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WHEN THINGS GO WRONG

19 November, 2019

Being a pioneer in an area such as smart factories and digitalisation can have major benefits for those organisations prepared to take the risk – and invest the money. It can help to boost a company’s reputation as a technology leader and, provided that the project works as intended, it can deliver commercial advantages over rivals who are being more cautious (or spendthrift) in their approach to cutting-edge technologies.

But if things don’t work out as planned or hoped, the results can be embarrassing and potentially costly. Take, for example, the shoe giant, Adidas. In 2017, it announced, with a great fanfare, that it was setting up factories in Germany and the US that would use robots, 3D printing and other advanced automation technologies to create athletic footwear tailored to the needs of individual customers. Its Speedfactory production lines would allow the company to deliver bespoke shoes to local customers “with unprecedented speed”. It could create personalised shoes in a day rather than waiting months for them to be made in Asia.

Adidas’ global creative director, Paul Gaudio, was quoted at the time as saying that the Speedfactory concept would allow the company “to co-create unique product solutions based on individual athlete needs and desires – delivering what they want, when and where they want it”. It “represents the future of manufacturing,” he added.

Two years on and the picture is rather different. Adidas announced earlier this month that production at its German and US Speedfactories will end by next April. The shoe-maker did not go into detail about the reasons for its decision – or what the project had cost. It did add, however, that some of the advanced technologies will be transferred to manufacturing plants operated by its suppliers in Asia, where more than 90% of its shoes are manufactured.

Adidas is not alone in finding that cutting-edge manufacturing projects do not always go to plan. As we report in our News pages, a global survey of manufacturers by Capgemini has revealed that nearly 60% of companies who have embarked on smart factory projects report that they are struggling, or say that it is too early to comment on the success of their initiatives. A mere 14% regard their smart factory developments to date as being a success.

The manufacturers also say that the KPIs (key performance indicators) they are achieving with their advanced technologies are significantly lower than those they were hoping for. They had, on average, aimed to achieve improvements in productivity and market share of around 34–36%. In reality, they are achieving 12–13%.

Capgemini attributes these results, in part, to the difficulty of achieving suitable operational scales. “So far, no technology or platform has been completely adopted in the majority of production lines,” it reports. The result is that early adopters have not been able to progress as fast as they would like.

Hopefully, these results will not deter other manufacturers from embarking on the digital journey. As knowledge and technologies improve, the real benefits of digitalisation should start to emerge for more users. If it were not for organisations that are prepared to take the risks of being pioneers, technological progress would be much slower.

 

Tony Sacks, Editor

 




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