It has been a while since I had someone on the podcast talking smart factories, so I reached out to James Crean, Co-Founder, and CTO of Crean Inc, a company dedicated to smart factory transformation services.
We had a great conversation spanning minimising the pandemic's effects, tying operational efficiency to sustainability, and the growing tendency to reshoring. I learned loads, I hope you do too...
If you have any comments/suggestions or questions for the podcast - feel free to leave me a voice message over on my SpeakPipe page or just send it to me as a direct message on Twitter/LinkedIn. Audio messages will get played (unless you specifically ask me not to).
If you want to learn more about how to juggle sustainability and efficiency mandates while recovering from pandemic-induced disruptions, meeting growth targets, and preparing for an uncertain future, check out our Oxford Economics research report here.
And if you want to read up on our Industry 4.0 blueprint repost, head on over to https://www.sap.com/cmp/dg/intro-industry40/index.html, and if you liked this show, please don't forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.
And remember, stay healthy, stay safe, stay sane!
And as a result, they were always on time. You know, they went from that supplier that they were supplier to, you know some of the major aerospace companies and they were known as always being late and they became known as always being on time after that. They had no supply chain issues.Tom Raftery:
Good morning, good afternoon, or good evening wherever you are in the world. This is the digital supply chain podcast, the number one podcast focusing on the digitization of supply chain. And I'm your host, global Vice President at SAP. Tom Raftery. Hi, everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP. And with me on the show today I have my special guest, James. James, would you like to introduce yourself?James Crean:
Sure, Tom. Great to have you James crane. I'm the president and CTO of crane Inc, and co founder. And it's pleasure to be here.Tom Raftery:
Fantastic. James, what does green ink do?James Crean:
We provide services to small to medium sized businesses, as well as fortune 100 companies in a variety of areas. We help with product development, we have a team of 600 engineers that specialize in basically the gamut of engineering as well as production operations, efficiency and smart factory transformations.Tom Raftery:
Okay, who would be typical customers, ourJames Crean:
customers range from startups to large aerospace companies, like all the major aerospace companies like Boeing and Northrop and whatnot, but we also work with mid sized companies and, and we have a few startups that we're actually working with so. So the support that we give varies from specific engineering support, to helping companies to reassure their production operations and or improve the efficiency of their operations, you know, or just help them to, to be more responsive to their markets, in how they design deliver, and produce and deliver their product.Tom Raftery:
Okay, okay. We're in a kind of a funny time right now. I mean, middle of the pandemic, supply chains globally seem to be in all kinds of trouble. Brexit has caused massive problems on this side of the water for the UK, for example, huge shortages. And the US, you seem to have a lot of issues with your ports and shipping in particular, with lots of cargo ships of to two coasts of both coasts getting, you know, big backlogs trying to get into ports and things. How, how can companies What are you advising your companies to, you know, try and not get too bogged down with this mess that we're in?James Crean:
Yeah, and it's, it's quite a mess. Like you say, it's a global issue. And and it's interesting, because we've been working with companies to help them with their suppliers for a long time, right long before, you know, anybody heard the name COVID are really worried about supply chain. And they weren't? Yes, exactly.Tom Raftery:
Nobody knew that.James Crean:
Nobody's ever Yes. Right. Nobody's ever considered their supply chain? Right? So yeah, you know, the thing is, is that what we, you know, one of the things that we focus on with that may not be as obvious, right, there's the obvious solutions of, you know, of having a more integrated supply chain having more, you know, options and, and local suppliers, and those and those are, you know, those are all good solutions, right? Those are all good things that that need to be considered by any company to reduce their supply chain risk. But one of the things that we actually have done that has been significantly helpful for our clients is, is we speed up their production operations, right? So to give you an example, we had a, you know, a high end product development development company that, you know, they had pretty long cycle times, they were six months, you know, cycle times from when they kidded parts to the floor, to when they were delivering those products to their customer. And they were often challenged by late suppliers, and some of those players would be three or four months late again. So you know, it's pretty hard to deliver on time when you're soon your standard cycle time is six months, and you don't get your parts until four months into that production window, right? Well, we worked with them and and went through a transformation of their production operations and got their cycle time down to 15 days, right? So only three weeks.Tom Raftery:
So from six months down to 15 days.James Crean:
Correct. Wow. And that's, you know, that's the kind of transformation that's As a business, right, and as a result, they were always on time, you know, they went from that supplier that they were supplier to, you know, some of the major aerospace companies and they were known as always being late, then they became known as always being on time after that, they had no supply chain issues there, they still tried to get those, you know, those units earlier, and, but when they were late, they were still able to deliver on time, they were still meeting their customer demand and delivery dates. And, and so, you know, that's kind of an extreme example. But, you know, it's really just as relevant for companies with, you know, with tighter supply chains, and, you know, if you can deliver faster than your customers than your competitors can deliver, and they're having the same supply chain issues that you are, when those when those you know, items come in, and you're able to actually get them to your customer, and, and meet their dates. That's, that's a significant competitive advantage. So a lot of what we do we focus on speed, right. So by focusing on speed, you get much more flexibility within your operations. So that's kind of a maybe a little bit less obvious approach to addressing some of the risks that we're seeing that almost every company is experiencing on supply chain today.Tom Raftery:
And what kind of measures Did you undertake to get that six months down to 15 days, I mean, I know some of it will be specific to that particular company, but there's got to be some learnings that, you know, other organizations could take away from it. So for us,James Crean:
it's, it's a variety of, it's a variety of things. So we use a lot of methodologies that, that are built on top of what I would say foundational, or, you know, items, or, or methodologies like Lean Six Sigma Theory of Constraints that every company should be familiar with, and implement. But, you know, honestly, there are a lot of methodologies available today that go well beyond that, we sort of look at Lean Six Sigma Theory of Constraints as, as sort of the the entry level, you know, math, if you will, right? It's addition, subtraction, algebra, that kind of thing. But there's methodologies that today that you know, that we consider more like calculus, right, that integrate just sort of smart, smart factory methods. And when I say smart factory methods, I'm talking about people process and technology, most people think that that's means automation. You know, in that particular example, we didn't implement any automation, and we were still able to achieve those kinds of improvements. Once you're looking at our advanced methodologies for dealing with all of the variation that happens in the factory floor, and it's, it's probably a little bit too much to get into, and, you know, in a, you know, 30 minute podcast, but, you know, suffice it to say, there are there are new methods, we've been, you know, we come out of the aerospace industry. And so, we're really comfortable with complex production environments. You know, whether that complexity comes from complex products, or whether complexity comes from a lot of variability that happens with maybe much, much simpler products to produce. And we use complexity, you know, to our advantage in the production environment, we don't subscribe to the 8020 rule of, well, let's eliminate 80% of the complexity and focus on the 20%, that's going to make us the most money, because a lot of times the complexity that you're eliminating, that's the high margin business, that actually gives you your advantage in the marketplace. And so now it may be that you want to think about how you price it, maybe understand your your costs better, and what are the inputs so that you can, you can make those 80% items just as profitable as those 20% items that that you might otherwise be focused on. So we're really using the complexity in the production environment to our advantage. And then ultimately, the goal here, Tom is simplicity, right? And simplicity, the way I define simplicity, simplicity is the art of making the complex seem easy, right? And so it's not that you're trying to make things easy, it's that you're making things simple. And I'll give you an example. Most people are familiar with iPhones, right? Yeah, I use my my iPhone to you know, give me directions on how to get places I've never been to before. Sure. Well, pretty simple to use, right? You plug in the address and it tells you the directions and since pretty cool, simple. Is it easy? Not at all. Right, that's an integration of a very complex computer that you're holding in your hand databases of, of every street in the in the world and associated information. It integrates with a global satellite GPS and other systems that are providing, you know, location accuracy down to, you know, feet, where you are, I mean that the complexity of that system to be able to make it so simple as is, is really pretty phenomenal. When you think about it, right? It's simpleTom Raftery:
enough that I can use it.James Crean:
And me too. And so that's the key is, is delivering simplicity. So that's what we focus on for, for, you know, whether it's an operator on the floor, or whether it's the CFO or a program manager, Project Lead supervisor, or what have you, what we're focused on is how do we deliver the simplicity that this person needs to be able to interact with the system of production, so that they can, they can do their job incredibly efficiently, effectively. And, you know, in the same way that I can get anywhere, you know, anywhere in the country, you know, very simply, we do the same thing on the factory floor? If that's a long winded answer, but, but it's, you know, it's, uh, you know, I mean, production operations are complex, right? There's very few that you can say, Oh, this is really easy to do. That's the things that are easy, they're probably rewarding it to my definition, they're more simple, somebody has spent a lot of time to make it look easy, but it's really, it's complex. And so we're real comfortable in the world of complex because most of our folks come out in the world of engineer of aerospace engineering. So we thrive in a complex environment, and we use that to our advantage to to create simplicity for for everybody in that production operation, or, or engineering operation, for that matter. So,Tom Raftery:
so you guys are literally rocket scientists.James Crean:
There are some of us, yes. That's the background, right? I mean, you know, Space Systems and, and launch systems as well as aviation. But what we did was, when we started solving these problems for for these really complex environments, we realized that, hey, you know, what, this applies just as well to, you know, I mean, we have customers that are building products, manufacturers that are making 1000s, or millions actually have items that you buy at Home Depot, and, you know, these kinds of things, tools, and, and, and whatnot, and customers that we have industrial art customers that produce art at an industrial level, I mean, so the thing is, is all of these guys have these, these complex problems that they're trying to solve, and they're, they get stuck trying to grow their business, right, they've gotten to a limit. And, you know, most of our clients are profitable, they're successful, but they're realizing, I'm stuck, I can't get further, for one reason or another. And so by creating simplicity, we create efficiency, and we create effective, you know, more effective production operations, and allows them typically, our typical client will be, you know, will be able to double their production, their production, you know, after our initial engagement with them. So that's what, that's the kind of thing that we're shooting for. Okay, andTom Raftery:
what about efficiency gains? And any any kind of sustainability wins that come out of that?James Crean:
Yes, yeah, absolutely. So we look at sustainability in two different ways, right. So one is the sustainability of the business. And so the example that I gave you earlier, in the process of reducing their cycle time, from six months to three weeks, we also cut the labor content for those products from without any automation mind you from having five people on two shifts for six months, to having three people on one shift for three weeks to produce the same product. So overall, when you look at the overall cost of of the labor cost per unit, we improve their productivity by a factor of 10. So when you do that, for a company are creating, you know, amazing flexibility or creating financial flexibility or you're allowing them to invest in their future, while at the same time making more money. There's nothing wrong with you know, making more money and being profitable, right. But you know, we also are not, you know, what, what we did for them was we created an opportunity for those people that were working on that product line to go and work on a new product line. They were that they had one and they, they weren't sure how they were going to staff it because they needed, you know, experienced qualified people to do it. But we freed up those people to be able to go and do that nobody lost their job. In fact, they were hiring more, at the same time, because the company was growing and sustainable. At the same time, when you take the inputs that you have into products, and you use those same inputs to double or triple the productivity of a plant, there's a, there's a green sustainability aspect to that, right. So we're not just improving the efficiency of the people, but we're also improving the efficiency of all the machinery, how long do the lights need to be on in that factory, how much you know, the air conditioning, every everything else. So if you can take a two shift operation and make it one shift, and, and double the productivity of the plant at the same time, well, that's a massive improvement from a, you know, from a carbon footprint perspective. And so, you know, so we always like for look at these, you know, multiple Win Win, win win, you know, and you can start lining up a lot of wins when you when you have that kind of flexibility. And in an operation to be able to, you know, produce environmental wins, as well as productivity wins, people wins, we had a client that we worked with that they had 100 people working in their plant, and they had been all working 60 hour weeks, 60 out, you know, 60 hours a week, for the last two years, right? When when we finished our engagement with them, was a short engagement was about six weeks. But they went from producing 18 units a day to producing over 40 units a day. Their Cycle Time went from 21 to 22 weeks down to between five and seven weeks, which is well below what their customer demanded cycle time, which was 12 weeks. And they went from having 100 people working 60 hour weeks to only two people working 60 hour weeks. And so, you know, we sort of looked at that when we started talking to the people on floor. Because we always start by understanding how does, how does this whole system work? We can't, we can't change what we don't understand in detail. When we started talking to people, and these people have never seen their kids soccer games or football games, as you know, as the case may be. They you know, you know, for their kids on the weekends, they you know, their their lives were just work. Right? And that's not, you know, you're talking about sustainability that's not sustainable for people, right, but people side of things. Sure. So let's be we're all back to, you know, being with their families, the company was, you know, making a lot more money, they were able to do bonuses. You know, a lot of the companies we work with have profit sharing for the, for the folks on the floor. And so when you create, create profit for the company, you're creating, you know, you're you're giving back to the people on the factory floor as well. So those are the kinds of things that we focus on.Tom Raftery:
Sure. And just just to clarify, when you say they went from 60 people, sorry, 100 people doing 60 hour a week stem to two people doing 60 hour weeks, it's not that the other 98 or left goods that they went back to 40 hour weeks or something, Senator?James Crean:
Yes. Thank you for clarifying that. Yes, we had 98 people working 40 hour weeks. Exactly. And we had two people working 60 still they were and we were hiring to, to to get to more people actually into those those that operation, which, yeah, that, that operations just to kind of give you some insight into sort of how we look at things, you know, going back to, you know, constraints, we knew that that operation was a constraint, no matter what happened in that factory. And so we needed to make sure that resources were there to support it. But you know, oftentimes when you have a production environment with a lot of variability in it, the constraint can move depending on what product you're producing, as different products get released to the floor of the constraint can actually move. And that's part of that complexity that that we talked about. And that's part of the complexity solution that we develop for clients. So it's not always as simple as you know, here's where the constraint is and you know, your basic Theory of Constraints, going back to goldratt, and all that and so yeah, we nobody lost their job we don't we don't go in and help people get laid off. We go in and help people work for companies that that really appreciate them and and help them to be more efficient and effective at what they do and enjoy their their family time as well.Tom Raftery:
Cool. You mentioned at the start reshoring, as well, and we had a guest on the podcast a couple of weeks ago, Rosemary coats who helps companies do precisely that. But what are you seeing in that kind of space, the reshoring space?James Crean:
There's, well, here in the States, we have hundreds of companies that are that are either reshoring or looking to reassure and know, least that we're aware of 1000s probably, but, you know, it's an ongoing conversation, we have lots of companies that are coming to us, you know, asking us to help them. And it's, it's interesting, because you can you can look at this as, as is this a fad, a trend or a requirement? Right? And some people look at it and say, Well, you know, we have all these supply chain issues. And so bringing back, you know, your supply chain, or bringing back parts of your business just makes sense, because we don't know how long this COVID thing will last and, and whatnot, I consider that more of the fad, right? It's focused on the near term, short term kinds of solutions. But there's been a trend, moving manufacturing back, and certainly in the United States, we've been seeing much more of an increase in manufacturing here in the United States. And from our customer base, it's very clear, we have a lot of customers that are coming and saying, we have, you know, they either are completely moving their production back, onshore, or they already are split, doing some production offshore, some production on, you know, here, and there, they're bringing back more and more to local. And I think that there's market driven reasons for that, I think that the demand for shorter cycle times from order to delivering for a variety of reasons requires you to start thinking about, does that production make sense to be, you know, at a minimum of three weeks away from a, from a logistics linkage perspective? Or does it make sense for that production to be within, say, a day or two of where my customer is, or even less. And so I think there's market driven aspects, I think the, I think the efficiencies that are available to companies now, and and being able to produce products, much more efficiently, is only going to continue to increase. You know, like I say, we're sort of focused on people process and technology, there's an awful lot you can solve with just process. But when you start layering technology onto that, you know, the the operational efficiencies are enormous, we've developed a smart factory operating system that uses all of those complexities, that underseen helps us use the data to create information on what's going on. And for as far as those complexities on the factory floor, and produce, you know, insight and control in ways that really wasn't possible before. And in a lot of ways, you know, we can we've integrated AI algorithms into into that system, and to be able to just take that data, understand what's going on the production operation, and be able to provide either automated, you know, ai driven optimizations that the operations team doesn't even need to get involved in, or provide the, you know, information, right, converting data into actual usable information. That, again, going back to simplicity, here's what the data is telling us, here's this, here's the simple outcome of that, here's the information that you need so that you can make adjustments, ideally, proactively, before issues happen. We can see things that are coming down the pipeline, we can see where those issues will arise. And we can we can provide insight to operations leadership team, to be able to say, All right, here's what we're recommending. These are the things that you can do to change it. And then they can, they can evaluate that make the decisions. But that integration of people process and technology is where we find there's just a goldmine of opportunity. And when you can take that, take that information, and use it to create incredibly efficient production operations. That allows you to manufacturer anywhere in the world. You're not so tied to just what's my Labor Rate, the Labor Rate becomes much less of an issue because you're not you're not focused on being the well you're, you're you're focused on all the different ways that you can deliver value to your customer. And that value may be and how quickly you can go from an order to a delivering that value may be and the ability to customize a product that, that a customer wants. value may be in being able to deliver complexity in ways that wasn't possible before in your product. So there's that integration that can happen between engineering and production. That's really valuable in and and i think companies are recognizing that, that whole integrated solution, from idea through through innovation, through engineering, through product development, through prototyping, you know, through production, logistics, and integrating that whole solution. That's the future and integrated solutions, the future and, and it depends on the company and what the demands are for them from the marketplace. But there's a whole variety of market driven requirements that lead you to when you strategically look at your business. And so we've seen this with just so many of our clients, whether it's real simple products, or more complex products, they start to realize, Hmm, yeah, actually, I don't really care how much the container costs, I still want to produce this closer to my customer. And there's a whole variety of good reasons for doing that. So. So yeah, it's a it's a different world. And I think the I think the pandemic has caused people to say, oh, let me think about this differently. And then when they start thinking about it, and they open their mind to all the different benefits of reshoring production and bringing it close to the customer, they start seeing, yeah, I don't see this going back the other way, even if the pandemic related issues are solved. Because there's a second way you have to think about it as well, Tom, and that is, what if my customers doing or what if my competitor, rather, is doing this? Right. And, and, and they see the benefits, and they start delivering that value to, you know, to our, to our market? And I don't have that ability to do that, then, you know, there, that's where the real winners and losers are. Right? SoTom Raftery:
Jim's work coming towards the end of the podcast. Now, is there any question I have not asked that you wish I had, or any topics that we've not touched on that you think it's important for people to be aware of?James Crean:
But I'd like to maybe just elaborate a little bit on something that I touched on, which is that people process and technology integration, right? Sure. So many companies focus on the integration, technology side of integration, they think of smart factory as automation, they think that technology is going to solve whatever problems that they have. And I just want to emphasize that the real integration is between people process and technology. And that's, that's where, you know, sort of successful transformation happens, you know, this, the technology piece of it can be incredibly powerful. But so can the people in the process piece and, and when you integrate all three, it's a it's an unbeatable, it's an unbeatable thing. So I guess for me, that's sort of that, that in looking at your whole business from order to delivery, and that people process and technology solution and and honestly starting with the people in the process, and then putting the technology in that helps to, to enable your people to be successful, and create simplicity. That's, that's where sort of genius happens. And if you can, if you can do that with your business and and deliver that, that integrated people process and technology solution, then you know, you're nobody's going to compete with you. Right? You've that's that's to me is the is their Nirvana, you know, you'll probably never be 100% there. I don't claim that we make our clients 100% there on everything that we do with them. But it's that's where that sort of when we talk about continuous, you know, people talk about continuous improvement, we talk about continuous acceleration because we focus on accelerating the performance of the business. But that's where that continuous acceleration really is, is that thing is how do you get people the process and the technology all integrated and in the most effective way. So from product development, all the way through to, to production operations. So that's, that's why we have Have 600 engineers on our team and as well as a whole team of production operations specialists, because it's it's really designed for manufacturability comes into it, you know, integrated engineering solutions come into these things as an example, right, so we had a industrial customer come to us and, and we started talking to them about some operational issues that we can help them with. And they, and they brought up that they have an issue with paint, peeling, they were producing motors, and they have their color paint that they want their motors to have, and they're having issues with their motors paint peeling off. Right. Okay. Well, you know, as it turns out, you know, one of the engineers on our team is an unbelievable specialist in paint. When jet propulsion labs, you know, needed help in how what paint solution should we have for the Mars perseverance rover, they called our engineer and to help them out. So in an hour or two on the phone with the, with this particular client, he was able to give them the guidance that they needed, you know, to be able to solve that problem very quickly and easily. That's the value of kind of high end engineering support to what, you know, some people look at as mundane issues, but it's not a mundane issue to a company that's trying to, you know, make sure that, you know, their, their color paint is on their motor, and it's not peeling off, because that, that the motor may work beautifully, but when the paint is peeling, you have a branding issue at that point, it doesn't look right, right. So anyway, it's integrating all of it together. But, but it's not just technology, it's everything. So that's the challenge. And and I definitely, you know, wish everybody who's listening to this and and struggling with it, the best of luck. And I hope that what I've shared here helps them to think about it a little bit, you know, a little bit differently and helps them to get to a solution for what they're trying to accomplish faster. Live.Tom Raftery:
If people want to know more about yourself, James or about crean Inc, or any of the topics we discussed today, where would you have me direct them?James Crean:
Well, crane inc.com is our website c r e a n, I nc.com. So you certainly can go there. Or you can give us a call if you like, fly 123376587 here in the US. So happy to happy to help if anybody would would like to chat for a little bit. We can see if we can help them and if we if we can't, we'll let you know that too. SoTom Raftery:
cool. James has been great. Thanks a million for coming on the podcast today.James Crean:
Oh, thank you, Tom. It's been a pleasure. Truly. Okay, we'veTom Raftery:
come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, head on over to sa p.com slash digital supply chain or, or simply drop me an email to Tom email@example.com. If you'd like to show, please don't forget to subscribe to it and your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.