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Ops 4.0—The Human Factor: Keeping the customer at the center

Amid the turbulence of technological change, don’t forget Rule Number One: value is defined by the needs of the customer.
Markus Hammer

Has a passion for capability building with deep expertise in lean and green operations and the use of advanced analytics in operations; experienced in successful large-scale operations-transformation programs

Previous articles in this series have discussed the impact of Ops 4.0 on the people inside your organization. In this piece, I want to look at an equally important group of people outside the organization: your customers. An organization creates value by understanding the needs of its customers, then fulfilling those needs as efficiently as possible. Just like many successful transformation efforts of the past, Ops 4.0 transformations can improve both sides of this equation.

The recent experience of a petrochemical chemical company illustrates what the combination of Ops 4.0 and the right human support can achieve. It’s more than just making a process more efficient: it’s creating a better experience for customers, and in the process creating a more profitable operation.

When the B2B customers of the company were reporting low levels of satisfaction, applying Operations 4.0 technologies across the value chain in an integrated approach yielded significant improvement.

The company was experiencing numerous challenges. Each function operated in its own silo. Extremely complex processes proved difficult for customers to navigate and compounded delays. The entire structure raised costs, resulting in a cash-constrained environment.

How to address these issues? It took an onsite, cross-functional team to understand the problems, starting with the ordering system. Crucially, the starting point was the customer’s perspective, with a view to ensuring that every step in the process would help the customer achieve their goal.

Developers, user-experience designers, customer-experience and supply-chain experts, data scientists, and IT architects—all with a raft of 4.0 technologies at their fingertips—came together to completely redesign the ordering system. The resulting structure uses predictive algorithms to optimize the process across production planning and scheduling. By removing silos and functional titles, the team created a seamless method of placing and tracking, achieving the simplicity and transparency that customers wanted.

The initial aim of the process redesign was to raise customer satisfaction numbers, which it did—satisfaction rose by 20 points on a 100-point scale. But that wasn’t all. The automation and simplification of processes reduced delays by 15 percent. And, most significantly, using advanced analytics to improve production planning raised overall margins by more than 2 percentage points.

In an Ops 4.0 transformation, three distinct sets of human skills each play a role. First, there are traditional (or “analog”) human capabilities, such as leadership, communication, problem solving, cross-functional collaboration and the ability to interact effectively with customers. Second, there are “digital” capabilities, such as a data-literacy and familiarity with state-of-the-art digital technologies. Third, there is domain-specific knowledge, which includes an understanding of the value at stake, the potential business impact of new approaches and the opportunities available to apply them within a specific industry, business or function.

As this case shows, all three types of capabilities are essential for success. The technologies were an important part of the story. But what really mattered was the human insight, which deployed those technologies in the most effective way possible.

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