In the face of the raw materials and supply crisis, the eyes of the Lithuanian industry have once again turned to the topics of digitisation and automation. However, if we look at the real state of innovation in manufacturing, we often find paradoxes such as Excel still being secretly used alongside an expensive new system, sabotage of innovations, and employees' “little internal businesses”. While there is no universal recipe for innovation success, but starting small, human communication and active management involvement can help avoid many failures.
Paradoxically, there is probably just as much human element in manufacturing companies as in the humanities. Not sharing knowledge to protect one’s job, circles of “friendly” suppliers, deliberately switching off wi-fi or data on the phone to sabotage a new app that “doesn't work”, incredible creativity in the "why we don’t need it" argument, or the classic question "will it make me more money?" - all of this will be more or less heard by many in the industry, but it is not talked about in the trendy consultant presentations.
While I support in principle any investment in business progress, Lithuania's industrial productivity, according to Eurostat data, remains close to the bottom of the EU. This means that, despite the millions in measures and subsidies, we are definitely doing something wrong. Thanks to software, we seem to be more or less managing to optimise our apparently inefficient logistics and production processes, but human nature means that we are still struggling to bring computers into decision-making and knowledge-sharing within the organisation. And it is in these areas where the greatest potential may lie, but not always visible to the naked eye.
"Decision-making" and "knowledge" in practice are usually not strategic decisions by top management or internal training, but rather very everyday situations. Take a simple example: manufacturing companies have hundreds or thousands of pieces of equipment that sooner or later break down and cause downtime.
I have seen more than one case where manufacturers with a business management system costing millions of dollars keep information about maintenance, breakdowns and the state of the equipment... in Excel files, paper notebooks or, even worse, in the head of one supposedly indispensable person.
The reasons for this are manifold, but most often the expensive system does not have good functionality for one specific problem, top management sees such niche issue as irrelevant, and managers responsible for equipment maintenance sometimes feel more comfortable with a monopoly on information and procurement because of human factors. The result is avoidable failures and costly downtime in a formally digitised company with a modern business management system. Not to mention the fact that excel sheets and notebooks really do make some people indispensable, and when they leave one day the company is in information chaos.
Even if a company formally owns and uses modern digital tools, this does not automatically mean that they will catch on and deliver maximum value. Managers and specialists in various departments may simply sabotage it by worrying about their comfort zone. The very natural questions (or at least thoughts) of an employee who receives a new tool are "will I earn more" and "is this tool threatening my job". The correct answers are "you may not earn more immediately, but it will increase your qualification as a professional" and "you’re safe". However, it is rare to find a company with a management actively involved in innovation and communication, or with people fully responsible for innovation. All this often results in a situation where the innovation being introduced or tested “does not work" for employees and digitisation is slower or more formal.
Paradoxically, the people in charge of technology or equipment in companies tend to be curious. They receive many proposals and presentations from suppliers and are open to talk, inquire and dig deeper. The bottlenecks start when it comes to deciding on the actual deployment of the innovation of interest. The situation is gradually improving, but an innovation that is objectively valuable to the company is often still stuck in human factors at various levels.
Apart from the obvious cases, I believe that we will not achieve a real breakthrough in Industry 4.0 until we digitise things and processes, not people's thinking. And if the human factor is at fault, why not respond to it with human means? After all, you don't need introduce something new all at once - just start with a small group. A leader can introduce innovation not from the stage, but through quality involvement and delegation on a daily basis. Knowing any new tool automatically increases a person's skills, but does anyone tell them so? And not being afraid to talk and share experiences works wonders: companies are much more willing to adopt an innovation when they see how it works in practice with others.
Finally, our business still sometimes paradoxically thinks that the biggest and most expensive investment will have the biggest impact. This is not a wrong assumption in theory, but in practice, small steps and small volumes have a much better long term effect. Small investments are not only less risky, but also make it easier to tame the human factor, learn and be better prepared for bigger steps. And the vast majority of digital tools do make employees' lives easier sooner or later.
So while businesses today are eager to become more efficient and competitive, paradoxically, it is the relatively simple measures that can help them gain the most.
Head of Alldevice in Lithuania
The article was published in the Lithuanian business daily Verslo žinios on July 16, 2022.