Now that our Shinchoku web site is live, the e-mail addresses have been assigned and some projects are underway, it’s time to have a look at Smart Industry from a slightly different perspective. What we see a lot in publications, on sites like LinkedIn and on company blogs is technology descriptions, solutions that worked in one place (success stories) and bright outlooks to the future.
What we don’t see – perhaps because it doesn’t fit the sales story – is the side of the manufacturer. A lot of the things that are published about Smart Industry focus on the solution, not on how manufacturer perceives things.
Taking a look at what we aim for with Shinchoku, we try to take a different view, but as you can see by my earlier writings, we also get carried away by the solution we think we have.
That’s fine, because it gives a drive to the people working on the solution, but it doesn’t necessarily sell. In order sell, we need to show the customer that after the initial investment in Smart Industry they actually gain something. Show them that there is a return on investment, that it is not just a technology push.
For example, we’ve been talking to a number of (potential customers) about the benefits of a MES system. Of course, they all understand that being able to plan is useful, and becomes even more useful if you get feedback about production status from your production lines as well. However, at any given point in time, the big question comes up, or actually the three big questions: what does it cost, what is my return-on-investment and how long does it take to break even?
Important questions for any business making an investment, but also one that bites back at the asker as well as to us as service provider.
The reason is two-fold. First of all the customer asking the question knows why the investment is needed, but also is very much aware that he hasn’t yet shown (or even quantified for himself) how big his current problem is. Partly because it’s sensitive information, partly because he simply doesn’t know (yet) how much time and money are currently lost due to inefficiencies, non-sustainable solutions and organizational mismatches in production.
Second, it bites back to us as suppliers, because without the above information, we can make a proposal, but we cannot answer the three questions. That leads to the interesting situation that we have to ask the customer how much is lost now, match that with our proposed solution and then calculate the RoI and break even point. Awkward for obvious reasons for the customer, who has to either cough up sensitive information or admit is not available. Awkward for us, because we don’t know the numbers – often finding the missing input numbers is part of our proposal.
As an example, we can make a proposal to help a customer how notices that he loses money because he’s not optimally using the capacity of his production line – leading to late order delivery and loss of income. Also, part of the production is for material that is not on order yet – but may be needed in the future as parts of other orders. A certain amount of that material gets scrapped, because the prediction was wrong. If we propose to set up a system that helps finding out the numbers that go with this case, the three questions become a chicken and egg problem: how can we predict return on investment if we nor the customer know the numbers? And how hard is it for the customer, often a middle manager having to defend our solution to a board of management, to admit he can’t help us provide even the ball park numbers?
We have customers like this, because our target market consists of manufacturing SMEs that have minimal or no automation in place yet. Our mission for the last months of 2021 is clear: come up with a start-up solution for potential customers. A solution that helps them see the size of their problem in numbers, and that helps us to answer these three awkward questions. Not a bad assignment, luckily our team is ready to pick up the challenge.
For this year, this is the last bit of rambling about Shinchoku, if the editors allow there will be more about our experiences here next year. An early Merry Christmas and best wishes for 2022 from Arianna, Kamen, Sil and Angelo.
Photo by [Unsplash, Mathieu Stern]