The New Era of Industrial Performance Management

CONFIDENTIAL AND PROPRIETARYThis presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other intended recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Simon Jacobson

@simonfkj

The New Era of Industrial

Performance Management

1 CONFIDENTIAL AND PROPRIETARY I © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Factories Are Goldmines

1% Improvement = $500M


Does Your Company Mine Its

Gold?

1% Improvement = $500M

1% Improvement

= $500M


1. How The Art of Possible Is Fueling A New Generation of Industrial Performance

2. Tactics To Mine The Gold

3. Leveraging Performance Improvements Into Other Areas Of Your Business

In this session


Cost

Quality

Capability

Time

Transparency

Reliability

Customer Experience

How We Look At Manufacturing Is Changing


Innovate

Differentiate

Run

Bimodal Is Opportunity to Nurture The Art of Possible

• Changes the way you work

• Experiment and learn

• Domain of "fast" innovation and partnering

• Driven by demand and process improvements

• Medium-term change management

• Ongoing optimization, incremental value

• Analog and mechanical

• Standardization and cost reduction

• Proven and reliable

+

-

Ris

k &

C

ha

ng

e

-

+

Govern

ance

11

22

Mode 1

Mode 2


“We were using Chinese recipes to make Western food”

Zhang Ruimin, CEO Haier

© 2013 Gartner, Inc. and/or its affiliates. All rights reserved.

Innovation

Trigger

Peak of Inflated Expectations

Trough of Disillusionment

Slope of Enlightenment

Plateau of Productivity

Expecta

tions

Time

Positive Hype

Negative Hype

Balancing Innovation vs. Capability

Innovation

Trigger

Peak of Inflated Expectations

Expecta

tions

Positive Hype

What future trends should my

company be preparing for?

Trough of Disillusionment

Slope of Enlightenment

Negative Hype

Where should my company be

focused today?

Plateau of Productivity

What my company

should have completed?

Time


Balancing Innovation vs. Capability

Source: Hype Cycle for Leaders of Manufacturing Strategies, 2015





In this session


The Great “Digitalization vs Storm Windows” Debate

Why should my P&L

shoulder the burden?

We still need basic data

collection and reporting

Excel came free with the

desktop

Business

Strategy

Factory

Operating

Strategy

Wants:

• Digitalization

• Automation

• Visibility

• Quality

• Capability

Visibility

New Markets &

Segments

Agility

Lean Supply Chain

Improve Supply-

Demand Matching

Network Design &

Optimization

Manage Complexity

Sustainability

Traceability &

Compliance

Business and Supply Chain-driven

Outcomes

Technology and Systems

Enablement/Investments

Performance Teams and Level within

Manufacturing for Capability

Development

Line/Work

Cell/Production

Unit

Site-level

End to End

Supply

Network

Region/

Market

Manufacturing Strategy

and Systems Focus

Improve?

Automate?

Digitalize?

Skill?

Analyze?

More Than Technology Drives The Factory of the Future

Source: More Than Technology is Driving the Factory of the Future, Gartner 2015




In this session


Through 2018 three out of five Internet of Things projects in manufacturing operations will only deliver benefits to local plant operations

There’s Gold In The Factory—but look beyond the four walls!


There’s Gold In The Factory—but look beyond the four walls!

Difficulty

(to scale)

Timescale

Low

High

QuickSlow

Factory

Supply Chain

Reliability

VisibilityQuality

Traceability

Energy Management

Asset Performance

Decision Making Competency

Product-lifecycle Management

Asset Utilization

Improved Inventory and Cash Flow

Safety

IT TCO

Latency Reduction

Pull-based replenishment


Digital Ecosystems Are Needed

Process Granularity

Business Performance

Make

Plan Source Deliver Service

Source: Factory of the Future Strategies, 2015


Matu

rity

Level

Autonomous Manufacturing

Functional Excellence

Integrated Manufacturing

Demand-drivenManufacturing

Value Creation

Reacting

Anticipating

Integrating

Collaborating

Orchestrating

Inside-Out Outside-In

Connected Plants and Factories Connected Value Networks

Improvement projects to drive a group focus

Integrated “Excellence” within the manufacturing

function

Demand-driven with integrated end to end

processes

Value translated into multiple network

participants

Accidental Excellence

Operating Efficiencies

End to End Process Capabilities

Orchestrated Business View

Use the IoT to Unlock Gold

The Trap

The Opportunity


Balance Your Modes Of Operations

Mode 1 Mode 2

Reliability Goal Agility

Cost versus Quality Approach Cost versus Value

Capacity orientation Factory Model Capability orientation

Plan-driven, approval-based GovernanceEmpirical, continuous,

process-basedDrives future scale

Good at conventional process, projects

TalentGood at new and uncertain

projects

Individual processes and product

flow pathsAutomation Decisions and information flow

Long (Weeks & Months) ImplementationShort (Days &

Few Weeks)

Think Marathon Runner

Think Sprinter

Evolution Revolution

19 © 2016 Gartner, Inc. and/or its affiliates. All rights reserved.

Be a deconstructionist

Ask "What opportunity are we creating?" and not just "What problem

are we trying to solve?“

Explore, experiment, and innovate how manufacturing connects with

your customers.

Capitalize on the collateral benefits of real time data.

Recognize and embrace how cultural characteristics and mindsets of

each mode will vary.

Actions You Can Take


Simon Jacobson+1 617 851 9061

simon.jacobson @gartner.com


Recommended Gartner Research

Overcome Misalignment of Objectives Between Plant and Business to Execute the Factory

of the Future Strategy

Simon Jacobson (G00290949)

Bimodal Is Essential for Balancing Innovation and Capability in Manufacturing Operations

Simon Jacobson, Dana Stiffler (G0027795)

Predicts 2016: Opportunities Abound for the Factory of the Future to Reach Its Potential

Simon Jacobson, Rick Franzosa (G00292106)

Manufacturing Excellence Is a Sustainable Supply Chain Activity – Not a Site Project

Simon Jacobson, et al. (G00292413)

Four Best Practices to Manage the Strategic Vision for the Internet of Things in

Manufacturing

Simon Jacobson (G00263405)

CONFIDENTIAL AND PROPRIETARYThis presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other intended recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

Simon Jacobson

@simonfkj

The New Era of Industrial

Performance Management

The New Era of Industrial Performance Management

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