Raven Podcast #2 - It is Obvious Industry 4.0 is Hurting Our Wallets

A while back, CEO of Raven AI, Martin Cloake, wrote an article for LinkedIn titled, ‘Lean vs digital: why Industry 4.0’s identity crisis is costing us so much’. We sat down with Martin on the Augmented Management Podcast and asked him to elaborate on his thesis statement: that a manic focus on Industry 4.0 isn’t getting us further ahead. Read the interview below, or head to the podcast for the full version.


Tell us about your history and how you came to formulate such a disruptive theory.

 Martin: My background is in engineering and high tech. I graduated just as the tech bubble had burst, and got recruited by a pretty cool blind manufacturer called Blinds To Go. With my background in high tech, at McGill my confidence level was very high that I’d be a big success at the shop floor. At some point, I had an Excel file that I’d built; it had all the graphs, the colors were good. I went to meet with my plant manager to show him what I had done.

I remember his response to me was pretty shocking. He said, “Martin, I want you to go, and learn the 200 names of the people in the plant. And when you’ve done that, then you can come back, and show me your graph.” I’m not a very patient guy, but I listened. I was early on in my career, and this guy had influence. So I listened, and pretty soon after, I started replacing my Excel time by walking the shop floor. I realized what he was trying to do. Because as I walked the shop floor, it was nice to meet my employees, but I’d see problems.

You recently wrote an article on LinkedIn called, ‘Lean vs. digital: why Industry 4.0's identity crisis is costing us so much’. What spurred you to write this right now?


Martin: There’s been a long history of manufacturing, and lean, how you need to go to the shop floor and work with people. As there’s been more and more chatter about technology, the pressure on engineers and leaders to go to the shop floor is less than ever before. There’s so much excitement over analysis, and the latest technology that we’ve almost forgotten where the value is. Effectively we’ve gotten distracted from the goal.

Leaders are most effective on a shop floor. There’s fundamentally no value in analysis. Value happens when people take action to improve. I think we’ve lost sight of that. That’s not to say that technology that’s been developed as part of Industry 4.0 movement isn’t valuable. It’s absolutely valuable. It can be an amazing tool that can do things that we could’ve never done–but we can’t lose sight of the fact that our goal is, and has always been, to improve; not simply to digitize. I think there’s a big difference there.

How does lean manufacturing help us identify value?

Martin: The fundamental principles of lean start with what the customer is willing to pay you for. So if you’re in the business of making sandwiches, they’re paying for the sandwich. You think about what actually gets them the sandwich. Whether that’s a person standing at the front counter handing it to them, the person who’s baking the bread, slicing the bread, putting on the mustard, putting in the hand. That is a value. As a manager, you’re watching the process to make that sandwich for that customer, and you see stuff: they walk across the room to pick up, or the mustard is all the way across the room. If they walk all the way across to pick up that mustard, well, that’s a waste of time.

So the value stream is all the activities that build up to the point where the customer gets that thing of value, and they give you money. Often when you work through that exercise of identifying what parts of the process deliver value, and which ones don’t, you see a whole bunch of waste. This is something that manufacturers are very good at, and are used to. Often in other industries when you do that exercise, you find tons of waste.

And how is Industry 4.0 supposed to be helping to identify that value?

Martin: Industry 4.0 can help by understanding how well the value stream is functioning. One of the core components of lean is to get flow. So think of that value stream, making those sandwiches; what are things that stop up that value stream? What are those things that stop us from providing value to the customer? When I was walking out on the shop floor early on in my career, I would see it. I would see that somebody was standing waiting for material from the warehouse. So I would go, and call the warehouse, head to the warehouse to get that material.

When you're trying to strike a balance between people, and using technology to improve results, how do you find that balance?

Martin: I think one of the challenges with Industry 4.0 is in how data is viewed. If you think about Industry 4.0 as, ‘How do we digitize the shop floor?’ Then you can view operators as a source of data. If you view operators as a source of data, then they’re only there to provide you with data. So then you install technology, but they could just tell you what’s happening. The problem is that operators are busy, and lean has taught them to avoid things that don’t provide value. One thing that clearly does not provide value is them clicking a dropdown, or pushing a button, or walking over to a thing. That doesn’t provide value. It’s almost if you’ve told operators for decades that they should be looking for ways to avoid waste, and then you’re introducing this new system that is, by definition, wasting their time. It’s confusing and demotivating.

That’s if these initiatives are centred around digitization. Now, if the initiatives are centred around improvements, and if it’s clear to the operator that their contribution to the system, their contribution by tagging something, or triggering any alert, is that it is driving improvement, and applying pressure to the rest of the organization. Then it’s more motivating. One of the challenges is that, the way that we have framed data to operators, and presented it as the goal is to collect data, is not the right frame. The goal is to improve, and technology has the ability to help us be way more effective than the actions we take. But that’s not the way that many of these projects are framed.


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Do you find that in the manufacturing field, or industry that people get really wrapped up for a time on sort of the tool, as opposed to focusing on the end result?

Martin: Absolutely. Some brand-new technologies are extremely neat to look at. You can imagine the first time you installed a giant dashboard on the shop floor, it was neat. At one time I visited the Shopify office down in Waterloo, and in the main atrium is a giant screen maybe 40 feet wide by 20 feet tall. It has a map of the globe, and it’s showing these little transactions that are happening from one part of the globe to the other part of the globe. That’s the coolest thing ever. So technology can look really cool, but that didn’t really get me to do anything. That was entertaining. The purpose wasn’t to drive action. So on the shop floor, we often get distracted by how neat the tool looks, and we don’t think about whether it actually has an impact on our behaviour. That’s the bar we should be looking at.

So the problem occurs when technology is more about show, less about real change?

Martin: If we are distracting somebody with a light, graph, some sort of flashing screen, it has to guide them to take action that will result in improving. So if the screen flashes because you’re behind on your production, and you can’t do anything about it: that’s not providing any value. If the screen flashes because you’re needed right now in a certain spot, and if you go there you will actually save a bunch of time: that is useful.

So I think the measure is, if you look at a display, and if your instinct isn’t to stand up right away and go do something, it’s likely you didn’t need to look at that. I think that’s the key when deploying technology on a shop floor: if things are fine, stay out of the way. That’s a key here. In the same way GPS in your car isn’t constantly alerting you, buzzing you. It tells you when to turn left. That’s the same way we should be looking at technology on the shop floor.

Do you have an example of a manufacturer you've seen really making that connection between technology and operators, keeping that lean model, and not getting in the way?

Martin: Absolutely. One of the things to do early on for customers in their digital journey is to look for easy wins. There’s no shame in looking for the easiest ways to save. So often what happens when manufacturers are looking at their clean data for the first time, the types of things that are holding them back are pretty simple and actually mundane.


Raven’s operator-friendly hubs let operators share data in real-time with their managers. In turn, managers can pull up real-time reports and review things like downtime and through-put numerous times a day or week.

We had a client in California; when they looked at their data, they saw that their biggest issue was response time from maintenance. So one way to support them is to make sure that the Raven platform alerts are specifically focused on that particular item. Improving response time for maintenance is a known issue, but we as humans aren’t great at doing two things at the same time. So for a couple of weeks, focus exclusively on waiting for maintenance, and you’ll actually get some traction.

The client rejigged their schedule, so they could actually have the right number of maintenance people on at each time. But they also set it up so that they were all aware of this particular metric in their performance. But if you were to go to the shop floor, you’re not going to see data being—because even though technology is able to take in a bunch of data, we’re not. We can take in very little amounts of information. That being said, if we’re put in front of a problem, we’re excellent at solving those problems. So if technology wants to be helpful, it points us in the direction of the most important problem, then gets out of the way so that we can fix it.

As an engineer who has a real appreciation for data, but who has a very strong philosophy around the importance of people in manufacturing. What's your biggest frustration these days?

Martin: When you get digitization right, operators will be asking for more. That’s the thing that I think people don’t see. That nobody wants to be inefficient, but they also don’t want to waste their time. So I would say if we should spend more time listening to operators, really understanding their jobs, and understanding what’s slowing them down; then figure out how to apply modern technology to make it easier on them. That framework would make things go way, way faster. But I just see time and time again things are done technology first, people second.



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