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Smart manufacturing technology is a dumb idea without good leadership

A manufacturing CEO explains why the IT-driven revolution in the factory won't amount to much without an educated, engaged workforce and credibility and respect from top managers.

Someone asked me recently my thoughts on smart manufacturing -- the so-called IT revolution in the factory. They couldn't believe that I didn't see smart manufacturing technology as the salvation of American manufacturing.

Don't misunderstand me. Smart manufacturing technology has a place in reviving the nation's industrial sector. I have a smart factory. We employ the latest in pick-to-light systems, automated computer numerical control machines and seamless integration from order inquiry to accounts receivable. But that isn't where I started my revolution, and you shouldn't start there either.

Steven L. Blue, president and CEO, Miller IngenuitySteven L. Blue

The problem with many CEOs today is they have turned away from the astonishing potential of the workforce, and turned toward automation instead. Big mistake, but I hear about it all the time.

What is the sense in spending millions on smart manufacturing technology to automate your factory if the workforce couldn't care less? What is the sense in buying expensive machine tools if your workforce can't wait to get to the bowling alley, yet they drag themselves to work?

I'll tell you why the workforce feels this way: because too many CEOs view their employees as expandable assets. They should view them as renewable resources, and then renew them.

Start by including the entire workforce in company-wide updates. People feel better when they know what is happening. They feel more in control and, therefore, less stressed.

Provide opportunities for sabbaticals. One CEO I know gives people time off with pay to travel overseas for volunteer work. He even subsidizes their travel expenses.

Don't bother implementing smart manufacturing technology if you have a dumb workforce. And if your workforce is dumb, it's your fault, not theirs.

Don't bother implementing smart manufacturing technology if you have a dumb workforce.

Don't bother with an IT revolution either. Your revolution has to start with a smart workforce. You have to make a new compact with your employees and ignite the human spirit in your workforce. You can start by installing a set of values that people can believe in and get behind. I always say the most important characteristics of great leaders are respect for people and integrity. If you demonstrate both of those, people will feel good about themselves and their jobs.

Imagine this: What would happen if every day your employees came to work excited to do better today than they did yesterday? Imagine how your company would soar if your employees were absolutely dedicated to supporting the mission and each other in attaining it?

This is the place where I get blank stares from many CEOs. They don't like the soft stuff.

"Give me the hard stuff," they say. "Tell me how to build a smart factory, not a smart workforce," is what I often hear. Smart manufacturing technology is their focus.

It has to be the other way around. Start by building a smart workforce. A workforce that is engaged, enlightened and empowered, and that trusts and believes in its leadership.

It's a tall order to be sure -- especially if the leadership is a bunch of boneheads that care more about depreciation than employee engagement. This can be as simple as asking people what they think about a change you are thinking of making -- before you make it. It can also be as simple as asking for ideas about a problem before you jump into the solution.

Four keys to smart manufacturing leadership

Here are four key ways to start.

  1. At the top. Build leadership credibility. The only way to have that is if your leaders demonstrate the key values of respect and integrity.
  2. Treat employees with respect. Many leaders don't do this.

    Half of the employees in a recent Harvard Business School study said they did not feel respected by their leaders. Respect was rated by the participants as more important than anything else, including compensation. Imagine how corporate performance would skyrocket if you solved this one problem alone.

  3. Demonstrate integrity. In study after study, integrity is a key attribute in leaders that people admire and want to follow. Integrity is a key part of building credibility. Leaders need to show integrity in everything they say.

    You can't be like many leaders and "tell half the truth, hoping the other half doesn't show up." You have to be honest all the time and tell employees what they need to know. If the company is headed for trouble, tell them. If it needs to pivot into new markets or products, tell them. And explain why. Tell them everything. You would be amazed at how smart your workforce can be if you give them half a chance. I always say: trust in truth.

  4. Instill the values of respect and integrity in your entire workforce. It's not just for top managers. But you cannot expect people below to do what the top will not.

    You may also have leaders who lost credibility long ago. They can't get it back. You have to replace them.

Smart manufacturing starts with creating a new compact with the workforce. It starts with people, not machines.

About the author:
Steven L. Blue is president & CEO of Miller Ingenuity, a
global supplier of solutions for the transportation industry, and author of the new book, American Manufacturing 2.0: What Went Wrong and How to Make It Right. Visit his website or connect with him on Twitter @SteveBlueCEO.

Next Steps

Read how Miller Ingenuity implemented lean manufacturing

Learn the basics of digital manufacturing

Understand industrial internet of things integration

This was last published in February 2017

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What is your company's main obstacle to implementing smart manufacturing technology?
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I appreciate Mr. Blue's perspective. It is rare indeed. Thank you.

Upper management has been viewing their employees in especially poor light since the Great Recession hit. Combine their bad attitude along with their overeducated middle managers' bad attitude and the result is an overall bad attitude. The kicker is that manufacturers are making money and as long as the major stockholders, including upper management, get theirs the view with rarely be from beyond the end of upper management's desk.

With low pay and facing a bad attitude, bowling looks better and better each day.

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Thanks for sharing your accurate analysis, Mr. Blue. It's just not only the smart manufacturing pushing the technology to be dumb enough. The analogy is, it is not even a fair battle ground. Long before entering the battle ground a warrior has all the instincts of a battle he may fight. His courage comes with respect and integrity. A tactful warrior doesn't lean on his own strengths alone. A true warrior gives his life for his people. He always learns from his ample past experiences and pushes his boundary to pivot every time. With at most humility he tries to build his troop. But he never lets out his insecurities; he is warrior after all. That's his strength. The battle suddenly erupts. He enters the battle ground only to discover that his troop are spectators, cheerleaders and bystanders, his only choice is to fight his battle alone. The battle turns out to be in pitch dark night, he has to guard his ground, tackle the swords and arrows that could sprung from all over. He is not sure if he is battling against one or more. As time extends in an unfair battle, it's not the victory the warrior cares about. The warrior's only pride would be to fight a good battle and to leave the ground with dignity, respect and integrity. 
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Some very good thoughts provided by Mr. Blue - and indeed, those can also explain why German manufacturers are so successful worldwide. The reason is certainly not lower pricing, rather it is product and service quality - which directly depends on the skills and motivation of the employees. By tradition, many German manufacturers have a management style that is well in line with the suggestions contained in this article.
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"Too many CEOs view their employees as expandable assets" - do you mean "expendable assets"?
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