Mitsubishi Electric: Change Management in Manufacturing
Mitsubishi Electric is regarded as one of the world’s most renowned names in the manufacturing and sale of electrical and electronic products and systems.
Founded in 1921, Mitsubishi Electric has been at the forefront of Japan’s technical ingenuity and product innovation. Following its first successful product - an electric fan built for consumer use - the organisation has continued to create a long list of firsts and groundbreaking new technologies that have shaped its business fields worldwide.
Frederik Gesthuysen is the Manager Sales Administration and Marketing at Mitsubishi Electric Europe B.V. He has witnessed first hand how the manufacturing industry has transformed due to the introduction of the Internet of Things. “The key to surviving today’s severe market competition is the prompt and timely implementation of IoT, not only on the production shop floor but also throughout the manufacturing field,” says Gesthuysen. “In response to this need, we already developed the “[email protected]” integration solution back in 2013. At its core is “edge computing,” advanced technologies that utilise AI to collect data from the production shop floor and analyse it in real-time, thereby improving manufacturing. Of course, such a level of digitalisation and automation is not possible to realise without any 3rd party support; therefore, we integrated more than 900 “[email protected] alliance” partners.”
Manufacturing is driven by technology. With the importance of leveraging the latest trends essential to success in the industry, Gesthuysen recognises that digitalisation is at the heart. “Our customers expect the networking to bring the next great leap in development and thus a competitive advantage,” says Gesthuysen. “The digitalisation of processes and products also goes along with new solution offerings and business models, especially in the field of service. For the future viability of machine tool manufacturers, this means that services, consulting and service offerings are becoming even more important. Another crucial factor for automated and networked production is the integration of robots into manufacturing systems.
“Machine tools are increasingly merging with the robot and are no longer standing side by side as separate components. Mitsubishi Electric reacted to this by introducing our ‘Direct Robot Control’ (DRC) functionality, which enables our robots to be connected to and directly operated by our CNC.”
In such a competitive industry, Gesthuysen understands how vital it is to be agile and lean in order to adapt to the latest trends. “It’s important to always be on top when it comes to recognising trends and driving innovation,” he explains. “On the other side, you need to make sure not to blindly follow those trends and just rush into the market with new developments.” Mitsubishi Electric follows the Japanese “Kaizen” philosophy. Kaizen is a continuous process that never ends and means change for the better. Kaizen sees improvement in productivity as an ongoing and gradual process. “To us, it is particularly important that innovations are introduced gradually so that they remain manageable,” says Gesthuysen. “Therefore, it’s not a question of radical breaks and doing everything differently from one day to the next. Instead, it is a slow, controlled process in which everyone involved engages in repeated questioning, checking, trying-out and adaptation. We think that this is the best approach in order to really be able to listen and adapt to our customer’s requirements and assure the best possible quality of our products and solutions.”
Roman Gaida is the Deputy Head of CNC Mechatronics Division EMEA at Mitsubishi Electric, with over 20 years of professional experience combined with entrepreneurial thinking and a strong ability for customer needs, leadership and cultural change. “It all started with a gap evaluation in cooperation with an external partner,” explains Gaida. “Since the market and also our customers are changing faster than ever, we had to adapt our approach and processes to the changing environment. We had room for development in regards to usage of data, knowledge transfer and historically grown structures. The goal was to build up a scalable business which allows us to be more innovative and flexible, but at the same time to create a workplace which everyone enjoys working in.”
As a result of the impact of COVID-19, Gaida is relieved that his organisation began its digital transformation journey three years prior to the pandemic. “COVID-19 meant companies had to transform operations almost overnight, but this wasn’t completely the case for us,” says Gaida. “Apart from our transformation, we also went through a cultural transformation which included experiments with new work elements such as remote working and transformational leadership approach to enable our teams to drive projects and make decisions on their own. At the end of the day, going from office to remote working wasn’t as hard as it might have been because we prepared so well.”
Gesthuysen believes that strategic partnerships are a vital part of his company’s global CNC strategy. “Trust and regular communication are key when it comes to a long-term partnership,” he says. “Some of the world's leading machine tool manufacturers, such as INDEX-Traub, Citizen Machinery and Mazak have been using our CNC technology for more than 40 years. We don’t just deliver our components, but rather develop and customise our technology according to their requirements. For some customers, our R&D department in our main factory, Nagoya Works in Japan is arranging daily meetings with them in order to harmonise and discuss the current status on a global level.”
With the future in mind, Gesthuysen has a vision of what he believes the industry could look like in the coming years. “In the age of Industry 4.0, consistent networking, data analysis, robotics and 3D printing are some of the new trends that are redefining the manufacturing space,” he says. “These technology trends are already paving the way for Supply Chain 4.0 and transforming manufacturing facilities into agile and intelligent manufacturing services that are fully automated, environmentally friendly, self-learning and able to flexibly identify and avoid delivery problems in advance. In addition, the concept is to function globally, sustainably, and cost-optimised to be wirelessly integrated with the supply chain network via powerful communication technology such as 5G.”
NTT DATA Services, Remodelling Supply Chains for Resilience
Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.
The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.
A Multi-Vendor Sourcing Approach
“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.
“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.
But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?
“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.
Wielding Big Tech for Better Outcomes
So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry.
“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality.
“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”
Evolving Procurement Models
From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view.
“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.
“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”
“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”
But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?
“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.
These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.
On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.
Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”
He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”
As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”