Why Smart Manufacturing is a Dumb Idea

Someone asked me recently for my thoughts on “Smart Manufacturing,” the so-called IT revolution in the factory. He found it incredible that I do not see Smart Manufacturing as the salvation of American manufacturing.

First, just to clarify terms, “Smart Manufacturing” is a technology-driven approach that applies and leverages Internet-connected machinery to monitor production processes. In general, the goal of Smart Manufacturing is to identify opportunities for automating operations and to access and apply data analytics to improve manufacturing performance.

Don’t misunderstand me: Smart Manufacturing has a role in reviving American manufacturing. I have a Smart factory, and we deploy the latest technologies in pick-to-light systems and automated CNC machinery, and we have achieved seamless integration from order inquiry to accounts receivable. But, that isn’t where I started my revolution — and you should not start that way either.

The problem with many CEOs today is they have turned away from the astonishing potential of the workforce and turned toward automation instead. It’s a big mistake, but I hear about it frequently from consultants and technology developers, and of course from Smart Manufacturers preaching to the unconverted.

What is the sense in spending millions of dollars to automate your factory if the workforce could not care less about the new capabilities? What is the sense in buying expensive new production machinery if the workers are just dragging themselves into place at the start of the shift, and cannot wait to cannot wait to get out of there?

I’ll tell you the sense of it: It is based in a conclusion reached by too many CEOs who have come to view their employees as expandable assets. They should view them as renewable resources — and they should renew them.

Don’t even bother with Smart Manufacturing if you have a dumb workforce. But, note: if your workforce is dumb it’s your fault, not theirs.

Don’t bother with an IT revolution. Your revolution has to start with a “Smart Workforce.” You must make a new compact with your employees. You need to ignite the human spirit in your workforce. Imagine what would happen if every day your employees came to work excited to do their jobs better than they did yesterday? Imagine how your company would grow if your employees were absolutely dedicated to supporting the mission, and each other in attaining it? Imagine what it would be like if your employees were like Cirque de Soleil performers?

This is the place where I get blank stares from many CEOs. They don’t like the “soft stuff.” “Give me the hard stuff,” they say. “Tell me how to build a Smart factory, not a Smart workforce,” is what I often hear.

Four steps, to start

The approach has to start the other way around. Start by building a Smart workforce, a workforce that is engaged, enlightened, and empowered; a workforce that trusts its leaders; a workforce that believes in the message communicated and example set by its leadership. This is a tall order to be sure — especially if the leaders are a group of short-term planners and profit seekers that care more about depreciation than employee engagement.

Here are four critical steps for starting the process:

1. At the top, build leadership credibility. The only way to have leadership credibility is to have organizational leaders demonstrating the core values of individual integrity and respect for others.

2. Leaders must treat employees with respect. It’s remarkable how many leaders do not show such respect. In a recent Harvard Business School study of 20,000 employees, half of all respondents indicated they did not feel respected by their leaders. And, respect was rated by the participants as more important than any other workplace incentive, including compensation. Imagine how company performance would improve if you solved just this one problem.

3. Leaders have to demonstrate personal integrity. In study after study, integrity is an essential attribute of leaders that people admire, and want to follow. So, integrity is the foundation for building credibility.

Leaders also need to demonstrate integrity in what they say. You cannot be like so many leaders who “tell half the truth, hoping the other half doesn’t show up.” You must be completely honest all the time. You have to tell workers what they need to know. If your company is headed for trouble, tell them. If the company needs to pivot into new markets or products, tell them. And tell them why. Tell them everything.

You would be amazed at how smart your workforce can be if you give them the chance to show it. My constant advice to myself and others: “Trust in truth.”

4. Integrity is not only for leaders. The entire workforce must embrace the values of respect and integrity, but you cannot expect people below to do what those at the top will not do. You may have leaders that lost their credibility long ago. They cannot recover it. You must replace them.

Smart manufacturing starts at the top, not the bottom. Smart manufacturing starts with establishing a new compact with the workforce. Smart manufacturing starts with people, not machines.