Taming a Black Swan

It appears without warning, typically at the least convenient of times. It turns expectations upside down and renders carefully planned business strategies obsolete. But does the fabled “black swan” need to be a purely negative phenomenon, or can it spur change and innovation?

The term “Black Swan” itself was originally popularized by the essayist and scholar Nassim Nicholas Taleb, who defined it as follows: “First, it is an outlier, as it lies outside the realm of regular expectations because nothing in the past can convincingly point to its possibility. Second, it carries an extreme ‘impact.’ Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.“ 

States of crisis are an inescapable part of life, and therefore a part of doing business. It’s unreasonable to expect organizations to be able to predict events such as the 1929 or 1987 stock market crashes or the terrorist attacks of September 11, 2001. However, smart organizations can turn moments of crisis into moments of opportunity by planning for the unseen and embracing new technologies.

Industry challenges and potential answers

Most of the manufacturing world is still coming to grips with the impact that the current economic downturn will have on their business. That’s not surprising when you consider that the crisis has spared no aspect of manufacturing – from supply chains to sales and compliance and everything in between, it’s all under threat. 

Most major players are responding predictably, by putting all non-essential projects and expenditures on hold in order to preserve as much liquidity as possible. Another, more sustainable way of coping has been to perform as much work as possible remotely, shifting workshops, testing, and go-live support activities that are typically done on-site. Accordingly, solutions that make remote work easier are seeing huge leaps in popularity. 

What would an all-encompassing solution for remote work actually look like? In a large industrial plant, one missed day of production can cost tens of millions of dollars, a hit to the pocketbook that no business can sustain for very long. Any remote-working solution, therefore, needs to include two critical factors – system flexibility and reaction speed. A solid example is Andea’s creation of the Manufacturo COVID-19 application as a response to the current pandemic and accompanying crisis. 

Created in just a few days and made available to clients after just 2 weeks, the application was relatively simple to roll out from a technical perspective – the majority of the effort went into regulating legal issues, as the personal data needed for the application to function falls under the umbrella of the GDPR. The wait time was put to good use preparing and training support staff, guaranteeing seamless rollout and adoption once the app was made available.

The way of the future

It’s never been easy to maintain common processes across many sites with different infrastructures. Processes, therefore, have needed to be flexible and adaptable to local conditions. Shop floor systems have typically provided some generic visibility and control over manufacturing processes, but local teams have been largely responsible for generating the majority of performance and quality gains using their experience and self-initiative. This has resulted in a significant dependency on a limited pool of knowledgeable on-site resources. The current situation will likely force manufacturers to accelerate their search for better, more efficient, and safer ways of working.

That, in turn, will mean reduced reliance on humans and the introduction of remote diagnostic and management tools that can be easily used in a typical factory. It’s also going to mean greater adoption of AI in order to document expertise digitally. Autonomous maintenance is a great example of how AI can revolutionize plant maintenance. An AI-based system can track failed or successful improvements or machine downtime and use this knowledge to guide human employees in troubleshooting.

Another example of what the future might hold is AI-driven and cloud-based monitoring solutions that harness the notion of machine learning to collect massive amounts of manufacturing data and analyze it rapidly to find specific patterns or exceptions. Machine learning makes it possible to generate immediate notifications and detailed insight about how to improve performance, reduce waste, and drive down costs. It’s a real opportunity for software to take a new role in initiating and controlling improvements, which means that a company’s experienced specialists can spend less time on basic data analytics, instead focusing on product and process improvements.

In conclusion

The “new normal” will stay with us for the next few years, but we can be reasonably sure that many of the new technologies being developed to cope with the current crisis will be with us for the next few decades, and the best of them will have a positive long-term impact. Just as strong species adapt in nature, strong companies that adopt new ideas and solutions will strengthen their position in the market. This crisis may provide exactly the impetus that legacy-minded organizations need in order to make long-overdue changes. If this happens, we need not fear the Black Swan – the age we live in will be remembered as a time of hope and positive change rather than an era of chaos and crisis.

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