Finding the Extra Gear for Your Organization's Digital Transformation
John Carrier helps organizations boost their performance by identifying bottlenecks and preparing for unseen events.
Investment in technology is essential for corporate survival. But the act of investment is no guarantee that the organization will realize the benefits that are put forward in the business proposal, says John Carrier, a senior lecturer in system dynamics at the MIT Sloan School of Management.
However, a visit to the workplace using a system thinking perspective can unleash the “emergent value” that results when the people on the floor gain the right to apply their creativity to the process of technology adoption, Carrier says.
A visit to the workplace using a system thinking perspective can unleash the “emergent value” that results when the people on the floor gain the right to apply their creativity to the process of technology adoption
For example, the installation of digital dashboards for real-time display of metrics is widely embraced by large companies with multiple operating sites, Carrier says. However, this advanced technology has a critical limitation with respect to the traditional whiteboard—it is a one-way form of communication that prevents front-line feedback from being collected and shared.
This limitation was shown by one Fortune 50 corporation that made major strides towards streamlining their company’s process by investing in operations for a fleet of delivery vans. The company first analyzed the vans’ sensor data to assess their condition, then displayed the results on a custom dashboard app. However, while this increase in visibility did produce a significant improvement in maintenance efficiency, too many of its vans remained stuck sitting in repair shops.
When touring these shops, Carrier noticed there were no tools to enhance bilateral communication across teams. The dashboard app only facilitated flow of information in a top-down direction, eliminating a channel that would let workers communicate daily problems or troubleshoot with their teams. Whiteboards could provide that channel.
At MIT, Carrier’s primary focus is in helping organizations and their leaders identify the lost potential within their current systems. Once this potential is identified, Carrier guides organizations on selecting optimal methods to reduce risk and increase resilience to fast-changing events.
Early in his career, while working towards an MIT doctorate in systems dynamics, Carrier learned the value in identifying bottlenecks and streamlining tasks. “Stopping points” in a production flow indicate a need to adopt new technologies that produce value for the entire organization.
Today, senior executives and their teams enrolled in Carrier’s executive education courses quickly grasp this concept, and are eager to enhance flow in systems at their organizations, thus finding an extra gear for higher organizational performance.
One team returned to a large Heineken brewery in Mexico City and discovered a significant bottleneck: Data on production status was gathered manually and stored locally in spreadsheets. By collecting this operational data and sharing it in the cloud, the brewery found it could roll out an extra million cases of beer each month. How? By reducing the elapsed time to reschedule an emergency bottling line change from 6 hours down to 15 minutes.
In recent years, manufacturers have benefited from an influx of high-quality, low cost sensors that can detect and share data from the production line in real time. “Now we can take the proper action with our best minds looking at the same set of information at the same time,” says Carrier.
Today’s challenges lie in integrating AI that can facilitate how we interpret the extensive inflow of data to make effective decisions for a manufacturing process.
It’s important to take a step-by-step approach to adopting new technologies, he emphasizes. For example, it is better to install 30 sensors on the most challenging equipment on a manufacturing line instead of installing 300 sensors and building a backlog of data analysis work that overloads the instrumentation and control staff. Instead, by starting with a small set of sensors on the most problematic equipment, the team can learn rapidly and avoid repeating the same implementation mistakes at ten times the scale.
In most major industrial accidents, the system breakdown was not a first- time occurrence. A key part of resilience, Carrier says, is returning to near misses, to critically think through and address problems as they arise, and to develop response plans for future events.
Most large corporations have formed risk groups to address significant risks, but smaller risks often slip through the cracks. Although these smaller incidents aren’t very important in isolation, they may propagate into major incidents in the future.
“All risks cannot be forethought and prevented,” he says. “But we can deal with that problem by bringing in the additional concept of resilience. Through rapid response, we can significantly mitigate the consequences.” Additionally, using new simulation software, companies can run low-cost simulations to train employees on handling accidents and workarounds within systems.
In his course on organizational resilience, Carrier walks through optimizing cost at the expense of taking on additional risk by considering the boundaries and capacity of the entire supply chain.
His course focuses on how to set up systems, structures, and measurements to fall within the boundaries specified by risk models. This method can be applied with equal force to organizations from industry, government, healthcare and academia, he says. The course brings together leaders from a diverse set of industries, because risks in systems behave similarly across organizations.