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Baldrige/MEP Help Manufacturers Implement Industry 4.0 Concepts

“Digital transformation—often informally referred to as Industry 4.0 —. . . is and will continue to redefine the standards of competitiveness, performance and, further, the minimal ability [of U.S. manufacturers] to participate in the market,” said Phil Centonze, managing partner, POS-IMPACT LLC (formerly director of performance assessment at FloridaMakes, the Manufacturing Extension Partnership (MEP) business management consulting center that serves organizations in the state of Florida).

Therefore, the changing of the U.S. market requires “a rapid, yet disciplined, approach to integrate [advanced] technologies into core processes as the new threshold for competitiveness,” he added.

So how can U.S. manufacturers ensure that they have the systems and processes in place to implement the latest advanced technologies? That is where the Baldrige Performance Excellence Program and its Baldrige Excellence Framework come in.

As Centonze noted, the Baldrige Program was created “to enhance the competitiveness of U.S. businesses, particularly concentrated on quality products and services. Many manufacturers and other businesses adopted the Baldrige framework with that focus on quality . . . and global competitiveness. . . . Improved quality . . . is today the price of admission in the marketplace.”

Such thinking led Centonze and FloridaMakes to team up with IMEC (formally known as the Illinois Manufacturing Excellence Center), as well as the Baldrige-based Florida Alliance for Performance Excellence Program The Sterling Council, the national MEP program, and the national Baldrige Program.

Supported by a September 2020 grant from the national MEP program, a project team led by Centonze was assembled to develop an assessment and other tools that used the Baldrige framework as the foundation to help U.S. manufacturers integrate the concepts of Industry 4.0—that is, the integration of new technologies (including the Internet of Things, cloud computing and analytics, and artificial intelligence and machine learning) into manufacturing production facilities and operations.

“Using the Baldrige framework for improving quality of operations has the potential to improve the effectiveness of the manufacturers’ implementation of Industry 4.0 technologies,” Centonze said. “The expected outcomes include renewing manufacturers’ interest in the journey along the Baldrige maturity path and to assist MEP practitioners in engaging manufacturers on a transformative path to long-term sustainability and growth."

Collaboration of Baldrige and MEP

The basic concept of the project was to develop a Baldrige-based assessment for manufacturers that would help them understand their preparedness for and adoption of advanced manufacturing technologies, said Baldrige Program Director Robert Fangmeyer. “It is widely understood that advanced technologies . . . are transforming manufacturing, and it is a challenge for small- and medium-sized manufacturers in particular to keep up, to know which technologies might benefit them the most, and how to even get started,” he added.

As Centonze stated, “The Baldrige approach provided a perspective on organizational and operational prerequisites in order for manufacturers to adopt and effectively use advanced manufacturing technologies. Using the Baldrige framework in this way recognizes the needs of manufacturers to understand organizational, structural, and cultural issues and obstacles hindering optimal implementation of advanced manufacturing technologies.”

With a shared purpose, the project team set out with two main goals:

  1. Help manufacturers understand the relevance of and renew their interest in the Baldrige framework to improve competitiveness
  2. Help manufacturers understand how high performance facilitates effective implementation of advanced manufacturing technologies

Another priority, according to Centonze, was to create jobs or train newly hired employees, which is implicit in business improvement, growth, and competitiveness. A third indirect priority was to promote the transfer and commercialization of research and technology from institutions of higher education, national laboratories or other federally funded research programs, and nonprofit research institutes.

“It goes without saying that technology resourced from those institutions eventually may find a commercial home in manufacturing, especially as demand from manufacturers—partially generated by this project—increases [and] their receptiveness and need for advanced technologies grows,” he said.

Assessment Process and Tools

Manufacturers’ diversity in size, culture, industry, organizational level of maturity and other factors led to the development of a two-phase approach to the assessment.

In stage 1, manufacturers completed a Baldrige Organizational Profile to give the MEP center and the manufacturer a clearer understanding of its environment/competitive situation (i.e., structural readiness). This assessment asked about some of the more basic processes/practices that every business should have in place to survive and be minimally successful.

According to Fangmeyer, there was little if any focus on advanced technologies in stage 1 because it doesn't make sense to automate poor processes or build on a weak foundation. The results of that assessment were used to determine priority needs for the organization and if moving on to stage 2 made sense.

In stage 2, the focus shifted to assessing company leadership and employee mindset to accepting adoption of advanced manufacturing technologies for success. This stage was more of a facilitated assessment/consultative engagement, in which MEP practitioners met with the organization's key leaders to work through what might be best for them, determine how to get started, and ensure that the workforce is prepared.

During a 15-month period and using team-based idea generation, the project team developed and conducted assessments of 92 manufacturers in Florida and Illinois. Practitioners from IMEC and FloridaMakes conducted team-based feedback sessions (in most cases, virtually or in a hybrid fashion) in individual or group sessions. The assessments led to projects such as recommendations to improve strategic planning processes and include consideration of technologies, and to standardize and make consistent other business processes, as well to adopt Industry 4.0 technologies.

Tools Available

The team developed several tools for manufacturers who may be uncertain whether they are ready from a quality, strategy, or operational perspective to adopt technology. These tools may be valuable for MEP centers, manufacturers, and others interested in a Baldrige-based Industry 4.0 assessment.

Tools include the Foundations for a Successful Business, a Baldrige publication to make it easier for organizations to embed the systems/processes for successful implementation of advanced technology.

This publication, along with its series of interactive modules, is intended as a stepping-stone toward the Baldrige model for embedding high-performance behaviors and characteristics (the Baldrige Excellence Framework) that can facilitate competitiveness. 

Foundations for a Successful Business describes organizational success in seven fundamental areas that apply to any corporation, nonprofit, government, or academic institution. It provides a “golden thread” that ties various parts together into a coordinated system. 

What’s Next?

According to Centonze and his team, “Manufacturers may want to prepare structurally, operationally, and attitudinally to bring on advanced technology. Such changes would improve, lay the groundwork, for successful implementation.” However, the assessment can also be used in other sectors by any organization contemplating the implementation of advanced technology.

The team suggests the following next steps:

  • Working with organizations not truly ready for effective implementation of technologies because they haven’t yet embedded (1) a comprehensive strategy and roadmap of technology adoption and (2) standardized and consistent processes
  • Sharing best practices
  • Encouraging manufacturers to also work with their state Baldrige-based programs (the Alliance for Performance Excellence) to expand on their improvement efforts (especially in terms of standardized and consistent processes) and ultimately strive for excellence

Said Centonze, “We recognized that the application of the Baldrige framework is [needed] to spotlight 21st-century, role-model business and emphasize best practices, including effective implementation of advanced digital technologies. This is urgent to influence the current and future success of American manufacturers, as well as organizations across all sectors. The Baldrige model has successfully led American enterprise toward achieving the highest standards of quality when our industries lacked the awareness and, more importantly, the culture of performance excellence through quality management. It is no different now relative to Industry 4.0.”