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Cultural Shift in the Industrial Internet Age — Q&A with Edward Youdell

Ed Youdell Fabricators And Manufacturers Association
October 30, 2014
The rise of the Industrial Internet and Big Data has the power to transform industries, with data captured by connected machines enabling companies to capture efficiencies across operations and potentially achieve zero downtime.

To realize the benefits of these technologies, however, companies need to ensure that data analytics are being applied in the most effective way and communicated to the right people. That often requires a cultural shift throughout the operations — from the C-suite to the shop floor.

Many small and mid-size manufacturers have yet to capitalize on the Industrial Internet and Big Data, but this will likely change as early adopters such as GE help drive adoption, says Edward Youdell, president and CEO of the Fabricators & Manufacturers Association (FMA).

“As a critical part of the supply chain, these companies will have to adopt and implement Big Data and Industrial Internet practices on some scale or face losing OEM (original equipment manufacturer) customers,” he says.

Youdell, who led a panel discussion on the Industrial Internet and business culture at the recent GE Intelligent Platforms User Summit, discussed with Ideas Lab the importance of ensuring these new technologies support “the spirit of innovation and entrepreneurship” and how everyone from the CIO to the student must embrace a culture of innovation:


How do you see the competitive landscape evolving in emerging industries, such as advanced manufacturing?

Describing what advanced manufacturing is can be difficult because the term means many different things to many different people. I believe most people equate it to advanced technology. Something that I pay attention to that I think links directly to advanced manufacturing is R&D spending. Innovation in technology drives productivity and that in turn can improve an individual company’s as well as a country’s global competitiveness.

U.S. private sector R&D spending exceeds every country in the world, and recent gains in productivity growth by its workforce are paying huge dividends in improving the U.S.’s position as a global manufacturer. Coupled with lower energy consumption prices, the difference in manufacturing costs between the U.S. and China has shrunk to less than 5 percent, according to the Boston Consulting Group. By driving productivity gains through the deployment of advanced technology and manufacturing practices, the U.S. will continue to be an attractive place to manufacture.

Something else that I believe gets overlooked when thinking about advanced manufacturing is that innovative process improvements occur on shop floors all the time, and in many cases the improvements have no connection to advanced technology. These improvements are just the result of bright manufacturing professionals continuing to innovate in order to drive profitability. In my opinion, this a critical element of advanced manufacturing that deserves more appreciation.


How are the Industrial Internet and Big Data changing how companies operate?

The phrase, “What gets measured, gets done’’ comes to mind when thinking about Big Data. Being able to drive down to shop floor manufacturing professionals the ability to use data that improves both quality and processes has always been important, but advancements in the tools to do this are better than they’ve ever been. Large original equipment manufacturers (OEMs) such as GE, Caterpillar and Boeing have the resources and structures in place to adopt these practices faster than a small or medium-size manufacturer. But as a critical part of the supply chain, these companies will have to adopt and implement Big Data and Industrial Internet practices on some scale or face losing OEM customers. What I find most intriguing about the Industrial Internet is the flow of information between equipment at the OEM and supply chain partner. This has great potential to lift efficiencies and profitability for both sides of this partnership.


Are many manufacturers seizing the analytical opportunities offered by the Industrial Internet enables, or is there still a lot of learning to be done?

I think when it comes to understanding the industrial Internet we are just in the first inning of the game. I Googled the search term “industrial Internet” and it generated 814 million results. I interpret this to mean there is a lot of learning to be done about what the Industrial Internet is, especially by small and medium-size companies.

Anecdotally, I hear little in conversation from our members related to Big Data and the Industrial Internet. The metal fabricating job shop’s business is high variation, high precision, small lot manufacturing. A common set of technology is used by all metal fabricators to produce parts, but the variation comes in the setup, materials and part requirements. Since job shops are not looking at long production runs, the immediate value of Big Data to manage the process may have less emphasis today, but ultimately it will arrive because OEM customer demands will require it. The importance of machine-to-machine communication is exciting for sure. We’ve seen OEM sustainability expectations driven down into the supply chain, and this will be no different.


To take advantage of Big Data analytics, what types of cultural changes should companies implement? Is it enough to simply add sensors to machines and start crunching the data? 

I wouldn’t advise any manufacturer to add sensors and crunch data until they know what it is they want to measure. A conversation I recently had with a member squarely addressed this issue. His concern is that, in some cases, the rigidity of technology can get in the way of their company’s most important cultural asset — the spirit of innovation and entrepreneurship. His frustration is that technology suppliers don’t always respect and understand that there is no “one size fits all” solution, and that data and technology are there to support the manufacturer — not the other way around. The desire by the manufacturer to innovate and improve comes before the solution is created. Providing flexible technology and software solutions are required to support that type of culture.


What’s needed at the leadership level, should everyone in the C-suite become part-CIO?

I think strong leaders understand that the CIO’s responsibilities now cut across every aspect of the manufacturing operation, not just what’s going on in the cloud and server room. There needs to be a good appreciation of the importance of getting the CIO in on the front end of shop floor production and technology strategies, rather than after a solution has been implemented. A trend we do see with newer manufacturing professionals is that they are coming into organizations with a high level of comfort with technology and an expectation that they will use technology to get their work done. Going forward, I think this trend will have its greatest impact on technology and equipment suppliers. Those with the most intuitive shop floor user interfaces and controls will win more business.


The FMA has done a lot of research on the skills gap. What’s behind the problem?

This is a complex issue, and I don’t intend to sound old-fashioned or soap boxy, but I’ll boil it down to two main points. The first component to the problem is the aging manufacturing workforce. The average age is estimated to be in the mid-50s, and this group has accumulated a tremendous wealth of knowledge and skills about how to make stuff. As they retire — and research on the Baby Boomer generation tells us that their leaving the workforce at a rate of 10,000 a day — there is great concern among manufacturing employers about finding the next generation of skilled employees. As manufacturers invest in new technology, the demands on the workforce are changing in terms of the skills needed to program and run what is sophisticated and expensive equipment. I believe that technical and community colleges are among the best places to find the next generation workforce.

The second point I would like to address is that the lack of a skilled workforce can find its origins in the 1970s and 1980s, when the education philosophy shifted away from offering high school shop and vocational programs to a focus on preparing all students for college. As this occurred, the emphasis — and encouragement to students to value working with both their head and hands — was diminished. Not every kid wants to go to or should go to a four-year university, and fairer value needs to be placed on alternative education paths such as community and technical college programs. Preparing people to be ready for work is the most important outcome of any advanced education program, not the fact that somebody earned a degree in an ivy-covered building.

Society needs to reconsider the education system and the importance of encouraging students to become manufacturing professionals such as press brake operators and machinists. These folks do honorable and valuable work, while at the same time support their families. In today’s unsettled geopolitical climate, I believe it’s in our best national security interest to have a strong manufacturing capability. Attracting the best and the brightest into manufacturing has never been more important.


What are some innovative ways of ensuring today’s graduates are prepared for the manufacturing jobs of the future? 

FMA is stepping up to the plate with a planned donation of $500,000 to support an advanced manufacturing lab at a community college in Illinois. We want to be sure that students entering the metal fabricating program have access to the best and latest technology as well as good instruction, so they come into the workforce ready to produce at a high level. We’ve recently held a conference for education professional at a technical school, Ogden-Weber Tech College in Utah, to explore its innovative education model of “on demand” enrollment. Students can start their learning immediately instead of having to wait to enroll in a fall or spring semester. This is approach is good for both the student and employers because it means skilled manufacturing professionals reach the workforce more quickly.


What is your message to today’s students about the factory of the future? 

I often ask students two questions: Do you own a cellphone or tablet? If so, do you consider the company that makes it to be a high tech company? Almost all of them say “yes” to both.

Then I suggest to them that the real elegance of the device is not in its cool design, but that someone figured out how to manufacturer the product. This begins to open their minds to the possibilities that it would be cool to work in manufacturing. The future of manufacturing includes an environment that is technology driven, has a culture of innovation and ultimately a culture that financially rewards those that meet these challenges.

Top GIF: Video courtesy of Chris Talbot

Ed Youdell and Stacey Jarrett Wagner Talk: Big Data Vs Small Data — Which is What? 1

Edward Youdell is President and CEO of the Fabricators & Manufacturers Association (FMA).