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There is no Digital Transformation

Connectivity is the Competitive Advantage


As indicated in an article I posted in July, I am extremely interested and almost consumed with the role the lean community should and must play in the “digital transformation”. The more research I do the more convinced I am that we as a lean community need to more than simply engage in the digital transformation or Factory 4.0, we need to take the lead. In the July article I stressed my fear that the digital transformation was making many of the same mistakes we made with lean transformation. The single biggest mistake was thinking that lean, and now digital, is about the tools. Maybe the second biggest mistake is the language?

Years ago my partner Jamie Flinchbaugh and I committed to never use the phrase “lean manufacturing”. It only served to confuse people and send a message that lean applied only to manufacturing, or even in some cases a narrower application, automobile manufacturing. We have all heard it and remarkably we still hear it. I’ve been working with the railroad in the UK and I can’t count the number of times I have heard an employee say “lean doesn’t apply to us, we don’t make stuff”.  In the early 1990’s Chrysler realized the power of language and changed the Chrysler Manufacturing System to the Chrysler Operating System. I was there at that time and I saw the difference.

A few days ago I was speaking with Tim Corcoran, CEO of ZF North America specifically about digital transformation. Of all the research and all the interviews, I value Tim’s insight and input above all others.  Possibly the most revealing moment of the discussion was when Tim made it clear that this is not a digital transformation, digital has been around for 30 years, it’s a connectivity transformation. I wish I had said it. This was further validated when a day later I watched a presentation by Steve Spears of MIT at the HPE Big Data conference. Steve stressed the power and need of the “knowledge worker”.  In listening to Steve it became clearer to me that the “connectivity transformation” is the key to exponentially increase the knowledge worker’s IQ. Big Data is not the key. If all companies have or can have all the same “stuff” (technology, equipment, suppliers, etc.) then the competitive difference has to be how people connect to the “stuff”. What would happen if all the work had been done to service a customer before the customer even asked? What would happen if all the work is done before starting work and not while at work?  The complete solution for the customer or the worker is behind the scenes and before it’s needed.

Ask yourself, how much value is generated at any point of exchange (connection)? For years I have been preaching that single biggest cause of problems, big and small, is failed (broken) connections. I need to supplement that with the single biggest competitive advantage is connectivity.

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