Business leaders today are expected to deliver on their priorities faster since entering the age of digital transformation. They have to achieve certain business results, set lofty strategic goals, and implement transformational business and operating models while solving a multitude of business challenges.
Companies are having to redefine how departments and the processes of a company work together enterprise-wide; thus, refining the effectiveness of value stream management (VSM), a concise methodology that brings all workflows consistently under one umbrella with no interruptions. In fact, VSM has shown that improvement in team communications to positively impact productivity, quality control and time to market is fundamental, and yet there is still a lot of work to be done.
For instance, within the next few years, over 40% of companies will have refocused their initiatives on communication and emerging technology skills for their workforce, according to CompTIA research report. Strategically, VSM is helping to bring disparate organizational silos together and is becoming the catalyst for stimulating and prioritizing a digital transformation enterprise-wide.
Productivity Challenges
Leaders are often frustrated by their productivity levels not producing the expected results. When development speeds up but overall delivery times still remain unpredictable and lengthy, VSM can make a difference in helping to identify bottlenecks. It can also help determine where it makes sense to use artificial intelligence (AI) and identify organizational intervention where it is needed.
For instance, digitized communications between teams help avoid production downtime and inconsistent supply chain processes that create costly delays. According to ITIC, 86% of manufacturers report that one single hour of downtime in their systems, networks, applications or other hardware can cost at least $300,000. Aligning operational teams and capturing critical tacit knowledge that may otherwise be lost is crucial and these challenges have been brought to the forefront of the 90% some businesses engaged in digital initiatives.
2030 Predictions—Shift The Focus To The Workforce
Within the next 10 years, approximately 4 million manufacturing job openings will be available, of which 2.1 million are estimated to go unfilled due to the lack of manufacturing career-oriented individuals. Couple those frightening figures with Deloitte and The Manufacturing Institute having reported that the cost of not being able to fulfill those manufacturing jobs is estimated to potentially come to $1 trillion in 2030 alone.
There is hope, however, that the digital transformation age and the fast evolution of AI-enabled technologies will aid with the level of manufacturing agility business leaders will need while keeping their workforce and assets (equipment, networks, systems) functioning optimally. CEOs are paying closer attention than ever before since studies are estimating Fortune Global 500 manufacturers will lose about 3.3 million hours each year because of unplanned downtime and missed production runs. This translates to a financial loss of $864 billion, comprising about 8% of total revenues annually.
VSM will be instrumental in putting a sizable dent in millions of hours lost by finding the weak points within the production processes and enabling optimization. The business value of VSM in remapping workflows can translate to substantially increased performance as well as create substantial time savings. Let’s look at how leaders can best leverage it.
C-Suite Investments
Within the next five years, expect to see the C-level invest in new operating models and refocus on shifting customer and business prioritization. VSM will become the preferred approach, especially due to the speed of change, which is driving organizations to rethink how to expedite value.
Soon to be accepted as standard practice for manufacturers, leaders can use VSM to identify, prioritize, fund and execute initiatives that benefit customers while deconstructing barriers and inefficiencies of traditional production management approaches.
Optimizing The Flow Of Value
By enabling manufacturers to understand and prioritize customer needs, they will be drawn to developing a more customer-focused, agile and continuous-improvement mindset.
No longer will traditional approaches organize around functional silos designed for their own localized optimization but rather adopt end-to-end value that will be delivered across the enterprise. Previous approaches for identifying initiatives, allocating budgets and executing delivery will be considered dated and inefficient due to multiple handoffs and delays, and a lack of systemic visibility. To help with this, use a VSM approach to provide manufacturers improved visibility into end-to-end complex processes, and optimize the flow of value.
The Element Of AI
All the developments in hybrid AI-based systems are creating insights along the value chain such as those that could involve individualized human-machine interaction, digital twins, simulation, data transmission and of course analytics. The software providers that are early adopters of AI integration with their systems, equipment and machines deliver a competitive advantage for manufacturers. AI-enabled systems can also benefit teams to identify new value streams.
With VSM, manufacturers identify the communication loopholes and pitfalls that hamper the processes of continuously providing value to customers. By carefully integrating AI, teams are proactively flagged where gaps are identified and improved upon before any issues arise. When value stream expectations on results are achieved, it allows teams the space needed to focus on other things such as innovation.
Case In Point
The 24/7 operations typical in such process industries as chemical, pharmaceutical, nutraceutical, food and beverage use VSM to gain a common framework for continuous improvement of their manufacturing execution processes often at multiple production sites. They deploy operational disciplines using a set of digital playbooks, best practices and KPIs including overall equipment effectiveness (OEE) to achieve manufacturing excellence.
To address greater global demand, leaders can use VSM to increase the utilization and performance of production in their plants to help management and operation teams identify and drive OEE improvement opportunities. Implementing the right software system that can deliver OEE dashboards to visualize KPIs at plants, sites and business unit levels will provide management with real-time insights.
VSM is an essential aspect of every business today. It will become more commonplace for manufacturers to generate new value propositions.
In the context of the Industrial Revolution, applying technology to operating mechanisms in each organization is extremely necessary, and is also an inevitable trend to minimize workload while still ensuring efficiency and enhance its competitive position in the market. Furthermore, applying management software into a business will also help build an organization with a clear system, promoting consistency, transparency and accuracy. Tasken eOffice, researched and built by Opus Solution – a business consultant in Vietnam – is an internal work management system as well as the management of automated, online, user-friendly approval processes, allowing businesses to operate more effectively on the path of digital transformation.
Forbes
