Getting the Most out of New Technology Thursday 16 th July 2020
Getting the most out of new technology for Manufacturing AUSTMINE WEBINAR – 16 JULY 2020 Presented by: Hendrik Lourens hendrik@stratflow.com.au 2
HENDRIK LOURENS 3
Introduction 4
Extreme failure rate for new technology • 25% technology projects fail • 20- 25% don’t show ROI • 50% need massive rework Reason given: Poor management and cultural obstacles 5 SOURCE: Bernard Marr Forbes Magazine 2013
Overview 1. Obstacles to new technology 2. ERP systems example 3. Business environment 4. Solutions 6
Part 1: Obstacles to new technology 7
Obstacles • Overloaded Management • Culture • Change programs • Operations instability& limited agility of resources 8
Typical digitisation issues (1) • Siloed data that cause communication issues. • Not knowing which information is crucial for the overall system. • Not knowing how to deliver information to the right departments and decision makers and not knowing what info we already have. • Not able to identify the crucial information each department requires and how changes in other parts of the system affect this. • Not knowing in advance how decisions could affect other stakeholders and therefore not knowing where to start and how to adapt. • Not having the right skills and/or not knowing what the right skills are 9
Typical digitisation issues (2) • Managers that are overloaded • Lack of ownership and resistance • Culture, measurement and reward systems 10
Typical automation issues • Not understanding or improving process • Wrong stakeholders involved • Undiagnosed bottlenecks or quality issues • Unclear goals for implementation • Retraining, buy in • Automating areas that do not deliver to the bottom line 11
Part 2: ERP system 12
Four questions when implementing technology 1. What is the power of the new technology? 2. What limitation does it diminish? 3. What rules helped us accommodate the limitation? 4. What rules should we use now? 13
Productivity is well below its best Since 2014, mining productivity has reversed course with a gradual increase MineLens Productivity Index (MPI), 2004 = 100 14 SOURCE: Company reports and websites; MineLens by McKinsey; McKinsey analysis
Utility of paradigm Utility of paradigm Ecology age A crisis period when old methods struggle to solve today’s problem, leading to Information the emergence of age new solutions. Industrial age Today Time 15
Balanced capacity chain Raw material 10 10 10 10 10 10 Product supply Each Resource can perform at an average rate of 10 parts per hour 16
Scientific fact 1: Variation Input Output 10 Industrial Processes: NEVER a NORMAL distribution Max 12 Performance 10 Ave Min 0 Time 17
Scientific fact 2: Interdependence Mineral A B C D E F Product resources X BLOCKAGE STARVATION 18
Variation and interdependence What will the output of the two resources in combination be? 10 10 12 Performance 10 0 Time 19
Variation and interdependence 10 10 10 10 10 10 12 Performance 10 5 0 Time 20
Multiplication of KPI’s • Hold employees accountable • Multiplication of interfaces and metrics, many opposing • Should I maximise my measures, even at expense of others? • Reduced trust and cooperation • Productivity and engagement drops 21
Information age: ERP system • Tremendous amount of data available • Often implemented in top down fashion by finance • Can become the straitjacket preventing improvement 22
Part 3: Business environment 23
Businesses need to make money now and into the future Managerial Attention Constraint Engagement The soft edge 24 SOURCE: Rich Karlgaard: The soft edge
Employee engagement Gallup State of the Global Workplace Australia/NZ • 2013 – Highly engaged 24% • 2017 – Highly engaged 14% 25
Management focus for future manufacturing success • Put the customer at the centre of the business • Pursue lean operations and waste reduction • Embrace innovation • Digitise and automate • Empower employees 26
Part 4: A holistic solution 27
What does a good solution look like? • Managers do excellent work with technology implementation • Culture changes happens quickly and easily • Creates effective change platform • Improves stability and creates agility • Simplifies processes and provides focus • Guide management towards future success/balance triangle 28
A dual operating system • The Productivity Platform (PP) implemented in more than 40 manufacturers and more than 90 mines since 2000 • Delivered +20% increase in output and significant financial gains within 6 month using same resources • Change Platform to shift thinking and doing 29 SOURCE: John P Kotter, Accelerate
PP: The Flow Room • A place where the critical data is immediately visible • Where heads of departments and their direct reports are present every day, horizontal coordination • Where decisions are made looking forward and holistically • Where we practise dialogue and strengthen the new paradigm 30
PP: Focus and buffers increase flow ? ? ? 10 ? ? Protective capacity Protective capacity (flexibility) (flexibility) 12 10 Performance 5 0 Time 31
The story of a technology implementation • Business unit about to close down • Digitisation as part of new strategy • Freeing up management time and cultural change • Buy in • Turnaround in six months 32
References • Social licence and digitisation requires new thinking, H. Lourens G. Wong , AusImm, April 2020 • Mining Differently, H. Lourens G. Wong, Austmine, May 2019 • Turning mining performance around requires new thinking, H. Lourens Australian Mining, 2017 • Manufacturing differently, H. Lourens, AMT Magazine, Feb/Mar 2020 • Drawing a new map: Strategic Learning and Strategic Alignment, Amazon Kindle, 2013 • Accellerate, J.Kotter, Harvard Business Review Press, April 2014 33
THANK YOU! 34
Questions www.austmine.com.au
Upcoming Webinars NSW METS – In Focus Wednesday 22 July 2020 The Future of Autonomous Operations in Mining Thursday 23 July 2020 METS Tech Talk Webinar Series 2 Starting Wednesday 29 July 2020 www.austmine.com.au
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