Leadership Insights: Smart Manufacturing

Transcript

Amanda Razani: Hello, I’m Amanda Razani. I’m here with Digital CxO. And I’m excited to be here today with Jerry Foster. He is the CTO of Plex. How are you doing today?

Jerry Foster: I’m doing fine Amanda. How are you?

Amanda Razani: Good. Can you talk a little bit about yourself and your history, and a little bit about the company – what Plex does?

Jerry Foster: Right. So, again, my name is Jerry Foster, CTO of Plex, one of the co-founders at Plex. Plex makes manufacturing software that helps run manufacturing facilities, anything from ERP down to quality and production, production scheduling, and control and supply chain planning software – anything that manufacturers would need to run the facility. I’ve been with the company, as one of the founders for 25 years, actually going on 28 years, now I looked at the date. And we actually got our start before we actually officially started Plex inside of a forging company. So the five of us that started Plex actually cut our teeth inside of a manufacturing facility, in a forging facility, one of those old, heavy and hot and dirty manufacturing facilities; and we worked in the computer department in that company, and we built a computer system that basically computerized and digitalized every aspect of that manufacturing company. And that was very successful, helping that forging company become a top player in the forging space as a supplier to Ford and General Motors. And after we did that, we decided, hey, this was pretty successful; maybe other companies would be interested in, you know, purchasing what we had built for this company. So we started our own company on April Fool’s Day in 1995. And have been going ever since. So it’s been been quite a journey.

Amanda Razani: Awesome. And congratulations for going on 28 years. That’s wonderful. So you know a lot about the supply chain. And you recently did a state of smart manufacturing survey. Can you tell us and our audience a little bit about what that entailed? Who were you surveying? What kind of questions were you asking?

Jerry Foster: Sure. So one of the things we started several years ago is we wanted to just get a really good take on what was happening in the digital transformation space of our customers; what they were dealing with, what their thoughts were, where they were headed. And so we started the survey many years ago, asking manufacturers about their processes, about their operations, and specifically around technology and what they were doing to digitize their operations. So we asked this last year – about 1300 manufacturers responded to the survey. And the questions cover all sorts of questions about technology and what they’re doing. Why? What are your plans for implementing technology? What have you done so far? What are your struggles with implementing technology? Where are the pain points? Where do you see yourself in a couple of years, anything that has to do with how they are applying industry 4.0 solutions and technology to their operations. So basically, we’re covering all manufacturers, anybody who makes something is covered in the report. And like I said, we had about 1300 respondents, I believe, which is a great cross section of manufacturing across all the various industries.

Amanda Razani: So I bet you have some interesting insights to share with us today. And I know one statistic that you shared earlier was that 80% of manufacturers did not have end-to-end supply chain planning in place. Why is this? And what can they do about it?

Jerry Foster: Yeah, so the reason they don’t have end-to-end is I think they’re just they’re not quite sure what’s out there. And they’re not quite sure how to take a holistic view of their process, of their operations, and put something in place that they are confident will cover that whole end-to-end. process – that whole end, and work in their facility. So they look at what’s available to them, and they’re like, I’m not sure if that’s going to work or if this is gonna work and you know, manufacturers often go with “if it’s not broke, don’t fix it” kind of mentality. And so sometimes they need a little nudging, a little pushing, a little showing what the ROI is in order to really start to make make an effort. So one of the things that we tell our customers, as you know, there’s a whole lot of additional ROI. There’s a whole lot of untapped potential that is just sitting there in your facility that you are not taking advantage of Um, you know, coming out of a forging facility and cutting my teeth on manufacturing, one of the things that we’re always trying to do is increase efficiencies and have better quality and measure everything that was happening from one end of the facility to the other, including the customers and suppliers on each side. And so that’s something that manufacturers have been struggling with, for as long as I’ve been in an industry – being able to measure and capture everything that happens. And so when we sit down with a customer and say, “Look, there is technology out there now that will allow you to have that view. And here’s what the ROI is. And here is how it can improve your operations that can prove your, your OEE, improve your shipping and improve your quality,” then they start to sit up and take notice. So I think it just, it’s all about giving the manufacturers confidence that there is something out there that they can really sink their teeth into, that’s going to make a difference for them.

Amanda Razani: And I think it’s very important that they do have a plan moving forward, because this affects overall the customer experience, as well as the product quality. So what are some technologies out there that are up-and-coming that would be useful? And how would they implement these technologies in a digital transformation initiatives?

Jerry Foster: So as the current chief technology officer, I can just talk about technology for the next hour and, you know, keep an eye out on some of this stuff. But if you were to ask me, you know, what are some of the technologies that are available to our customers, there are a couple of them that I think really have the potential to make a major impact that come to mind. One is artificial intelligence, you know, smart manufacturing and digital transformation is all about connecting – connecting people, machines and software, and then collecting data from all of those connected processes and using that data to your advantage. And one of the things that people come to me often at conferences and panels where I speak at, they’re like, I just have so much data, I don’t even know what to do with it. I don’t even know where to start. And so we can give you some hints and some places to start. But at the end of the day, there is a kind of a crisis with so much data. And that’s one of the places that artificial intelligence comes in. Because when it’s built to crunch massive amounts of data, and uncover dependencies and insights that you could have never seen on your own just by looking at it or looking at reports. So artificial intelligence really has the capability to kind of crack that nut of what do I do with all of this data? I think the other technology that really is making a huge difference is 3D printing. It’s one of my favorite technologies. And the cool thing about 3D printing is when you look at it this way, almost every manufacturing process that we know, or that we use right now, whether you’re forging, or extruding, or stamping, all of those processes take a block of material, and they remove material until you get to the part that you want. And all the material that you remove is scrap; the 3D printing starts with nothing. And it only prints what you need until you’ve got it – there’s really no scrap. So the amount of materials, the type of materials, the kind of processes that you can do with 3D printing is just amazing. And so I think that really has the potential to increase quality, to reduce scrap, to really shorten lead times on, you know, pre-production type design work. And now we’re seeing the technology is so strong, we’re actually seeing customers actually use 3D printed parts in the final application in production, which is fascinating. So it’s got a huge potential in my opinion.

Amanda Razani: And these technologies will definitely improve efficiency and quality. So the technology is there. But now how do they go about implementing this? Who are the key players to make this happen and make sure it happens in the right way so that it’s a positive outcome?

Jerry Foster: So there’s a couple things that we have seen that are crucial to having a successful implementation of anything. And this, in my opinion, this is across any technology, these sorts of things are really not technology specific for the most part. And there are a couple things; one is really making sure you have a consult. I’m gonna use the word consult – get some help from a partner, someone who has been there and done that, who can kind of hold your hand through this process, especially if you’re just getting started in your technology transformation journey. And you’re kind of uncertain on how to approach things. Getting someone that’s been through that can save you heartache and give you confidence. And taking that first step. I think that’s really important. The other thing is having a mindset inside of your company, that this is something that we need to get everyone on board with. I so often have seen companies that say you know you gotta know it – or a few people that are like the CEO. And they study about it and they read about it and they say okay, we’re gonna do this and they just shove it into the plant. And then they’re like, why isn’t this taking root? Why is everyone pushing back? It’s so obvious why this is a good technology? Well, it’s obvious to you, because you spent the last two months reading about it; you’ve got to give your employees the same benefit of the doubt – you have to walk them through it, you have to do proof of concepts with them, you have to answer their questions, you have to let them try it out. And actually give them the same, you know, the same space that you gave yourself to to become comfortable with that technology. Basically, it comes down to change management; really good change management, making sure everyone is on board giving them the tools to do that. We had one customer, just real brief, that was putting in some new lean manufacturing processes in their systems – and their customers, their employees, were like, this is kind of scary. How many more people are we going to need to actually implement this? And the management said, we’re not going to have any extra people; you’re going to do more with the people you have now. And they were like, no way. And so management actually built a pretend part out of Legos, like blocks with a bill of material. And they went into a training room. And they brought all their employees in and they built this part, both the old way and the new way. And they came out  like, oh my gosh, this really works, we can do this much more efficiently than we were doing it before the employees came out. They’re going, let’s go change – which was amazing. So it’s all about leadership that says how can I? How can I partner with the employees to bring them along the ride, on the ride?

Amanda Razani: That’s incredible. So I know, one topic of discussion around the use of AI and automation and 3D printing, in fact, is the concern that jobs will be going away. What do you feel about this; our jobs going away? Or is it just introducing new jobs?

Jerry Foster: So you know, if you asked me this five years ago, even three years ago, I would have said, well, that’s a real danger. In fact, I’ve got articles saved about you know, the sky is falling kind of a fear of automation. And AI is going to take all of our jobs, and you know, memes and pictures that have robots taking over, and it just hasn’t happened. And I think the reason is because we are struggling to fill jobs, especially manufacturing – we currently have 800,000 open open jobs in manufacturing in this country. And it’s supposed to be 2.1 million by 2030 open jobs. And so what automation and AI is doing right now, is just filling the spaces that we need. So I’m not seeing a whole lot of jobs being displaced yet by automation, I don’t see it in the near future; there’s probably some, but for the most part, the jobs that people no longer want to do – those monotonous, tedious, repetitive jobs, those are the two jobs that are perfect for automation. And if we hadn’t invested in automation, we’d be in even more of a world of hurt than we are now. So it was kind of fortunate that those technologies kept moving forward to kind of help, you know, fill the gap that we’re in right now. But it does mean, I think down the road, and we’re already seeing this, we’re really gonna have to start looking at how do we upskill and train and help our employees become more comfortable with the technology that they’re going to have to be working with day to day? That’s something that the report brought out, as well as our customers are struggling with training and upskilling their current workforce to be comfortable with all of this new technology.

Amanda Razani: That was gonna be my next question. You mentioned there’s all these jobs out there, and they’re not being filled. So there’s a big gap. And so is it a skills gap? Why is it that these jobs aren’t being filled? Thank goodness, we do have technology that covers a lot of them. But what do companies need to do to fill these jobs?

Jerry Foster: So I think, first of all, they need to continue to invest in automation. And that there’s not only things like robotics, but there’s things like software, which can automate processes. It’s any sort of automation that can assist your facility, so they need to continue to invest in that. And then I think we need to be creative. I think one of the reasons that we’re really struggling is that there’s a perception problem on manufacturing. You know, I told you about when I first started off 30 years ago in a forging facility, how dirty it was. I would come home with my nice clothes and full of grease on my hair, which I had at the time and oil on my shoes. And my wife was like I thought you were a programmer, because it was so dirty in the facility. And it’s just not that way anymore. It’s not your grandfather’s manufacturing. It’s full of technology. It’s clean. There’s so much fascinating stuff going on and you can make a good living in manufacturing. And so we have a responsibility to tell this upcoming generation and the current younger workforce. This is a great place to apply your technology and walk out on the floor and see what you’re doing and see the parts that are being made right there in front of you and see the real application of what you’re doing. It’s pretty amazing. So I think our customers and manufacturing need to be more – what’s the word I’m looking for – they need to be a little more original on how they’re approaching that, and creative. That’s the word I’m looking for – they need to be creative. Just one example I saw recently – I attend a lot of manufacturing expos. And a lot of manufacturing shows. And what I attended last year was IMTS, the International Manufacturing Technology show in Chicago, and I’ve been going to these things forever. There’s usually 15 – 20,000 manufacturers, hardcore manufacturers there. And last year was the first time I’ve ever seen this; I saw a whole troop of teachers in their classrooms coming through there on guided tours with people who were running IMTS, bringing them through this massive expo floor. We saw these cool machines, the robots doing incredible stuff. And I thought that is some genius, that’s the kind of thing we need to do is take these kids and put them into a spot where they can go, Holy cow, this is really cool. It’s kind of changed our perception of manufacturing, and get kids thinking, “Hey, this is a viable career choice for me.”

Amanda Razani: Absolutely. So thinking about the past year or two, we saw some serious supply chain hiccups, and everything was delayed. And we’re still seeing that. How long do you think it will be before companies catch up and are back on track from the supply chain?

Jerry Foster: Oh, is this on the record? Or off the record? Oh, my goodness, it’s such a tough question. Because to be honest with you, you know, coming out of COVID in 2021, we started to see production increasing, I think everyone thought we were kind of out of the woods, right? And then there’s the 2022 – we look at the aggregate production for all of our customers. Seeing all of those declines, you’re like – oh, my goodness – we’re not out of the woods yet. And I, boy, my gut is it’s a couple more years yet, I think, before we are completely over the hump here and the disruption of technology industry 4.0 and people not wanting to work in the places they’ve worked in the past; and all that is going to balance out. I believe that actually. I think it has to, and I believe it will, but it’s going to take longer than we thought. I would suspect a couple more years.

Amanda Razani: And so the last question I have, going back to the survey, you said a lot of companies, they’re not comfortable with making data driven decisions. And harnessing this data, of course, is very critical for most businesses. So what is the solution there? How can they best harness all the data? And what happens if they don’t?

Jerry Foster: So I like the second part first, because it’s easiest, when they don’t figure out how to do this, I think they’re gonna find themselves behind – way behind. And I think it’s one of those things where you’re, you think, you know, you’re going to end up just realizing, “Oh, my goodness, I am, I’m not competitive anymore.” And it’s going to come as a kind of a shock. And so we were just, we were just a while ago, we were at a place in Wisconsin, and they were having this problem with their machines being down. And 40 days of the month aggregate over across all their machines, 40 days a month, they’re averaging downtime, and their machines were throwing error codes that were caused. And we were like, do you record all those errors? And they said, “Oh, yeah, we do.” We said, do you ever look at them? And they said, no. I was like, “Well, you know, you’ve got this data that’s telling you why our machines are going down.” And they just they don’t put the two together. So if you don’t do that, you’re efficiency is going to be low, your quality is gonna be bad, you’re gonna have downtime. And so that’s the answer – the second part. And what was the first part again?

Amanda Razani: So how do they manage to harness this data properly? What are the solutions?

Jerry Foster: Yeah, so I think you know, it one thing that’s important to remember because we talk about smart manufacturing all the time, and smart devices, don’t make manufacturing smart. It’s when you put the data together, you connect those pieces to get the data together, and you read them. And what I’ve seen, it just takes someone inside of the company, some champion, IT person, a leader, a manager, a CEO, a CTO to kind of put together the results from some of the technology that you’ve invested in and actually showing what the ROI is on that and actually showing the advantage of actually doing that. And once that bug starts to catch, once you start to realize we can do this, you have a small victory. And that’s one thing I tell my customers – start someplace, find someplace that you have a problem. And then figure out which technology can help me solve that problem even it’s just small, right? And put that in place. And then when you see the ROI on that and you convince management or the employees or whoever you need to convince, look what we did. It can kind of be an exciting kind of visionary thing that starts to excite people, but it’s really about taking that first step. And it’s really about figuring out what are my pain points and addressing that – people want to look at technology first. Figure out what your pain points are first and get them on a board, figure out what they are. Ask your employees if you don’t know your employees well and get those on a board and say where do we want to start? What’s one thing we can do? And figure that out and solve that problem. And then we have the tools and the process and the experience. Oh, we can do this. Let’s tackle the next thing.

Amanda Razani: That sounds like a good plan. I want to thank you, Jerry, for coming on today and sharing your insights about this topic, and I look forward to speaking again in the future.

Jerry Foster: Thank you so much. It’s been a pleasure. Thank you.