Building A Supply Chain Strategy For Industry 4.0

Tamara McCleary

Tech Unknown | Episode 5

Featuring guest Gary Mintchell and host Tamara McCleary

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“I look at the Industrial Internet of Things as this whole system that’s geared toward improving profitability, productivity, and the efficiency of manufacturing.”
– Gary Mintchell, Founder of The Manufacturing Connection

Visibility into the supply chain is crucial for businesses to improve efficiency, use data more effectively, and even identify new potential revenue streams. What technologies do businesses need to adopt to build an Industry 4.0 supply chain? What do we stand to gain if we get it right? Expert Gary Mintchell shares his thoughts.

The Industrial Internet of Things (IIoT) brings the promise of complete visibility into – and management of – the supply chain. Internet-enabled sensors can keep track of inventory, shipping, processes, and more. The data these devices generate can make organizations more efficient and productive and even generate new business models and revenue streams.

The IIoT is one of the chief drivers for Industry 4.0, a “digital revolution” similar to the industrial revolution of the 19th century, but on an even bigger scale. The organizations that can make a transformation to compete in an information economy – that can make the leap to Industry 4.0 – are the ones that will thrive in the next decade and beyond.

Our guest this episode, Gary Mintchell, is an expert in making this transition. Here you’ll find his advice on getting started, real-world success stories, and Gary’s predictions for what comes next.

Listen to learn

  • Real-world applications for the Industrial Internet of Things
  • What Industry 4.0 means and why it matters
  • How to get started and scale up a digital transformation
  • How to manage the human element of automation & AI adoption

About our guest

Gary Mintchell is the Founder of The Manufacturing Connection.

Gary Mintchell is the founder of The Manufacturing Connection. He’s an industry-leading analyst and writer on the Industrial Internet of Things, manufacturing, marketing, and leadership.

“Pick a problem spot and tackle one thing at a time. Prove it out and grow it and scale it up. The interesting thing about digital technology is it scales much better than some of our old technology.”
– Gary Mintchell, Founder of The Manufacturing Connection

Did you miss our last episode?

Check out our previous episode with Tammy Powlas: Boosting Business Intelligence with Customized Analytics. Click here to listen.

Episode 5 Transcript

Tamara: Welcome to the Tech Unknown podcast. I’m Tamara McCleary, CEO of Thulium. Today’s episode is so exciting. We’re going to talk about building a supply chain strategy. Visibility into the supply chain is crucial for business to improve efficiency, use data more effectively, and even identify new potential revenue streams. What technologies do businesses need to adopt to build an Industry 4.0 supply chain? What do we stand to gain if we get it right or what do we stand to lose if we get it wrong? Well, this is exactly why I have brought on expert Gary Mitchell to share his thoughts. Gary is an avid podcaster, blogger, and analyst with a heavy background in manufacturing, consulting, technology, leadership, marketing, and personal development. Gary, thank you so much for joining the show.

Gary: I’m glad to be here. It’s an interesting topic for sure.

Tamara: Well, it’s really right up your alley. You and I were talking before the show started that your very first digital project was back in the 1970s. And I thought that was interesting because we had a little bit of a shared giggle together since neither of us are millennials, and being steeped in this industry a while. What was state of the art back when you were starting your digital projects?

Gary: My first digital project actually dates back to somewhere around 1978 when I was working in product development and my boss had a bright idea, and he thought that he could take over the IT department (back then it was called MIS by the way) when you’re older. He thought I was the perfect guy for it. So he sent me off to IBM training because we had an IBM minicomputer, remember those? So I went off and learned a bunch of stuff about digitalization and digitizing. By the way, when I interview people today, it’s still the same stuff it’s, like, do your process first and then do your digitalization, and so on. But our state of the art back then was every piece of data we put in was painfully keyed in, spit it out on a punch card, put the punch card in a reader, and the computer eventually figures all that out. And it was painful, and you didn’t have a CRT to look at any thing. You’ve got a written report and, looking back on it, that’s all crazy. But back then, we were able to do routings, and bill of material processing, and costing and all kinds of weird stuff. Even back then, we thought that was just fantastic use of digital technology.

Tamara: Now look where we are. Almost every day we hear of innovative ways that artificial intelligence, machine learning, technology is transforming business practices. But where does this leave supply chain? Innovation is no small feat when we talk about IoT asset tracking, Big Data benchmarking, supplier risk identification, AI chatbots, supporting sourcing, spend classification with machine learning. Gary, you talk a lot about the Industrial Internet of Things. I’m wondering if you could share with us a little bit about what the industrial internet, the IIoT means to you.

Gary: Well, I build that term up, and the term is derived from different sources. We had the Internet of Things that people talked about for a while. A lot of it had to do with consumer type of things. And then we had GE talking about Industrial Internet, and people worried about if they could use that term. And then we had Industrial Internet of Things. And so I look at it as building it up into a system. It starts with all these smart devices that we have, and the sensors got very smart and could capture data, and we could network them together. Other things like motor control, we call it variable frequency drives, contain a ton of sensors in them, and you could do all kinds of math and get all kinds of information that you couldn’t use because you couldn’t connect them.

What we’ve done is we connected all those things that we developed – networks, basically Ethernet – and then we needed something else to, you know, someplace to put it. So we’ve got edge devices in powerful computing devices and databases that are really good these days. And that’s still not good enough unless you can do analysis on all that data, and that’s still not good enough unless you can have some sort of visualization tools. So we have smartphones, tablets, all kinds of mobile devices, and other computing devices.

And so I look at Industrial Internet of Things as this whole system that’s geared toward one thing, and that’s improving, profitability, productivity, efficiency of manufacturing.

Tamara: You’re right. Technology is augmenting our business processes and has allowed us to become much smarter. The intelligent enterprise, the intelligent business is all run on augmenting our intelligence as human beings. What’s the potential for harnessing the power of the Industrial Internet of Things to enhance visibility, especially for supply chain?

Gary: So, what gets interesting about all that? Well, all of my early experience, and most of my experiences, is the middle of the supply chain, if you will, the part where we convert all the raw materials and components into some kind of usable product, which therefore then gets shipped off to some customer or user. So I started out in the middle and then needed to branch out on each edge.

Part of the problem in doing anything with all that is the data. So if we take the technology that I just described in an Industrial Internet of Things, which is within a factory or a plant, and then extended out to the supplier channel in the raw material channel, and then extended out to as far as the product goes, using technologies like bar codes for example, or even radio frequency ID (RFID), various technologies like that, can help us track things all the way through.

So, 15 years ago, we talked in our industry about track and trace and it all started with food and beverage, where we needed to track from the cow to the butcher shop or to the package, and was kind of the idea of that whole thing. And people saw a way to one, smooth out that whole supply chain so we didn’t have big bulges of product waiting to come into the manufacturing plant or product waiting at the grocers to be sold. And we needed to smooth all that out. How do we do that? We do that with data, and we just take the same technologies that we had. Many of the same companies that were systems integrators and suppliers started going out to the local fast food hamburger place saying, “hey, put a sensor on your refrigerator and tell you when the refrigerator temperature goes down,” just for example.

And it saves you a health recall or something. So that’s kind of where we’ve gone in the supply chain, at least the part that I deal with, and it’s a tremendous usage in things like, if you need to have a recall for some health or safety reason, you can limit it to just the things that are affected instead of having to take everything off the shelf all around the world because you don’t know. When you know, you can actually be safer. And that’s just one. I started out on all this. It was food and beverage, but now everybody’s tracing stuff and keeping track of it. And so if you’re looking at it from a management point of view, what’s really going on now is I can now manage, you know, I used to be, I tried to manage a machine and then a plant and now I can manage my whole ecosystem and keep track of things, be more profitable, more efficient, and so on.

Tamara: Managing an ecosystem, so true. Success in supply chain relies on our ability to build successful internal and external partnerships. How would you define this next evolution of business?

Gary: So, Industry 4.0 data is an interesting term and it really implies the fourth industrial revolution, and the fourth industrial revolution being digitalization.

So there’s a thing called the digital twin. And all that means is I can have a product, a machine, a process, a truck on its way somewhere or shipping container or whatever. I have a digital representation of that physical thing and it’s all connected together. And I can play with the digital part of it without affecting anything in the supply chain coming along in physical reality until I want to make that change, which I have proved out digitally. And that’s kind of the idea behind this Industry 4.0 idea that I can do so many more things, so much better, more efficiently. I can make changes without destroying the whole supply chain, which people have done in the past. So yeah, all this ties together and it’s amazing. It’s great to see it come together, especially going back 40 years, to 1978, is what we were trying to struggle to do then.

Tamara: My son actually works for a large grocery store chain, and they had a power outage recently, and it wasn’t very long. It was a really short outage. But because they don’t have the technology to define, they don’t have sensors on things to define which products should be tossed and which can be saved, they literally had to toss everything in the dumpster, I mean, hundreds of thousands of dollars of lost food. And most of that food is probably perfectly fine, but because they are without the technology to know what’s safe and not safe, it’s all lost. And I think this is a salient, practical use case of how technology, such as these sensors, could save billions of dollars for an organization. I mean, what are some of the advantages that we haven’t talked about yet that can really apply if business upgrades their processes, including supply chain for Industry 4.0?

Gary: I used to have really good conversations with an industry vice president and he would always say, “Gary what if,” because we should always think about, especially as engineers, you know, ask the big questions. He said, “what if we knew more about the process? What if we could find out more by adding a sensor or by doing something.” And you could do that anywhere, not even just in the physical system but in the human processes. And it should all apply to management if we’re applying principles like lien, which needs data to figure out which project to improve in your one-piece flow, and all the things you do in lien, and this additional information as we learn to use it, and then executives can take a broader view of their entire enterprise down to the plant manager who’s just trying to make that plant more profitable and effective – and I should add safer, by the way. That’s a key component of this whole thing.

But so ask the “what if” question and what can we do next? Just tackle the next problem. That refrigeration problem is a problem. And if we had, maybe what if we had sensors on every product and not just the compressor? Maybe we could sort out the products by good and bad based on some cheap sensor. We could stick on each card. I don’t know, I’m just speculating, but that would be cool. Yeah.

Tamara: You’ve also mentioned management. How do you think executives should be thinking about moving through this process? What are the first steps? I think it can be really overwhelming.

Gary: It can be overwhelming, and I get feedback occasionally that, “oh, putting in an Internet of Things project could cost millions and millions and millions of dollars.” Yeah. It could, but that would be the wrong way to go about it. We know just simple project management stuff that we’ve done forever. Pick a spot, pick a problem spot, and tackle one thing at a time and prove it out and grow it and scale it up.

Interesting thing about all this digital technology is it scales much better than some of our old technology. The basic components you need. So you start with the executives, like you said, an executive who’s got buy-in and it has to be more than the CEO of a company, listens to this podcast, or reads a trade journal and says, “oh, that’s a good idea.” And he flips it over to the senior vice president of operations and says, you know, go apply this somewhere. And then he told us that down the line doesn’t work. There’s got to be senior management, senior executive buy-in. They don’t have to do the work, but they really have to be committed to seeing it through and funding it and giving somebody the power. And so that’s a first step.

And the second thing is, and I’ve met some of these people at this level that got that where the CEO said, “I need a project, form a team, you.” You get to go pick the team member. But they give them the support and funding and the power actually to actually do something. But you tackle a project, you go out talk to the factory or the supply chain managers, “where’s your problem point.” Okay, let’s see what we can do to solve this problem point. Scale it up from there.

Technology exists, so part of your whole project plan is bringing in partners to be part of your team that have the right technologies. So, that might be the right software, it could be the right software along with the right computing devices or, well, device is a good term, although that could be a supercomputer, depending on what you’re doing. So that’s kind of what you really need to do. And the people, I’ve seen it, have done it that way and have to have done well. I haven’t seen anybody buy scale-out enterprise-wide personally yet, but I’ve seen it go step by step-by-step up the chain until they start showing real results throughout the corporation.

Some of this happens because of acquisitions, so and so buys so, and so buys so and so, and the next thing they know they have acquired a dozen plants all with different IT infrastructures and different software and different processes, and then you try to rationalize all that, and it’s a huge headache. So at the same time, you need some corporate systems to go into place to back all this up so that we start using the same software or at least software that will talk to each other and start to rationalize all this. That’s it, I think, an unknown. I never read about that in the big press, but when somebody acquires something, it creates headaches for all the operations people down the line. So this all ties into the digital idea.

Tamara: With multiple acquisitions, you’re also acquiring a lot of different cultures. Digital transformation is really a people transformation because the first thing that’s going to hang up your transformation process is your people. I see this with the executive-level teams directing what they’re going to do next. And where’s the stall out with executing this across the entire organization? The stall out is usually middle management because it’s a people and a culture issue. You have to get the people on board to make transformation happen. And when you have enterprises acquiring a lot of other companies, you’re often bringing in disparate cultures. This is the biggest barrier to making a successful digital transformation.

Gary: For sure. One of the things you have to go out and talk to all the people is being frank and transparent about who’s going to lose their job. That’s the first thing everybody’s going to ask. I used to install automation, and the people on the line will wonder, is that piece of automation going to replace my job? And I actually had a vision system I put in essentially sabotage because it was a quality-assurance vision system to make sure that the final product would perform according to the customer’s desires. But the person on the line didn’t see that end result, had never been brought in by the engineering and management to say, “here’s what we’re trying to do. We’re trying to help you do your job better. We’re not trying to replace you.” And a lot of times nobody talks. People don’t understand.

And I just visited a Ford transmission plant in Livonia, Michigan, and they did a superb job of redesigning and retooling that entire plant and bringing the people in. And even with all the automation and digitalization and everything, employment is actually up. So it can be a win-win. But management just has to learn to talk and bring the people along and not scare them to death that… The project will be sabotaged one way or the other. Trust me, I’ve seen it.

Tamara: Absolutely. When senior management doesn’t address the elephant in the room, which really is the fear of losing our jobs to machines and automation, and is this going to happen to me? Will I be… Will I have a job in the future? These issues escalate because there’s a lack of communication from the executive leadership on down throughout the ranks in the organization. I mean, what’s your view with respect to increases in automation, harnessing the power of artificial intelligence, digitized everything? I mean, there will be job loss. I don’t think that we can sugarcoat this. But what’s your perspective on the future of work?

Gary: Number of issues addressed there. Yes, some jobs have been lost, and the big thing now is robots have replaced jobs and robots are going to replace your job. But, nobody… In fact, I just read a really deep, in over my head in math, economics, a couple of economists wrote, and they did a correlation of automation and employment. I read through it, and I went, but that’s only a correlation. They never asked why. And the why is [that] we remove people from dangerous, dirty, and dull jobs. That’s to me a good thing if I make people more safe and don’t break their backs lifting things and all that sort of thing I’ve seen in my life. So it can be a good thing, but it did replace those particular jobs. And so there’s no getting around all of that.

My blog post today partly was a riff on a guy by the name of Seth Godin, whom I really like. He was talking about, don’t let AI replace you because humans have a brain, and if you make yourself more valuable in your company, in your team, or in your organization, you, by using your brain, by having input, being part of the team, coming up with things that make you more valuable, you won’t be replaced by AI. But if you’re just doing a rote, unthinking, dull thing, whether you’re on the production line or in the office, it can be automated. So the challenge was: make yourself more valuable.

I talked to people at all levels from the basic plant floor to management, and it’s the same thing for all of them. There are creative people at every level that, if we can just tap into all their brain power, we’d all be much better off. All aside from all the technology, which I love.

Tamara: I love the dangerous, dirty, and dull jobs. That’s excellent. It’s like the three Ds of the future, right? No dangerous, dirty, and dull jobs. That’s fantastic. Have you seen good working models of a 4.0 style supply chain? I mean, can you share a success story or two with us?

Gary: I would go back to all the work that’s been done in food and beverage that we talked about earlier, which is probably the best result because of perishable goods and immediate harm to the customer. That seems to have worked well, and they’ve been working on developing things. I just got a press release today about a new product that will help track transportation. I’m hoping not just to, like, fire truck drivers, but you sort of need to know when the truck is going to get there and get it unloaded so it doesn’t sit around and things perish on the truck and all that sort of thing. Using GPS-type technology, people are using a Bluetooth-type technology for locations within a plant and, then when the truck goes somewhere and checks in, we are getting a lot of things started, and I think it’s not going to be too long before they actually solve that refrigeration in the grocery store problem.

Tamara: When I think of reliability, efficiency, and those pieces. I mean there are things in my own life that I sometimes feel like tearing my eyes out that I wish I could have that level of reliability such as, for example, landscapers who don’t show up, contractors.

Gary: This is the technology that Lyft and Uber have been using too. You could see your car coming, you could see where you’re going, you can see that… that’s a really cool technology application that I never thought about it, but play it to the… What if the landscape guy had all that and you could see the truck coming and…That’s another interesting idea.

Tamara: Yes. It brings it to life when you’re in the midst of a project. I mean, you talked about Seth Godin earlier saying that, “Use your brain.” It’s also really about being dependable and reliable, as well, within your job because this is what machines seem to be offering us: reliability, efficiency, accuracy, and cost savings. Who doesn’t want this?

Gary: Yeah, a lot of early technology went toward reliability even within a plant measuring vibration and motors and knowing when a motor is going bad and things like that. And you could just extend that out to reliability of deliveries and transportation and well, heck, you know, like the refrigeration. If you’re in that business or whatever, it might be actually even reliability. Some of the really interesting stuff that you’d never think of are corn planters, I’m from the country. So if you’re planting corn, if you’re harvesting, you would like all the stalks of corn to be the same level so that when the picker comes through in the fall that it’s easy to get to each of the ears. But how do you make all the stalks grow the same height? Well, they actually put Internet of Things on the fly in the corn planter. The little drill that puts a seed in, and every seed they can measure the soil quality and various other attributes, and know how deep to put that kernel of corn, the seed, so that the all the stalks will grow to the same height.

Tamara: I’d be so curious to know if you could just project a bit into the future, Gary, what do you think? What do you think we’re gonna be talking about a year from now?

Gary: We’re going to be building on all these technologies we have and it will be the technology, you’ll still be way cool and it’ll be cheaper and it will be better. We’re going to talk about the better use of people and help people learn to utilize all of this technology and all these things we’re talking about and make more intelligent decisions, run better, more efficient, more profitable enterprises, and a benefit to society. I always look at it that way, that in the end result, what we want is a benefit to society because we do all this stuff better. And I think we’ll be looking at that, that people are really coming along very well that way.

Tamara: I love the technology in service to humanity. That’s really where it’s at. My last question to you is what really fires you up? What gets you up in the morning?

Gary: I need to learn constantly. I’m a five on the Enneagram. I need to know everything about everything. So I get up ready to learn every morning.

Tamara: I really appreciate everything that you’ve shared with us. If you had one last thing you’d like to say to everyone, what’s your big leave-behind from this podcast episode? What’s your big idea?

Gary: Oh, my big idea. It has to do with, let’s challenge people to go out there and solve a problem and use all this stuff and solve a problem that benefits you, your company, technology, and your society.

Tamara: I love it. Gary, where can we find your podcast and your blog?

Gary: My blog is themanufacturingconnection.com. I also have a podcast, and it can be found on iTunes. Just find Gary Mintchell, and you will get me.

Tamara: Well, I’m really, really delighted to have had you on the show. This has been a very enlightening episode for me as well.

Gary: Thanks a lot. I appreciated the chat.

Thanks for listening to the Tech Unknown podcast. Find us at Digitalistmag.com for a full transcript of this episode and more. And don’t forget to subscribe on iTunes, Google Play, Stitcher, or wherever you listen to podcasts.


Tamara McCleary

About Tamara McCleary

Tamara McCleary is CEO of Thulium, a social media analytics and consulting agency, driving Smart Social through proprietary data analytics and award-winning storytelling. Tamara ranks in the top 1% in influence globally. Named the #1 most influential woman in MarTech by B2B Marketing, recognized by Entrepreneur Magazine as one of 10 Online Marketers to watch, and named Top Digital Marketer by Brand 24 in 2019. Featured multiple times in Forbes for her pioneering influencer marketing strategies on social media for B2B and Enterprise, Tamara serves as a unique advisor to leading global technology companies such as Verizon, IBM, Mercer, MMC, SAP, Dell EMC, and AWS.