Let Your System Speak

Sequencing Tech Adoption Based on

Your System’s Pull Signals
Dr. John F. Carrier
© Massachusetts Institute of Technology
 ▪ Dr. Carrier works with senior and front-line managers to
improve manufacturing and business processes and
About serves as an on-site hands-on coach in support of
Dr. John projects.
▪ His research focuses on the competitive advantage of
Carrier synchronization of operations within supply chains.
▪ He teaches a popular Executive Education course on
Industry 4.0 and IIoT (https://tinyurl.com/yafmbdqe )
▪ He has more than 20 years of experience in a variety of
corporate, entrepreneurial, and consulting
environments.
▪ Dr. Carrier holds a BS in Chemical Engineering from
the University of Michigan, a PhD in Chemical
Engineering from MIT, and an MBA from Harvard
Business School.

Website: www.jfcarrie@mit.edu
2
© Massachusetts Institute of Technology
What’s the problem?

▪ History presents us with a graveyard of failed

technological launches

▪ They generally follow the pattern of:

– New technology forced upon system
– System does its best to expose flaws of that new
technology
– A long painful period follows

Are we matching our systems to the technology, or

matching the technology to our systems?
© Massachusetts Institute of Technology
… but it comes along with a lot of hype

© Massachusetts Institute of Technology

… yet it must be remembered

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A Paradox -

“There are more good tools out there

than companies who use them.”
- Prof. John DC Little, MIT Sloan School

© Massachusetts Institute of Technology

Your Trash Can Contains a Kanban

• This is a trash can

• It contains a kanban

• Can you see it? Bill

Gates couldn’t …

© Massachusetts Institute of Technology

Similar systems – different synchronization

• Identify systems with

valuable total assets

• Find the “clock” in the

system and measure its
utilization time – does it
“de-synchronize”?

• The higher the $/minute,

the more synchronization
is justified

© Massachusetts Institute of Technology

The System Speaks …
The Twelve Leverage Points to
Intervene in a System
(ordered by effectiveness)

Donella Meadows
1941- 2001
MIT Researcher

Source: The Sustainability Institute © Massachusetts Institute of Technology

 Finding a Hidden Factory …

20% defective
BEFORE

WELDING SHOP
ALASKA NORTH SLOPE
Design Welder Customer
(Town) (Slope)

70% arc time

20% defective
CURRENT

Design Inspector Welder Customer

(Town) (Slope) (Slope)

90% arc time

WHERE’S SYSTEM 2 IN THE CURRENT STATE?

© Massachusetts Institute of Technology

The 3+1 Method
Scope
• Find the lost minutes and
seconds (symptom)
• What’s a minute really
worth (in $)?
• Scope down to the
location of the root
cause(s)
• Write the problem
statement
• Go “see” and
capture an artifact
• Identify the tech that would
“change the system”
Stakeholders – (three perspectives)
String Scal
•
e
Discuss the “power of
• Select the sensor
you need the platform” and your
company’s role
• Select the IIoT kit, • Identify
sensor and requirements for
prototype platform your supply chain
• Review your
• Design the output
format, algorithm,
current network
infrastructure
and control action
• Match against
• “String it up” current offerings
• Retain options for
• Make into a use
flexibility
case
© Massachusetts Institute of Technology
The Paramo Paradox
• 1960’s: A high school instructor
purchases slide rules for his
honors physics class

• He wanted the class to spend

less time on routine calculations
and more time on the physics

• Halfway through the exam, he

heard a slapping sound – the
students were going back to
hand calculations when they
came to the more difficult
problems

• This was the opposite of his

intent. Why ?
© Massachusetts Institute of Technology
An example from Industry 3.0
Location: Germany, 1973

The problem: You want to sell

calculators, but the engineers FRON
are sticking with their trusty slide T
rules (Why?)

The Innovation: Make it easier BAC

for the “customer” to make the K
transition

Adoption rate depends more on the SYSTEM than on the TECHNOLOGY

© Massachusetts Institute of Technology
Diabetes Management (2019)

• Diabetes is currently a $320B/yr

problem in the US

• The Novo Insulin pen (simple

delivery) had more impact than
Genentech’s human insulin

• Currently, patients are required

to record paper logs, and nurses
are required to interpret control
charts

• How does this explain low

adoption if insulin is a life-saving
drug?
Source: Pascal Witz, PWH Advisors, 2019 MITEF
Connected Things Conference © Massachusetts Institute of Technology
Let’s look at your system …
Defect Defect
Created Detected
As Designed

Step 1 Step 2 Step 3 Step n

* *

Hidden Factory
Work-
around Work- ~ 30% of
around
Work- work
around
Work- Feigenbaum
around
(1960’s)

Exercise: How Can Industry 4.0 help?

© Massachusetts Institute of Technology

Finding Hidden Factories Using Little’s Law

“Good” process
Does this look
Special familiar?
Cause
Failure
Frequency

How does the

hidden factory
decide how your
organization is run?
Time in System (“W”)
The CEO
asked for it Visited Do you see the
Hidden business model?
Factory

This is your System speaking! © Massachusetts Institute of Technology

A model for managing creative enterprises

Defect
Defect Created Detected SYSTEM 1
Created Detected
** CUSTOMER
**

We earn here
Scientific
SHARE Swarm
Scientific
Swarm SYSTEM
We learn here
System 2: Focused
Factory for
Defect Elimination
ESCALAT
E

- We don’t earn We clog the system with

defects until failure
- We don’t learn

© Massachusetts Institute of Technology

Aligning Definitions

• Lean
• synchronizing the parts of your system to meet
customer demand

• Agile
• Re-synchronizing the parts of your system to meet
changing customer demand

© Massachusetts Institute of Technology

When you go back to your system …
YOUR FACTORY =
(“GOOD” + HIDDEN)
SYSTEM “GOOD” FACTORY HIDDEN FACTORY FACTORY
Productivity Good Poor
Quality Good, repeatable Poor, variable
Responsiveness Good Abysmal
Safety and Risk Low, known, stable High, unknown, unstable

Moral and retention Good Poor

Learning and innovation TBD “Noise” Who decides?

Culture Your culture “Hidden Factory” Culture

Quality of your people Good+ Same as the “Good”

Factory
Leadership Good Defects make decisions
Frequency

What’s a minute worth?

Time in System (“W”)

© Massachusetts Institute of Technology
Key Lessons

▪ Set your organization’s principles

▪ Start removing what doesn’t meet these principles

(5S/VSM – make space and time)

▪ … then bring in technology so that the System will

not reject it

© Massachusetts Institute of Technology

On Culture …

Culture depends on how we think

Ed Schein
Emeritus Professor
Sloan School of Mgmt

© Massachusetts Institute of Technology