Culture is the square root of industrial progress

A formula for measuring industry 4.0 transformations

It’s no secret that IMIG AI provides assessments for Industry 4.0 and that we excel in this field, however, is there logic behind our methodology and what does it all mean?

We rate businesses using our risk-based scoring system that has hundreds of assessment criteria we use to build an overall picture of how prepared a manufacturing business is for the future. It allows us to produce an overall score from A to G (A being the highest) that is an average of the 9 individual grades on our assessment grid (see the picture below).

It’s like an Energy Performance Certificate (EPC) that you are obliged to purchase when selling your home in the UK. It’s a guide as to which areas of your business would benefit from improvement thus increasing your overall score. It’s extremely useful to understand where you are performing well and where you need to invest. It’s also a good indicator if you are trying to sell your business as the result is easy to understand.

Sticking with the EPC rating analogy, unless you are building a new house from scratch, it's unlikely you will get an A rating unless you design a "passive house". Our experience tells us that if you get a B rating, you are doing well. Most likely, a C or D will suit you well.

Why do we need a formula?

This article is not meant to go into the detail behind out methodology but give an insight into the thinking behind it and why culture is so important.

We assess using three main drivers of culture, systems and infrastructure divided by people, machines and data. The technical elements are fairly well understood: Infrastructure, systems, machines - from my perspective, that’s the easy part: You can readily buy this and you will most likely know what’s broken and needs fixing or upgrading because stuff just won’t work properly, otherwise.

The other drivers of culture, people and data are more difficult to quantify. It’s at this point that a formula might help. Now, I am neither a mathematician nor a scientist however, the intent behind this is to summarise what would otherwise be a complicated word-salad into something much easier to define and express (nice word-salad to explain this). So, the purpose is to simplify and that’s what the formula, below, is designed to do (I’m just waiting for the real scientists to tell me why it can never work this way).

There are three elements to this:

Culture is the square root of everything

That just makes sense. You need the right culture within an organisation in order to transform and culture represents many things: People aptitude, skills, training, environmental, social and governance and above all, the right leadership. It is the square root of everything because without this, it will be like pushing a rock up a hill or swimming in treacle. It’s why we have culture as the top axis in all our Industry 4.0 assessments that we do. You may be interested to read why we think Smart manufacturing is best served as a layer cake designed to maximise cultural change.

So, if culture is the square root of transformation, what else could go into a formula?

Power to the people

There are those that are terrified of AI and what it represents. There are others that understand it is significant but don’t understand its application. It reminds me of the emergence of the Internet before the Millennium (yes, I’m that old) and how we all knew it was important but weren’t really sure of how it would change things.

The best use case and definition of AI in an Industry 4.0 context that I have come up with (I’m taking ownership of this) is as follows:

“Industry 4.0 is the transformation of inefficient tooling and processes into a connected and artificially intelligent suite of appliances that do the things humans are not designed to do” - Owen Tribe

AI will do the things that humans are not designed to do. In that context, we have people to the power of AI because it does the heavy and repetitive lifting for them and therefore makes them more efficient.

Information overload

The last element is the sheer volume of interactions between systems and the data that represents: Data multiplied by interactions. Systems and infrastructure are implicit in this statement which is why they are left out of the equation. Put simply, the more machines, systems and infrastructure you link together, the more data you will capture. If data is the lifeblood of a modern business, it need taming.

Putting it together

It’s the square root of how much your people, assisted by AI, can do divided by the volume of data points you can comfortably generate. Driven by your company culture. Can you measure any of this?

In short, yes. You can measure data and interactions. You can measure people-productivity before and after transformation using AI tools. You can measure your ESG. You can assess the before-and-after data points using an assessment framework such as the one we use in IMIG AI to rate your overall state.

I’ve tried to distill 30+ years of this into a formula and this article is designed to get you thinking: I hope it has. I would love to hear your thoughts on whether you think this would work for you and how we can work together to better refine this.