L’Oréal CIO and other manufacturing industry leaders urge attention to people and processes as companies use technology to integrate and innovate their way out of the recession.
HANNOVER, GERMANY — The promise that integrated technology will tie together shop floor, development, and enterprises will never materialize unless manufacturers make concurrent cultural and process changes.
That message resonated this week at Manufacturing Executive magazine’s Manufacturing Executive Leadership Forum here at the Hannover Fair, where top decision makers from L’Oréal, race car specialist McLaren Electronic Systems, and “lean” prize-winning German-Japanese joint venture Freudenberg-NOK articulated their visions and strategies for excellence. Analysts from CIMdata, Cambashi, Manufacturing Insights, and others also weighed in with intermittently contentious and harmonic insights on what works in the pursuit of excellence and what does not.
But almost everyone agreed that the most sophisticated technologies for integrating automation, PLM, ERP, and MES systems will flop if companies don’t make requisite organizational changes — which often come with considerable pain.
“Don’t start any such project without a bodyguard,” quipped Jacques Playe, CIO of operations for French cosmetics powerhouse L’Oréal, during one of the featured presentations at the three-day event. Playe has been leading a massive technology integration project that ties SAP ERP software into Apriso MES software on the factory floor, across factories in Europe and the Americas that churn out brands including Garnier, Giorgio Armani, Lancôme, Matrix, Redkin, and Ralph Lauren.
“Cultural issues are clearly the big impediment to any integration project,” said Julie Fraser, president of research firm Cambashi Inc., the U.S. operation of Cambridge, England-based Cambashi Ltd.
In a related twist, McLaren Electronic Systems Managing Director Peter von Manen said that one trick to innovating successfully is to know when to avoid innovative practices. “You also have to know when it’s the right time to be conservative,” he said during one of MELF’s “fireside chats.” Von Manen seems to know when to hit the brakes; earlier this week, McLaren won the U.K.’s prestigious Queen’s Award for Enterprise in Innovation.
Ed Miller, president of research firm CIMdata, noted in a keynote presentation, “Innovating Out of a Bad Economy,” that as companies think about innovation, they should be first thinking about new processes. While very few companies can realistically expect to create “category killer” products, he said, they can refresh their organizational processes in a creative manner.
That’s what L’Oréal has done in its quest to make products, like shampoo, of exactly the same quality whether a plant is in Europe, Brazil, or North America. But a variety of cultural issues, including convincing factory managers in Germany and Italy to abide by the same practices and to alter processes, have thrown up hurdles that Playe and L’Oréal have crossed.
“It’s very difficult for a French and Latin company like L’Oréal to be sure everybody is aligned in the same methodology and the same core system,” Playe said. “The bigger part of the project wasn’t architecture or machinery; it was around change management,” he added. “You have to fight with some plant managers, some technical directors, some country directors.”
He also advised manufacturers to put a high-level executive sponsor — Playe’s “bodyguard” — behind broad integration projects. At L’Oréal, Executive Vice President of Operations Jean-Philippe Blanpain backed Playe in the integration project. In an unusual cultural twist, Blanpain plucked Playe from the ranks of plant manager to become CIO in charge of the project, even though Playe did not have a technology background. Blanpain “was convinced that in order to lead an IT organization, we don’t need an IT guy, because IT is only processes and you have to know the business process in order to put them in the system.”