What would Happen if IT Ran the Factories?

What would Happen if IT Ran the Factories?

By Bob Krestakos, VP, Global Operations, Steelcase

Bob Krestakos, VP, Global Operations, Steelcase

At Steelcase, we help customers think about space as a strategic asset to tackle organizational needs—including transforming culture, enhancing collaboration, and increasing employee engagement. It takes a different way of thinking to fully leverage space in this way, and former CEO of Steelcase, Jim Hackett embodied this mindset. This led him to ask me one of the most thought-provoking and trajectory-altering questions of my career:

"What would happen if IT ran the factories?"

When Hackett posed this question in 2012, I had been CIO at Steelcase for five years and was familiar with the IT systems we used in day-to-day operations of our manufacturing facilities. Hackett’s question revealed he was actively strategizing about the value of IT in our business and the changes it could propel across the organization and industry.

His inquiry also foreshadowed a later discussion where he asked me to consider the role of VP of Operations. This sparked an internal exploration of where I could have the greatest impact—as CIO, or a new role within Global Operations? Before I made my decision, I began to work more closely with the operations team exploring how IT could play a larger role.

"How we capture data, glean insights from the information and apply the learning to better optimize is the future of operations"

In the late 1990s, manufacturing at Steelcase had been deeply immersed in efforts to convert from batch and queue manufacturing to lean manufacturing. Taking a lean approach helped make gains in all aspects of our operational model, but Hackett was looking to what was next for Steelcase Global Operations. Hackett hypothesized that the highly effective use of technology and data in our manufacturing operations was the next frontier for Steelcase.

With modernization behind us, we’re now prepared for next-level optimization in our fitness journey. Our organization initially took small steps to get started. The IT team and I crafted a technology strategy to guide Steelcase through the transition. It was eye-opening to be so hands-on and close to the plant during this time, which led to a number of insights that other organizations can apply:

• Our computer-generated daily production schedules were highly accurate, but we discovered there was still room to optimize plant scheduling and took steps to improve efficiency.

• Manufacturing facilities and operations organizations in general are very fluent in metrics and trending, as was IT. But, we found the data we were gathering did not lend itself to multi-dimensional analytics. We realized our supply chain’s current structure didn’t enable an easy way to identify patterns in the data or an avenue to look at it from different perspectives. These insights motivated us to remedy the problem and pursue a more advanced modeling and pattern analysis platform. With advanced platforms, organizations are able to truly understand why events are happening in the daily cadence of order fulfillment.

• There is an evident need for simulation and predictive analytics. It is not enough for companies to understand what happened and why; organizations need the capability to predict what WILL happen.

• Plant floor activities in our build-to-order model were necessarily complex because of the configurability of the products we offer, but this model was quite manual and therefore prone to human error. Error-proofing in lean through poka-yoke methodologies was nothing new, but with advanced capability with the Industrial Internet of Things (IIoT) we could clearly take our work to another level. The same goes for other organizations. IIoT and emerging technologies provide a path for collecting and analyzing data from the plant floor that has never been done before.

Changing Course

To improve these areas and apply our insights, we began leveraging relatively new industry capabilities throughout Global Operations—including Advanced Analytics and the Innovation Management Office, which works on non-product innovation areas. Our decision-making now depends on tools we developed by prototyping innovative ideas and running math and discrete event simulation models. By working with partners conducting advanced research on the Industrial Internet of Things (IIoT) and collaborative robots, we are empowered to chart a course for continuous improvement.

Ultimately, in 2015 I transitioned into the VP of Operations role. Since then, we’ve made significant progress in our work. Using technology, data, and the relationship between IT and Global Operations is a key to our success.

Jim Keane, current Steelcase CEO and successor to Jim Hackett, has the same knack for asking proactive questions. He has also been instrumental in helping Steelcase turn our hypotheses into a rigorously analyzed business case for investment.

So, “What would happen if IT ran the factories?”

After my experience working with operations, I would react differently if asked that question today. Now, it’s not what would happen if IT ran the factories, instead, we need to ask and answer to “What would happen if data ran the factories?” How we capture data, glean insights from the information and apply the learning to better optimize is the future of operations.

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