Ten Strategies for Using AI in Manufacturing
The following article first appeared on CLA’s Manufacturing & Distribution Blog. It is reposted here with permission.
With no end in sight for labor shortages thanks to pandemic-fueled worker exits, reshoring, changing workforce demographics, and more—board-level pressure for efficiencies will drive strategic planning well into the next decade.
The race is on to embrace new technologies in manufacturing—and all eyes are on AI.
Last September, 100-plus senior executives gathered in Milwaukee to discuss “Investments in AI and Digital Technologies to Address Labor Challenges.”
Three CXO executives of manufacturing companies headquartered in Milwaukee offered insights into how AI and digital technologies are transforming their business today … and what’s on the horizon for 2024 planning and beyond.
“Leaders, collaborating closely with IT, must set the tone …” was a key takeaway.
1. Look Across the Enterprise
All three executives see potential with AI to simplify the lives of employees, infuse ways to be more proactive, and speed up decision making.
AI can touch every functional area of a business.
Some emerging AI approaches to watch:
For one executive with a 100-plus year old business, the timing for digital adoption has been hyper compressed—ERP and an intranet were only recently adopted by their company in 2019.
It’s a lot of change for employees. With business growth at an all-time high, however, technology is key for scale.
2. It’s Early Days—But Don’t Let That Hold You Up
Even though ROI may not be clear cut, AI is an opportunity to learn.
As one executive noted, “be at the forefront and don’t wait for ‘human glue.’”
“We don’t have all the answers yet but don’t let that slow down the chance for staff to lean in and get creative.”
Another noted, “there’s no budget for AI and chat GPT. For anyone who has taken a Myers Briggs Type Indicator Test, the corporate world has a ‘J’ or judgmental mindset.”
“With AI, that mindset must dissolve. We are building a culture for risk taking and experimenting.”
3. Find the ‘Non-Event’
AI yields an opportunity to address concerns around what isn’t keeping you awake at night … but should be?
As one executive noted, “customers don’t want to tell us what’s something’s wrong—we need to be proactive.”
The data is right there in your systems. AI can pull it out using creative logic you define.
Another executive noted HR was wondering about hiring more people. With a little data mining, they learned it wasn’t about adding staff—it was about paying better.
4. Tighten Up Security
It didn’t take long for the conversation to turn to security—as the same AI technology used by manufacturers for good is also turned against them by bad actors.
An ongoing cyber program is mission critical.
As many organizations were blocking Chat GPT, one executive described how their company embraced it, because engineers were already using it to write code as a time saver.
There were three keys to making it work: 1) education; 2) security (had to re-launch a policy immediately); and 3) keeping data internal.
“Our goal was to have a safe zone for people to experiment, so we launched a Chat GPT internally to prevent folks from hunting externally,” the executive explained.
“The system crawls all our systems (except HR) and gets smarter over time about how people work. Technical specs, instruction manuals, warranty data … it’s all out there.”
Data is among your top strategic assets, and AI is a great way to wring out its value in more reliable and meaningful ways.
5. The Human Factor
A couple of executives have union shops.
The onset of AI today feels a lot like the era when Lean manufacturing took off, and employees had concerns over their jobs.
“We had to be patient,” said one. “We host weeks of meetings ahead of time and take a parochial approach to walk though changes.”
Another noted “it’s helpful to get to know your people—who is biggest naysayer, biggest adopter. Find your balance and team members eager to lean in. Get staff involved as early as possible.”
“We underestimated the amount of change management,” they said. “We had to create a culture for staff to ask for tech and want adopt it—to win over hearts and minds.
“Technology is an accelerator to improve morale and free up time to develop careers. We don’t replace people, we elevate them.”
It’s not about fewer jobs, but better jobs.
6. Hire the Right People
“For us, it begins with our hiring strategy,” noted one executive.
“Young people are eager for tech and see it as an extension of what they are used to. We gamify where we can to improve adoption.”
Another, with the 100-plus year-old business, expanded: “we had to bring in new people and sprinkle them cross-functionally. The goal is to start small and show wins.”
For another, risk aversion is a constant challenge: “We teach long-standing employees to take risks with an ‘innovation zone’ to experience tech they would not see typically see day to day. This allows for new conversations about possibilities.”
Hire with a “three Cs” mindset: Curious (ask questions), Creativity (bring creativity to a problem and be famous for solving it), and Courage (to take risks and get it over finish line).
7. Upskill Your Workforce
You won’t find enough talent in the market, and if you do, it’s too expensive. You’ll have to build it.
Demand outstrips supply of talent with working knowledge of AI, data, and digital technologies.
“We had no choice but to upskill our team and change career drift—one employee at a time,” noted one executive.
Assess your talent base—these technologies will be around for a while. Start to dangle ideas and see who is interested in developing their skills.
Check out an emerging new field: AI prompt engineers. These professionals train AI to improve accuracy of responses.
8. Focus on Customer Buy-In
“Getting customers to buy in has been a journey; we’ve had to train customers as much as employees,” an executive noted.
“We used to have a big call center. Our product has thousands of configurations. With a complex customer base of mostly of small businesses, today there’s no way we could manage our growing volume of calls without technology.”
Routine cases are automated as customers can log their own tickets and address warranty issues. Escalated cases are assigned to customer experience associates.
“Overall, we’re giving better service with quicker response, which is appreciated by customers.” they said.
9. Get Creative
You don’t have to replace your current automation platform to take things to a whole new level.
For example, “you can add AI on top of your current automation systems for a process to improve itself.”
Robots today are training themselves.
With many machine vendors having their own languages, AI bridges the gap between IoT and internet 4.0.
10. Rethink Supply Chains
There are hard and soft costs with technology and inventory is one of the hard costs that’s easier to measure.
During COVID, one executive noted “customers played games with forecasts, now have we have $1-$2 million extra in inventory.
“Today we are optimizing our supply base from OEMs down to sub-suppliers because that’s where the value is.
“Rather than sit on millions of dollars of inventory, we are finding ways to move materials to other suppliers.
“We realized our production plan was good, but if we leveraged our data and did several things differently, we’d go from good to great.”
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