of the other conversations I’ve been having, where there is this perceived cost and complexity barrier. So, before you ever get started, you don’t know what you don’t know, and you think that it’s going to be very expensive, and it could very well be if you do it, if you embark on this journey without really knowing what you’re doing. And second is that of an urgency problem, which is, if you’re making money now, then why bother? And that’s a good question. It seems to me that the answer is: because at some point these things happen slowly first, then quickly, so overnight you could go from making money to not being able to compete.

Is that something that you spend a lot of time trying to get people to really understand, or is that just something that they do already understand?

Tim Figures:

So I think people understand the need to remain competitive. I suppose what we often talk about, which is why I kind of mentioned benchmarking against peers in the conception stage of the journey, is it’s really important for people to be aware of what’s going on, not just elsewhere in the UK, but elsewhere in the world with competitors making the same things.

You’ve got other countries, including elsewhere in Europe, really pushing forward with digitalizing their manufacturing sectors, and sooner or later if we don’t keep up, we’ll find ourselves unable to compete.

Chad Perry:

The pre-conception is all about mindset shift. What have you seen with some of the manufacturers that have come in and you’ve put them in touch with the local resources? What happened next? Did they immediately start making progress? Have you seen it all over the board? Are people dropping out?

Tim Figures:

Well everyone’s circumstances are different. And actually it’s important to say that experimentation is an important part of this process. Not everything will work. Not everything will work first time. But you’ve gotta start somewhere and try things out. And work out what ultimately works for you.

One of the best examples we’ve seen have been through things called knowledge transfer partnerships. So these are things that universities can bid for, funding, and they’re about connecting experts in universities, often graduate students, with local businesses who need particular skills, but kind of want to take them on in a way that doesn’t represent a long commitment. So the student gets to improve their experience, and the business gets somebody with skills they don’t currently have to help them out. And they can experiment with trying various digital manufacturing technologies, data analysis, data science, and that sort of thing, and see where it goes. We’ve got examples of SMEs who are members of ours and it’s worked extremely well for them, and they’re now manufacturing in a much more efficient way, much more productively than they previously did.

Chad Perry:

Yah, and that sounds like a really powerful way to bridge the gap from analog native, perhaps older, more experienced, business owners and managers, to the digitally native up and coming members of the work force who have a different perspective, and who have a different way of approaching the world, as well as just a broader knowledge of what’s available.

Tim Figures:

Yah, and that’s absolutely right. So, for example, a kind of classic way this tends to work is with data analysis skills. So, we often find manufacturers have listened to advice that they need to collect a lot more data about their manufacturing process, and they do this by maybe installing sensors on their machines or connecting them up to the Industrial Internet of Things. But they then collect a load of data that they don’t know what to do with because they don’t have anyone with data analysis skills. And of those skills are gonna be of a slightly higher qualification level than the company is used to hiring people, that would be graduate level skills rather than higher vocational level skills.

So that’s where links with people like local universities really come in, providing new skills into the business that can then help the existing management unlock the value from the data that they’ve collected.

Chad Perry:

Yah, and in fact I’ve had two conversations just this week that were pretty much the exact same theme, where you’ve got all this data, so data isn’t the problem. The problem is really not even a technology problem. The problem is just figuring out what to do with the data that the Fourth Industrial Revolution makes possible.

Tim Figures:

Yah, that’s exactly right. The concept of the four industrial revolutions as an idea, and it’s one that I do quite like, says that each successive revolution has happened when people worked out how to harness a new source of power. And while, in the first two the sources of power were steam and electricity, in the third it was the microprocessor. And in the fourth, the source of power is data.

That’s essentially what we’ve increasingly worked out how to do, how to collect vast amounts of data, and then analyze it in a way that tells things about our production processes and our working and economic environment, which has simply never ever been able to devise before, or to define before.

That is the key thing. There is no point collecting data if you then don’t have the skills to analyze it, because you aren’t unlocking value. And the kit, the sensors, the robotics, the artificial intelligence and so on, that investment has got to go along investment in new skills, which we typically haven’t needed in small and medium size manufacturing business before. Otherwise the full benefits of the revolution are not going to be achieved.

Chad Perry:

That’s one of the barriers, right? Because you have all of these different angles in a business, it’s not just about adopting a tool. It’s about having the right skillset, having a different approach to it, changing your process.

So all of these experiments that are happening, are these still in what you would consider that first phase of pre-conception, or are we now moving into the second phase?

Tim Figures:

Well, different people are at different stages, but we have got significant numbers at the conception and at the evolution phase now. And so that might be people who are working out how they can best unlock value from digitizing their processes. One of the key things there is actually doing the digital mapping of existing processes. To understand where constraints come from external factors, or where constraints are actually to do with the analog nature of the existing process. There isn’t much point in just digitizing your existing analog process. You’re not going to unlock the full value if you do that. So mapping what you do at the moment, and working out how best to convert that to a digital process is key before you start buying any kit.

And then the evolution phase is about implement that and moving beyond it. So we have got some really good examples of SMEs who’ve been doing that sort of thing.

Chad Perry:

What does that, what does the conception phase look like in more detail? Because I’m curious about how a small business owner who is busy, who really isn’t digitally native as we said before, it almost sounds like they’re expected to be able to define what they need without necessarily knowing what’s possible.

Tim Figures:

Yah, and it’s really important to make sure that conversation happens the right way round. And what often doesn’t work is when someone comes along saying, what you need is technology X or Y. We think it’s much better to start the conversation around outcomes. How can technology and data help you to improve productivity and cut costs based on your existing manufacturing process, and what it is you are making. And the answer will be different for different people, in different sub-sectors and at different times in the lifetime of their businesses, so it’s really really important to have those outcome focused conversations first. There are plenty of experts around who can come and help with that.

In the northwest of England there is a great initiative that we support called Made Smarter, which will provide expertise elsewhere, often places like catapults or enterprise companies will have digitalization advisors who can assist with this kind of thing.

But the absolutely critical thing to do is digital process mapping. That’s looking at the existing manufacturing process that’s going on in that particular business, and working out what a digital version of that process will look like. There’s no point taking an analog process and simply digitizing it, because you might bake in inefficiencies that are only there because of the previous technology that’s being used, which digitalization could very well remove.

So, for example, I’m aware of one of our members where the design of a particular product was suboptimal in terms of the efficiency of its use, but the engineers knew perfectly well that a new design would make that particular product work more effectively, but they knew that a traditional reductive manufacturing process couldn’t make a component to that degree of fineness. But once you switched from a reductive to an additive manufacturing process, and used 3D printing technology to try to make exactly the same part, that constraint no longer applied, the 3D printer was able to realize the more advanced design.

That’s a good example of how you need to go back to first principles when you digitalize. Why have you decided to do things this way, and is that constraint one that is removed by the introduction of new technology. Because otherwise you find yourself still doing essentially an analog process, just with more expensive equipment. There really isn’t any point in doing that.

Chad Perry:

Yah, and that’s a really clear example, and also I think highlights the fact that there can be a full spectrum of outcomes that you’re looking for, because at the highest level, any business of course wants to improve its revenue and reduce its cost. Then you go down a level and you say, in a manufacturing business, you want to improve your productivity, you want to be more efficient, you want to reduce your waste, so there are a lot of different outcomes there. And it seems like if you’re used to doing business a certain way that it would be kind of like prying open a rusty can to try to figure out what all the various assumptions are that are baked in.

So what do you see other members coming to you with?

Tim Figures:

Well, often people come and say, I’ve heard about this great new technology - I want it! And we would say, okay well just hang on a minute, what do you want it for?

I was at an event earlier today where somebody gave a good example. It’s about saying, I want to go somewhere - can I have a GPS please? Well, you can have a GPS but if you don’t know where it is you want to go it’s not going to be much use to you.

Taking people back a step or two and saying, well, tell us about your business, what are you making? What do your existing processes look like? That helps us to make recommendations about which technologies and which skills are going to be needed in order to make the most of digitalization. It’s really important we do that, because if people do the wrong thing, or buy some equipment and make an upfront investment and it doesn’t work out for them, then of course that puts them off completely of the whole idea and that kind of sets back the cause of digitalization a long way.

We don’t want people to be discouraged. We want people to really realize the benefits. But that does mean going through a structured process of working out what it is you want to achieve, and then deciding what the best changes are going to be to make sure that happens.

Chad Perry:

Yah, and that enthusiasm can be a double-edged sword, right? Because, on the one hand you want to encourage people to experiment with small changes, but on the other hand if you just dive in and buy equipment then that goes against the whole, first of all it goes against the whole idea of knowing where you’re going, and second of all it goes against a lot of the advice that I’ve heard that it’s better to start with the business. And this is very consistent with my background in software engineering - is that there are a lot of efficiencies to be had in the backend of a business, and not necessarily just increasing your efficiency on a particular production line by a small fraction.

Tim Figures:

Yah, that’s right. And of course digital processes can also extend things like finance, HR, procurement, and so on. And sometimes this is actually where we see our members starting. They make back office improvements that aren’t actually anything to do with the production process at all, and in doing that they release resources that they can deploy elsewhere in their company, and then think if we can make such productivity gains in our finance department deploying relatively cheap technology, then think about what gains could we make by digitalizing our production process.

The route will be different for different people, but I think the key point is you have to start somewhere, and often starting small is the best way to do this.

Chad Perry:

Right, or even the only way given the limited resources of a lot of small businesses.

Tim Figures:

Yes, it absolutely can be. There’s a great initiative that partners of ours, the Institute of Manufacturing at the University of Cambridge have been running, and they call it Digital Manufacturing on a Shoestring. What they’ve done through some academic research and then a series of workshops, is they’ve demonstrated how cheap off-the-shelf technology, things like web cams and barcode scanners, can be used to make significant improvements in productivity. Things that you can get off the shelf at an electronics store for £25-50, we’re not talking anything more than that.

Chad Perry:

So what does this digital process map look like? What is the actual deliverable and how do you ensure that it’s something that becomes a living, breathing document and not just something that goes and collects dust? Instead, something that compels them to the next phase?

Tim Figures:

I mean, so that’s a very good point. Of course it’s a document that will evolve over time, but it’s firstly about saying let’s understand your existing business. Before we jump in and say buy kit X or do thing Y, let’s understand your existing process. And as I said a little bit earlier, think about what are the constraints and what are the decisions that led you to decide to make this particular product in this particular way? And then you try to unpack that, and work out which ones you can’t do anything about - it might be because a customer demands it that way, or because there’s a regulatory requirement that it’s done to a certain standard or to a certain degree of transparency.

But then also that will uncover the things you can do something about that relate to the restrictions or the limitations of analog technology. That then leads you to construct a new process map, and points you in the right direction in order to optimize this process then I’m going to need to invest in that technology and these skills. And it then provides the basis for the business case that the company will need to justify the future investment.

Chad Perry:

And is this typically a flowchart or a Word doc, that it is the responsibility of the business owner or the managing director, or whoever you’re working with, to build this document, or do the advisors that are coming in, are they helping them construct this document? I mean, what does the actual physical deliverable look like?

Tim Figures:

What it would be, it would be a document, a flow chart which would typically advisors could help the business to develop, or they could ask the questions needed to help the management devise it for themselves. At that point, then it’s really the responsibility of the business to kind of keep it up to date, to adapt it perhaps in relation to changing technology.

Chad Perry:

So, what I’m hearing, and the reason I was asking that, is because if you’ve got, if you’re one of the small business owners in the pre-conception or this conception phase, and you don’t necessarily have access to or you’re not ready to work with Make UK, for whatever reason you just want to try to get started on your own, there is a very clear path to at least doing something, and not sitting around doing nothing. And that is 1) to understand what your business goal, or what your outcomes are in attempting to go digital. And 2) defining what the various processes are in your businesses look like that may be a candidate for some sort of improvement, even if that doesn’t mean buying new equipment or even investing in any tech at all.

Tim Figures:

Yah, that’s absolutely right. And also it might be, you can just start and try a few things. And I suppose if they are more limited things, such as the Institute for Manufacturing propose, then buy a small piece of kit, experiment, and see whether it works, and then that might lead you on to new things.

Having said that, before you make any significant investment or undertake signifiant change management, then we would definitely recommend doing the digital process map. That will give you confidence that the changes you’re making will be the right ones and the money you’re investing won’t go to waste.

Chad Perry:

And that really brings us to the evolution phase, which is really the execution of all of that upfront work. So now you know where you’re going, you know what you’re existing business looks like, and you know, at least have some idea of what you want to experiment with to attempt to make positive changes on that road.

So, a manufacturing business, and any business in general, has almost an endless variety of ways that they can digitize their process. As you mentioned earlier, you’ve got accounting, finance, you’ve got procurement - all the things that an ERP would do. Then you’ve got the sales and marketing frontend, so all of the things you’d find in a CRM. Then you’ve got production planning, and so you’ve got all these things. Where do most people start? Or is it just kind of like all over the board, and what does that actually look like when people start making those investments?

Tim Figures:

Well, everyone’s journey is going to be different. I don’t want to say there’s a standard blueprint that works for everybody. It’s going to be different depending on who you are and what you’re doing. And you know, companies have to kind of find their own way through and our process that we set out is kind of a guide to help them do that.

So, for example, we’ve got members who have started by digitizing back office processes, and so by moving to electronic procurement and invoicing and so forth, they’ve significantly reduced the resources they need for their finance and accounts department, and freed those up for use on the shop floor, and then moved on to thinking about how technology can help production.

And then we’ve got some who’ve done it the other way around. That have perhaps seen what a peer or competitor has done and thought, actually what I need to do is invest in something similar. So for example, we’ve got companies that want to break into new markets that require higher standards of audit and quality than their existing markets, a technology such as augmented reality helps them ensure the standardization and quality of their production process to enable them to perhaps satisfy higher requirements that different markets have. And they’ve seen that as part of their business strategy.

And then others who’ve done it as part of differentiation. Maybe making their products connected using Industrial Internet of Things technology, and by saying well the difference between my product and my competitor’s product is that mine is that provides data and it can be audited and remotely monitored and remotely repaired, and my competitor’s product isn’t connected and can’t do those things, and mine is slightly more expensive but look at all the extra functionality it gives you.

These are just three examples of journeys, different journeys, we’ve seen amongst different members that we’ve connected with.

Chad Perry:

Wow, yah that’s a really good point, because that third example that you mentioned is no longer about what’s going on in your business, it’s about extending that digital value out to your customers through the lifecycle of your product.

Tim Figures:

Yah, so it’s an extremely important part of the move to thinking about added value and a servetization model. I think we’ve all now seen how the provision of things like software has moved from buying it up front to buying a subscription over time, and actually some of the most leading-edge manufacturers are thinking about how manufacturing products can be done in that way. How you actually sell a service, which includes a product, maintenance, and support over a period of time, and often making those products connected is a key element in doing that. If you can remotely diagnose your product wherever it’s installed in the world, if you can mend it remotely under certain circumstances, if you can get upfront intelligence about when it’s likely to break down and inform your customer, and schedule maintenance accordingly, then you’re adding a lot of value which can be monetized, but you’re also delivering a better outcome for the customer.

Chad Perry:

Yah and that can have a whole spectrum of benefits because the cost of including a, pretty much a fully functional computer could be as low as say £20 or £30 if you’re looking at something like an Arduino or Raspberry Pi, which are low-cost, off the shelf hobby computers, and those can pump data back into various cloud software offerings, that again would be on a subscription model, and that data can then feed back into say your ERP. So you could actually get a full feedback loop that would offer improvements in not only your operational capabilities, your ability to stay ahead of problems, but also enable you to charge more for your product or in general just deliver more end user value.

Tim Figures:

Yes absolutely, and of course it also shows you how your product works under different circumstances. So as you’re thinking about its next stage evolution, you’ve got much more data about how the current one works in the field and you can use that feedback when thinking about improvements in future generations.

Chad Perry:

I suspect that going forward, that’s going to be one of the defining attributes of this fourth industrial revolution, this data powering different capabilities, newer capabilities, better productivity, and it’s not just in the existing process of looking at your production line and pulling out your metrics and saying okay, now I need to make better decisions. Which is a very powerful thing, and definitely something that we need to see happen as just a baseline in productivity, but now you’re talking about really getting better visibility into the full lifetime and usage of the product, and that has huge implications because now you can actually adjust what you’re offering, and the industry as a whole can offer better products that are then more efficient and more productive for their end user. So it’s a full cycle of productivity enhancement.

Tim Figures:

That’s absolutely right. And you can also have the data to help you improve your own production process. So you make a next generation of product that’s better and more productive as far as the customer’s concerned. But you can also make it in a more productive way now.

All of these are just really good examples of what you can do with collecting data and analyzing it in a smarter way.

Chad Perry:

Yah, and I think that really drives home the point about staying competitive. Because the newer manufacturing businesses that are coming online, and the businesses that are embracing and adopting this digital revolution, are going to have those capabilities. So it’s not been about whether or not somebody can make something faster or a little bit better than you. It’s about a competitive advantage in terms of a view into the market and what the market needs and what they’re able to offer. And there is no way to compete against that if you don’t have that visibility.

Tim Figures:

Yes, and increasingly customers are going to demand that sort of thing, so a number of members that are at the forefront of adopting this, already are the ones that are making safety-critical in some way or that are used in safety-critical environments like healthcare or aerospace, where audit is absolutely essential, and where customers are demanding to know how a product’s made, that it meets a standard specification, and want reassurance that the product will perform as intended. And maybe would like ongoing auditable data about how it was actually used out in the field.

That’s areas where we’re already seeing value added through connectivity and data analysis, but that could easily be expanded out into other areas as well.

Chad Perry:

This is a really loud and clear message for a small business owner who is well aware that this major transformation is happening, but doesn’t know where to start, or perhaps doesn’t really know fully what the next step is, or doesn’t even necessarily feel that much urgency around it. This is already happening, so it’s one of those things that maybe 5-10 years from now, the market is going to look completely different. The expectations of customers are going to be different, and that’s driven not only by new capabilities coming into the market, but also the maturing of the digitally native consumer base.

Tim Figures:

Yah, I think that’s right, and it’s going to be driven by competitors, whether in the UK or in other countries, getting ahead and being able to deliver products that do that already. And the expectation amongst consumers will be the products are smarter and more connected, and if your product is not, then over time it’s not going to be salable.

Chad Perry:

In terms of adoption and this revolution, the revolutionary phase where companies are actually starting to get results, can you think of any really powerful lessons that you’ve learned through seeing or helping companies directly get to that point in the journey.

Tim Figures:

Well I think the number one lesson is really what I said a bit earlier on in the podcast, that it’s really important to start with the outcome, not with the technology. Really focus on what it is you want to achieve, and then you can work out what technology it’s worth investing in if you do that.

And the second I’d say is don’t forget about skills, including management skills. That firstly, analyzing and making the most of all the data that you’ll be collecting will probably require skills you’ve not needed in your manufacturing business before, that might be higher level skills than you’ve typically required. So a graduate with data science or data analysis experience. Those people are out there, there are lots of universities out there wanting to help and connect with manufacturing SMEs, but there’s no point collecting a lot of data if you don’t accept that you then need someone with the skills to analyze it.

Then the third element, which is also skills related, is understanding that this is a very significant change and it requires change management skills to deliver. We do get some members, understandably, who are worried about whether that’s something they’re capable of doing, and maybe shy away from making those changes because they’re not sure that they can deliver them. Well again there’s help and support available, and this is something Made Smarter does as part of their offer in the northwest, helping up-skill managers to equip them with the skills necessary to deliver a fundamental change into a place that may well have done the same thing the same way for a good number of years.

Chad Perry:

The underlying message that I keep hearing from various individuals, whether it’s business owners or experts or manufacturing coaches, seems to be this idea of failing fast. And in fact that’s what you’re talking about with doing these experiments. And so, I’m curious, what has been your experience with seeing situations where you thought something would work, or a business thought something would work, and it didn’t, and they were able to pivot quickly, and therefore it was a positive outcome, even if it didn’t work.

Tim Figures:

We’ve seen this happen in a number of cases. Often it’s because someone has had an idea or they’ve seen a bit of technology somewhere else and thought, maybe that might work for us. But when they’ve tried it, there have been thing that haven’t worked. So, for example, a technology like augmented reality, that kind of works in some environments, some people find particularly wearing goggles actually doesn’t work for them and kind of gives them health related concerns, or it doesn’t deliver the particular quality improvements desired. You know, try that, buy a couple of them, see if they work. If they don’t, discard them, move on, there are plenty of other things to try.

You won’t know, of course, what works and what doesn’t until you try it. Which is why having a go with these relatively cheap technologies, just experimenting them for a short while, seeing if you can get them to work, and if they don’t, just take the learning experience and move onto the next thing.

This, of course, is exactly how, you know, the computer software and the Silicon Valley type of industries have worked for a long time. Try lots of things, acknowledge that some of them won’t work, but accept that quickly and move on. And there is something similar to be said for here. Obviously, if what you’re wanting to do is commit to a multimillion pound investment, that doesn’t necessarily apply, and you want to be pretty more confident that it will work for you. But if you’re looking at the smaller scale stuff, just have a go, see what works, there’s plenty of inspiration out there, and if it works for you, great. If it doesn’t, then move onto something else on the list.

Chad Perry:

And that’s part of the big story here, right? Is that you no longer have to make these huge investments, even for things like really large software packages - where previously, if you wanted to invest in an ERP, you would have a server that would have to be installed on site, and then you’d have to have essentially a commitment to that. And it’s the same with other technology, like you mentioned augmented reality. What’s happening is we’re now finally getting the downstream effects of what Silicon Valley has been doing for the last 20-30 years. So they, I wouldn’t say pioneered - they adopted this idea that came out of lean manufacturing, of making small changes and releasing small increments. That turned into agile in the software development world, and that methodology or that mindset has now permeated everything else.

And so we’ve got the story of failing fast, and agile, and moving quickly and being experimental, versus having this big monolith where you invest in one huge thing at a time. And you’ve also got the story of the consumer demand for electronics and software and all of these things that have finally made it cheap enough, that something like augmented reality can now be used in innovative ways that may have not really been the intention when it was first developed.

Tim Figures:

Yes, that’s absolutely right. And that fact that things are lower cost really helps. As does the fact that there’s lots and lots of people trying it. So there’s plenty of inspiration out there. Plenty of people who are giving it a go, whose experience you can learn from, far more than it was back in the day when you had to commit multimillion pounds investment up front before you could do this sort of thing.

Chad Perry:

Right. So you’ve go these three examples, these execution paths.

Tim Figures:

So, one was around digitizing back office processes. The second was around improving the production process. And the third was about improving the product by differentiation, for example, by making them more competitive than your competitor’s product.

Chad Perry:

You’ve got this evolutionary phase where you’re finally to start have results. You’re finally starting to take the next steps. Now, some manufacturers are well beyond that. And I’ve been interviewing some of these guys, and it is truly remarkable what they’ve been able to do with some pretty innovative, low-cost tools. And I would say just for the record, it seems like the one common trait among all of these entrepreneurs is that they just wanted to be more efficient, and they just figured out how to do it. And there are plenty of tools out there, but they have to take the steps necessary to do that.

So let’s talk about the fourth phase. What does that look like, and what kind of progress are you seeing among those manufacturers?

Tim Figures:

Well, we’ve got relatively few who are at that phase, as I think I mentioned. But that’s where you’re starting to really reimagine the nature of the product that you’re making and how you’re making them.

So the example I gave earlier about being able to produce a product that works far more efficiently for the consumer because you have eliminated constraints that were only there because of the limitations of an analog manufacturing process, that might be one example where, not only are you producing something more efficiently - the consumer is getting far greater value.

Another example might be that you’re able to significantly reduce the time it takes to bring a new product to market because you’ve moved from a traditional way of designing prototypes and testing them in the real world to designing and testing them in virtual reality. And if what you’re doing is making large and complex products, you want to be able to work out your design flaws pretty quickly, fix them and move on. But if you put it out, and to put it crudely, it blows up when you switch it on, then that is going to be a much more lengthy and costly process than doing that all in virtual reality.

So those are kind of a couple of examples that we’ve seen. Another might be deploying Industrial Internet of Things technology to really increase the amount of data that’s being collected from the production process, so ensuring that you know when to do predictive maintenance and schedule downtime. To put it crudely, if you have a robot that is critical to your production process and it breaks down on a Monday morning, then you have to stop your production line for four hours while you mend it. But if the robot says on Friday, I’m going to break down on Monday, then over the weekend when the factory is closed, the engineer can come in and fix it. And we’re now at a level of data quality from IIoT and artificial intelligence, that production lines can now start doing that sort of thing and providing that sort of information. You can imagine how much more efficient the production process is if you can minimize downtime like that.

Chad Perry:

Right. And I’m sure there are production engineers listening to this that are just salivating at the thought that.

So, I’m hearing good news though. Even though you’ve got these well-defined phases that help you bracket where people are starting, it really sounds like more of a fluid thing. That once you start doing these experiments, and based on the projects that I’ve had and the projects I’ve worked on, you could in fact be moving all the way through to that last phase of truly evolutionary changes in some of your experiments.

So one example I’m thinking of is, you can take something a Raspberry Pi that we mentioned earlier, a hobby computer, and stick this thing on a machine, and you can get some data out of it. And, in fact, depending on the product that you’re making, obviously this wouldn’t apply to everybody, but you might have a situation where you can get some real significant value that may entirely change how you build your products, or how you iterate on those designs. And that would just be in one cycle of experimentation.

So it’s not like you’re entire business has to go from one phase to the next phase to the next.

Tim Figures:

Not at all, not at all. I think the phases help to identify different stages of the journey, and they indicate that is is process over time, and different activities within the company could be at different stages of the process at different times quite easily. But I think, as you say, this culture that I really hope to inspire people to follow with experimentation and seeking help, acknowledging that everyone’s gotta start somewhere. You don’t have to start big. You don’t have to start expensive. All you have to do is start.

Chad Perry:

Yah, and I tend to think in terms of feedback loops, and I think that’s especially applicable to manufacturing because you are building something. You’re getting a very clear result on a production line, and you need to be able to do the same thing in your business with the intangible things as well. So your process, your product improvement process, your back office administration. All of those things are subject to being looked at like a production line with feedback cycles, and the feedback cycle is the data you’re getting back out of there and doing something intelligent with it to make yourself more productive.

Tim Figures:

Yes, absolutely right. This all comes back to the data in the end. As we said, it’s the force that’s powering the fourth industrial revolution. And that is the thing that really underpins all of these technologies, and that will deliver productivity.

To get there we have to collect it, and we have to know how to analyze it, and all of the other things we’ve mentioned in the course of this podcast will flow from there.

Chad Perry:

You’ve got that mindset shift that has to take place, and then you’ve got the tactical side of it, which is figuring out how to use all of these new capabilities to support continuous improvement, to support better productivity, better products, and ultimately to stay competitive.

Tim Figures:

That is absolutely it. Let’s come back to the outcome we’re trying to achieve: improving productivity and cutting costs, and maintaining or improving competitiveness through the smart use of technology and data. That’s what this is all about and why it’s so exciting to be engaging with manufacturers, helping them and inspiring them along this digital journey.

Chad Perry:

Yah and those are powerful lessons. So I think we’re gonna have to wrap up there.

I want to end on one final point, and that is what - I know that we’ve kind of hit some of these high level lessons, but if you could just leave something inspiring or impart some urgency, what would be the thing that you would want to leave our audience with, and then the second would be how to get in touch with you or Make UK?

Tim Figures:

Well, the first thing is, I would say, just be inspired by what other people have done. There are lots of examples out there of businesses of all shapes and sizes that have done incredible things and made incredible improvements and changes, which they hadn’t any idea were possible before they went down this road.

So look out there for those case studies. We at Make UK talk about them a lot, and you can find them, for example, on our LinkedIn or Twitter accounts, through our organizations we partner with like Made Smarter and elsewhere on the Internet. So please do go out there and be inspired by others. I promise you if you look, you’ll find somebody like you who’s tried this and learned so much and benefited so much. So that’s really what I would say.

If people want to get in touch with us, our website is www.makeuk.org. That has all of the information you need. And if people want to become Make UK members it explains how you can go about doing that.

Chad Perry:

Okay, and can they link to Made Smarter through there?

Tim Figures:

We do have the link to Made Smarter. Its website is www.madesmarter.org.

Chad Perry:

Perfect. Well, Tim, thank you so much, really appreciate everything you’ve done to facilitate this transformation. It sounds like you guys are doing a lot of work and organizing this and putting a lot of thought behind it, which is a critical component in addition to all of the vendors and providers out there who are also trying to make better tools. But it really is a matter of education plus better tools. So, I really appreciate everything you guys are doing.

Tim Figures:

Thank you, and thanks for inviting me on to talk.

[General outro omitted.]