DARE Acceleration (Digitization, Autonomation, Robotization and E-Commerce)
Yes COVID-19 has let us enter unprecedented times but historic data learns us that during disruptions like this, systemically things will change much deeper and more sustainable than we foresee in the middle of the disruption itself. During crisis like this, companies are much more likely to make capital investments. Specially if the reason for the crisis has shown us the risks of (dependency of) humans, the investments will be targeted on eliminating these risks.
After the first shock, where all companies are trying to protect their balance sheet, frontrunners will move forward in order to protect themselves and anticipate next waves of uncertainty. We have to realize that we are just at the beginning of the Digitization, Autonomation, Robotization and Emerce in the value chains and workflows of companies. In oder to be more agile responsive and be ready for the next disruption, the momentum is now to expect a huge DARE-BOOM.
Article by: Neil C.W. Webers
DARE Everywhere (Digitization, Autonomation, Robotization and E-Commerce) EVERYWHERE
How can DARE support value chains in order to continue producing, to continue loading cargo, to continue order picking, to continue delivering, to continue serving clients while minimizing (cross) contamination risks? Amazon, who is broadly seen as DARE frontrunner in the industry, has deep pockets to push the next wave of autonomous robots who will populate their fulfillment centers across the globe. Cross docking, order picking and loading shipments without touching the package once by a human being. Today only the last step in their supply chain has human contact: The Amazon deliverer has physical contact with the package to bring it to your door, but for how long? If Amazon manages to bridge that last gap, they will probably foresee their packages of a new quality seal: The only human being who physically touches your package is you. Today we see multiple issue in the food chains and I am quite surprised the problem has not yet been picked up broadly: Fresh suppliers like meat, dairy, produce, bread are potential hazardous sources of cross contamination. The recent outbreak at a German Meat packing plant has demonstrated the fragility of the value chain and what impact such an outbreak on a large country like Germany can have. The industries with traditionally labor intensive work combined with a direct exposure to food are in the alarm zone. They need to act fast to protect their business. Not only in the back end of value chains, also in the front end in supermarkets and restaurants we will see a huge shift. Obviously we want to provide human to human contact when service adds value, like in customer service contacts and in restaurants. But checking out in a supermarket, as it is perceived as a commodity to consumers, is much more efficient and effective in a fully automated way which same time limits any contamination threats.
Less people at the workplace does not mean less focus on people
Companies who have predominantly a virtualized workflow are completely transitioning they way they are interacting with current clients and reaching prospects. A recent Protocol article mentions Fetch Robotics, a supply chain startup deploying autonomous mobile robotics, or AMR’s for warehouses. They onboard clients fully virtually then ship the AMR’s and sets them up over Skype. Fetch has seen about 63% more inbound requests in April than it had in February this year. And they are not alone. On the front end a new group of consumers have discovered the e-commerce who have discovered how to pay, how to receive and return goods and a vast part of that population will be there to stay. Specially the ‘Boomers’ have both time and money to spend online which will hugely impact the Online Businesses. Banks, payment and other online service providers. Banks got a vast push after 9/11 because at that time they discovered that systems were totally not prepared for a disruption like that. What we can learn of that disruption is that a much broader group of business will feel their supply chain was already not robust enough within a market which drives product and process innovation. Adding risks like COVID-19 will probably push that majority to invest in DARE in order to drive responsiveness, agility and flexibility in supply chains, on top of the risk limiting necessities. Autonomous drone delivery and autonomous driving vehicle delivery are just a few real life examples which are already daily practice today. Continuous Improvement can drive the 10-20% of losses-out in companies, but what I see is that in order to gain the 40-50% companies really have to accelerate the implementation of their DARE strategy. Needless to mention that too many companies work their DARE strategy silo’ed instead of integrated as a ‘single agenda’, driving the companies strategic agenda via multiple strategic initiatives. The Next Normal is not about ‘automating’. It’s about the integrated deployment of the Progression Strategy further developing the right Human Dynamics within a needed Digital landscape. Just buying the next robot or implementing a digital problem solving tool is not enough. The coherence and clear strategic link is key to drive this accelerated digital transformation.
DARE Strategy (Digitization, Autonomation, Robotization and E-Commerce)
The researches of McKinsey & Company have published recently about how manufacturing can escape the ‘pilot purgatory’: companies who are investing in digital innovations without seeing benefits of those investment yet. In their publication McKinsey refers to 3 elements the DARE wave should drive:
- Connectivity. This enables the flow of relevant information to the right decision makers in real time. Examples include digital performance management and the use of augmented reality to communicate interactive work instructions and standard operating procedures.
- Intelligence. Use cases relate to applying advanced analytics and artificial intelligence to an array of data to generate new insights and enable better decision making. Examples include predictive maintenance, digital quality management, and AI-driven demand forecasting.
- Flexible automation. In this area, new robotic technologies are leveraged to improve the productivity, quality, and safety of operational processes. Examples include autonomous guided vehicles and using cobots for assembly processes
The one element that is key in the Factory of the future is the integrated design of People and DARE. Less people at the workplace does not mean less focus on people. It’s means that the people who are still in the process, though less, form a more critical role in the chain of process influencers. Therefore a clear and aligned Strategic Single Agendaon Digital Capabilities, People Capabilities and Business Capabilities are crucial in order to drive the right future results.
About the author:
Neil C.W. Webers is Executive Vice President Americas and member of the group executive board for EFESO Management Consultants . Neil is author of several management publications and founder and author of Performance Behavior.