Quality and the Experience Economy

Over the past two decades consumers have been gravitating towards purchases that are of both high quality and provide an experience. Quality of a product or service alone is no longer a differentiator, quality of experience is. Consumers are buying what will not only satisfy a need, but will illicit an emotion or establish a connection.

How will this new economic structure affect the quality industry?

Babette Ten Haken

The Experience Economy, by Joe Pine and Jim Gilmore (1999, 2011), created the blueprint for how B2C (business-to-consumer) industries created customer experiences to build customer engagement, loyalty and marketshare.

Today, the Age of Mass Production is gone. Customers expect a company’s products and services to do more than remain “as good as the day I bought them.” Instead, customers make purchase decisions, expecting products and services to continuously become better and better over the duration of their life cycles. As a result, customers expect their own emotional experiences, interacting with their purchases, to become better and better.

The Experience Economy principles offer competitive advantages to the B2B (business-to-business) space, especially industry and manufacturing. However, this scenario sets up legacy cultural and methodological plate tectonics. Operations and Quality processes and mindset crash into Business processes and mindset. After all, Operations and Quality traditionally focus on issues and risk. Business traditionally focuses on possibilities and opportunities.

Can the two cultures not only co-exist within The Experience Economy industrial IoT ecosystem? Can they collaborate, cross-functionally, to create extraordinary and enduring customer outcomes and experiences?

Yes! Quality tools like design thinking and qualitative Voice of the Customer (VoC) methodologies have a tremendous impact on delivering product- and service-based designs which deliver remarkable customer experiences and catalyze customer retention. These insights give breadth and depth to periodic, quantitative customer experience survey results, conducted on the business side of the table.

However, to successfully deploy these tools and methodologies, Quality professionals must walk Quality talk across the organization, from the plant floor to the C-Suite. How does the Voice of Operations-based end-users relate to the Voice of Business-based decision makers? That is the Quality Challenge. Because once the dots are connected, organizations create a powerful, customized, experience-based blueprint for growth, expansion and sustainability.

John Hunter

It is very difficult to create great customer experiences if the management system doesn’t provide those interacting with customers the authority, tools, training and support to make decisions and continually improve the systems in place to deliver great customer experiences.

The management system must not only give people the authority to react to specific customer desires individually but must integrate continual improvement of the processes and systems to continually enhance the ability of the organization to delight – even in the face of ever greater customer expectations.

There is not a magic bullet solution to creating the capabilities to delight customers with the overall customer experience. It requires creating a management system that encourages that focus and supports acting based on those principles every day.

Luciana Paulise

Instead of spending a big budget on advertising, some companies decide to bet on free marketing by investing in their customer’s experience instead. For companies Like Johnny Cupcakes, Zappos or Delivering Happiness, their driver for growth has been repeating customers and word of mouth to actually get free advertising . Most of the money they would have spent on paid advertising like regular companies do, they invested it into customer service and the customer experience instead, letting customers do the marketing for them through word of mouth and relationships. They will recommend your brand to their friends, talk about you on their social networks, generate repetitive sales and sometimes even give you ideas for potential new products. Basically, customers become what I call “lovers” of your brand.

So what is a great experience? it is not just regular customer service. It is to take care of every detail in every contact with your customer, face to face, online or even on the phone. Tony Hsieh, founder of Zappo’s says that “If you get a 10 minutes interaction right, the customer remembers the experience for a very long time and tell his or her friends about it. You need to make sure that we use that opportunity to create a lasting memory”. So, the key is to focus on building engagement and trust, seeing every interaction through an experience of a long-life relationship lens instead of an expense-minimization lens.

This shift from buzz marketing to experience marketing can only be possible through a cultural transformation within the company. All the old habits of just minimizing cost need to shift towards customer centered habits.

Edwards Deming, proposed a cultural transformation in his last work, the System of Profound knowledge. This method shifts organization from “Me” to “we”. a “We ” organization means that departments work together, and make decisions considering the interactions they have with each other. As Deming puts it, we need to mind not only about doing “good parts” but also about “the gaps” between the parts. That is, your report can be done correctly, but if it doesn’t fit the needs of your customer, it may not be as good for him. We need the customer or the preparer to raise the voice to make a change in the process.

“We” thinking is crucial in an experience-based marketing, as everybody needs to be involved in getting the right interaction to the customer, everybody needs to be open to see how the company can do better and be part of it.

The cultural change needs to be lead by the head of the organizations by example (top-down) and specific principles, and provide the appropriate training of those principles to the employees to offer bottom-up solutions.

Chris Moustakas

Remember the first time you used Google Maps? Compared to the experience of Mapquest, it looked and felt like magic, and what was state of the art just the day before became obsolete overnight.

A wealth of open resources, plus a step change in what “good” looks like, has reset people’s expectations. At its core, “Quality of Experience” is a holistic definition. It used to be that a company could be judged by specific criteria – a widget’s reliability measures, for example – but those days are over. Today it’s not only that widget’s reliability that matters, but how and from where you source the raw materials, how responsive your support hotline is, even what your employees are saying about you on Glassdoor.

This change makes perfect sense in a world dominated by instant information and social media. It has nothing to do with producing a warm-and-fuzzy feeling, and everything to do with smart business. Your supplier may provide cost-effective, high-quality products, but if those products were developed in repressive environments, you expose yourself to the risk of social backlash (especially if you’re a bigger company). You don’t have to think for long to remember recent examples of this.

How can quality professional contribute positively to this new reality?

  • Use tools like NPS to gauge how your customers feel about you.
  • Apply metrics to qualitative measures (such as your NPS scores), and use those metrics to communicate management expectations.
  • Open your organization to suggestions from employees, who often have the best ideas, and track those with the same attention you would a corrective action.

The techniques are the same. The only thing that’s different is the larger scope – and with that larger scope, the opportunity to effect more meaningful change than ever before.

Luigi Sille

Nowadays customers are much more educated, they know exactly what they want. They read and do research (using internet) about the products they want. In an experience economy an external customer is referred to as a “guest”, and not just a customer.  A guest does not just buy a product, but he or she pays for the experience.

How will this shift to experience economy affect the quality industry, and what quality practices can be applied or adapted to ensure success in this new economic structure? The answer is simple: SERVICE

Companies should invest in training and development of their employees to:

  • Deliver better services
  • Communicate better
  • Handle and help solve complaints/problems… “Service Recovery”
  • Expand their knowledge
  • Work on team-building

Managers should:

  • Be more flexible
  • Brainstorm (with the team) for new ideas and possibilities (Creativity & Innovation are very hot topics in the quality industry)
  • Help / guide / advise the team
  • Quality of work-life is also important
  • Deal with conflicts, and never neglect them

We have to remember that Managers have to guide, control, and motivate employees (team members) so everyone will feel that they are part of the organization. We also have to measure, one way or another, the quality of service we are delivering. But measurement of Service quality is not an easy task. Compared to measuring tangible products, it’s difficult.

Aspects of service quality that can be measured:

  • Reliability: Deliver promised service in a consistent way
  • Tangibles: physical appearance
  • Responsiveness: Willingness to offer a fast service
  • Credibility
  • Access: Easy to do business
  • Customer complaints

Maybe we (Quality professionals) have to do more on this measuring aspect. New and improved measuring methods will have a positive value for both organizations and your customers.

So the experience economy and the quality industry, go hand in hand. Improving the quality of your service will in turn deliver the experience your customers are looking for.

Dr. Suresh Gettala

Joseph Pine and James Gilmore, the two protagonists of the experience economy, argued that the transformation of the economic progress has gone through four-stages of evolution – from agrarian (commodity based) to industrial (goods based) to service (service based) and finally to experience based economy.

Source: B. Joseph Pine II and James H. Gilmore, “A leader’s guide to innovation in the experience economy”, Strategy & Leadership, Vol. 42, Issue: 1, pp.24-29, 2014.

Today, experiences are construed as a distinct construct and economic offering from services just like how services were seen distinctive from goods in the earlier decades. Experiences are perceived to be unique, memorable and sustainable over time that would involve customers’ involvement at multiple levels – physical, emotional, intellectual, behavioral, social and spiritual.

The primary question that arises is: “Can the quality of the experience be measured”? Earlier dimensions of quality, predominantly were explained from a goods/services perspective, quality of the experience transcends such limited thought process and details that experience quality encompasses the “total experience” ranging from the pursuit, procurement, consumption and post-sales phases of the experience.

It has been proven through research studies that customers do construe customer experience quality and therefore able to perceive the relative superiority or inferiority of their experiences. While we can be forgiven for thinking that managing customer experiences is apropos only to the consumer industry, it must be noted that business to business milieu also provides definitive stages for experiences.

Pine and Gilmore postulates five value creating quality approaches that drive progress in the dynamic experience economy that include, customized goods, enhanced services, charging for experiences, fusing digital technology with reality and transformative experiences.

To encapsulate, “Experience” is not an immeasurable, amorphous construct but a concrete economic offering which if carefully designed and staged would result in a lasting impression on the customers. Needless to mention, this would in turn help to carve a niche for the seller organization if they can stage an experience that is going to create some memorabilia in the minds of the players that results in a transformation within the customers.

As more and more focus is being given to the quality of the experience, by both the business and the academia, prudent practitioners have realized that they can command a fee for the experience per se. Consequently, companies enabling such transformational experiences can charge not just for the goods and services or the time spent with the customers but for the transformation resulting from such experiences.

Several research and practitioner oriented articles have dwelled on the dimensions of experience quality and how they positively influence other constructs such as customer satisfaction, loyalty, retention and repeat purchases. There has been substantial proof to illustrate that effective management of experience quality is extremely crucial for achieving sustained financial success.

Blockchain and Quality

Guest post by: Nicole Radziwill

Quality is all about satisfying stated and implied needs –now, or in the future. When we envision and design high-quality products and services for the future, that’s innovation. One of the most hyped innovations of 2017 was blockchain, which has the potential to transform business models and the way quality is managed. The purpose of this article is to explain this relationship in a simple way.

Blockchain is the innovative technology supporting the Bitcoin cryptocurrency. Bitcoin gained tremendous traction in 2017, starting at just over $1,000 in January and reaching nearly $20,000 by the end of the year.  It increased in value so much over this time that it’s been compared to the Dutch tulip market bubble of the 1630s.  After tulips were imported into Holland from Turkey, an alteration to the solid colors of the tulips caused the appearance of “flames” on the petals. This made people believe that the tulip bulbs held extreme value, and so many people traded their land and their savings to invest in what they felt was a “sure thing” – to lose everything not long after, when the market corrected itself.

Bitcoin (USD) prices, 1/1/17-12/13/17. Generated using https://www.coindesk.com/price/.

Bitcoin (USD) prices, 1/1/17-12/13/17. Generated using https://www.coindesk.com/price/.

The blockchain technology that supports Bitcoin is, at its core, a database. It’s a special kind of database, but no more magical, really – and easier to contextualize if you think about innovations in database technology over the past two decades.

Databases can be roughly classified into these categories:

  • Relational databases (Oracle, MySQL, PostgreSQL, Sybase): When you can organize your data in terms of tables, fields, and relationships between those entities, a relational database is often appropriate. For example, your customer data might be kept in the “people” table with fields like address, state, or gender. Each record in the people table might have a type – employee, partner, or customer. Although records can be changed, it’s easy to accidentally input bad data, and it’s also easy to accidentally generate duplicate records. Scaling a relational database can also be rather tricky.
  • Non-relational (NoSQL) databases (MongoDB, Cassandra, Redis): If most of your data comes in large blobs and you don’t want to split it up into fields and tables, these databases are useful. MongoDB is great for collections of documents, such as web pages, log data, or tweets. Cassandra works well for analytics applications. Sensor data and other data types that change frequently or need to be held in active memory (key-value stores) are handled well by databases like Redis. NoSQL databases are easier to scale than relational databases.
  • Other databases and data stores with special properties: Some databases are so unique they don’t feel or act like databases. Solr, for example, is traditionally used when you have to provide search functionality over a store of documents. Hadoop is a distributed file system, so it functions somewhat like a database even though it’s not one. Graph databases are designed for data stores where the relationships are the most important aspect, so they are gaining popularity for social networks. Large, institutional science projects often store their data in special binary files that have distinct formats, can be queried like databases, and in many ways act like databases – but they are not technically databases.

 

What Distinguishes Blockchain-based Databases from Ordinary Databases?

First, the blockchain is designed to handle transactions – it’s a digital ledger. So it’s not surprising that its first “successful” use cases are in the realm of cryptocurrency, where people engage in transactions with one another to exchange something of value.

Next, this database is immutable, meaning you can’t go back and change earlier records. Every time a new transaction occurs, a cryptographically sealed “snapshot” is taken of the entire database. When I first heard this, I was worried: so that means if we accidentally enter something incorrect into the database, it can never be changed, right? And its presence is memorialized forever? The answer to this question is: sort of. Thanks to “smart contracts”, we shouldn’t ever be in the situation where bad data gets entered into our blockchain-based system, because incoming data will be checked (by multiple agents) against the smart contract — and only allowed to join the blockchain database if it meets all the quality requirements specified by the contract. It’s like a fancy way to implement validation rules – with the added benefit of being totally traceable. Imagine how nice it would be to trace all the steps in the process that brought the fresh fruit into your kitchen – or any other product you use — just because all transactions in the production process were logged into a “supply blockchain.”

A blockchain database is also decentralized and distributed — you don’t just “buy a blockchain database” and install it at your company. Databases can be centralized, decentralized, or distributed. Most business databases in the past were centralized: there was one instance installed, and a database administrator (or team of them) ensured the performance and security of the database while everyone in the organization created and used applications that interacted with the data. Today, these databases are more commonly distributed: there’s not just one instance, but several – there is no central storage, but there may be storage on many computers, or over a network of connected computers (or “in the cloud”).

Decentralized systems have many advantages – for example, nodes can join or leave the network at will. For example, you can create a web site or take it off the internet whenever you want, if you own and control it. In decentralized systems, there is no single point of control. If a business wants to implement blockchain but also wants to control all the nodes, that should be a big red flag. By its nature, blockchain is decentralized just like the internet itself.

Finally, blockchain is transparent. Any of the participants who own nodes can see all the transactions — so there should be fewer opportunities for fraud. This doesn’t mean that there isn’t opportunity for danger, though.

 

Why is Blockchain Potentially Useful for Quality Assurance?

In addition to enhancing provenance and traceability, one of the biggest envisioned applications of blockchain databases is to support machine to machine transactions. As intelligent agents grow in complexity and are trusted to handle more tasks, and as the Internet of Things (IoT) expands, there needs to be a high-quality record of how those objects and agents interact with other objects and agents – and with humans. Blockchain could also be used to support new business models like decentralized energy markets, where you can consume energy from the local power plant, but also potentially generate your own and contribute the excess energy to your local community for a fee. It could potentially transform middleware as well, which is software that allows different software systems to communicate with one another. (A long time ago, someone told me that it’s like “email for applications” – they can send messages to one another so they know how to react, for example, when a company receives an order and several systems need to be alerted that the order has arrived.)

In principle, transactions logged to a blockchain make it impossible to defraud participants in the process, and impossible to manipulate records after they are recorded. They are self-auditing and fully traceable. Blockchain won’t make quality assurance, tracking, or auditing EASY, but you should expect it to make the business landscape different – new business models will be possible, and it will be possible to entrust intelligent agents with more tasks.

Blockchain can help us ensure that stated and implied needs are met, and do it in such a way that the integrity of our data is assured simply by its presence. But we’re not there yet. Developers still need to implement simple, demonstrable use cases to make it easier for managers and executives to map these technologies onto specific business needs. In addition, blockchain is slow compared to relational database systems, so this needs to be addressed as well before widespread adoption.

 

Apply Design Thinking to Quality Practices

 

More and more organizations are using design thinking to assess business concerns, discover creative solutions, and to establish market opportunities. As this strategy gains more traction ASQ asks:

How can design thinking be integrated with, and applied to quality practices?   

 

Prem Ranganath: The Art of Quality

Design Thinking is an opportunity to humanize quality and continuous improvement

Background: Design Thinking is a collection of methods and mindset that evolved at Stanford University and has now entered the mainstream in almost every industry. While the design thinking stages and methods might appear to be a framework, the essence of design thinking is the focus on ‘empathy’ and ‘experimentation’ to design innovative, meaningful and people focused solutions.

Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.

-Tim Brown, CEO OF IDEO

Design Thinking for Quality Practitioners:

There is no dearth of frameworks, toolkits and methodologies for quality management and continuous improvement. For example, a methodology like DMAIC (Define, Measure, Analyze, Improve, Control) provides a structured set of methods for continuous improvement along with a set of problem-solving tools and techniques for each stage in the methodology. DMAIC provides an opportunity to assess the current state using quantitative methods and prioritize problems/ opportunities for which solutions have to be implemented.

Metrics to qualify the current state and for measuring effectiveness of the solutions implemented are typically tagged to business objectives which ensures that employees understand the alignment between improvement initiatives and the potential impact of outcomes on business objectives.

If we use the Visual-01 (below) from IDEO as a reference, traditionally quality and continuous improvement initiatives are largely driven by viability and feasibility considerations. Integrating design thinking with improvement initiatives brings the ‘human’ element into focus, by driving conversation on ‘desirability’ of the solutions being proposed for implementation.

Visual-01: Dimensions of Design Thinking (source: IDEO)

Innovation Dimensions

When desirability is considered alongside viability and feasibility on quality and continuous improvement projects, it significantly improves change management and adoption. This approach also significantly increases the odds of institutionalizing and sustaining changes and ensures the effectiveness of the changes. Use of empathy as a facet to characterize current state brings more focus on the users (internal or external customers). Applying empathy alongside prototyping to evaluate alternate solution options for the future state improves engagement from the user community and will have a positive impact on the pace and extent of adoption. An informed and engaged user is more likely to be a champion for the solutions being implemented. The combination of traditional metrics and qualitative data supporting the desirability dimension can provide a new perspective for prioritizing and driving improvements.

Visual-02: Integrating Design Thinking with DMAIC

Integrating Design Thinking with DMAICVisual-02 shows the integration of a Design Thinking flow represented by the steps Empathize, Define, Ideate, Prototype and Test with the DMAIC approach for continuous improvement. Integration of design thinking methods to adopt a humanized approach to characterizing (challenges and opportunities) current state. On similar lines, engaging internal and external customers to experiment and improve in a culture of play can lead to solutions that are desired by the user community and enable the quality practitioners ability to sustain and scale the improvements.

I have used the design thinking approach and methods on large transformation initiatives and during Kaizen events and I have seen significant impact on participants’ enthusiasm and engagement. The ability to empathize and experiment puts a human face to quality and process improvements and I would highly recommend design thinking to quality practitioners. I look forward to hearing from my peers on their experience with design thinking.

 

Robert Mitchell: Quality Matters 

Use Design Thinking to Innovate Your Quality Improvement Journey

Design Thinking is a strategy-making process that focuses on customer behaviors rather than opinion (aka tribal knowledge) and market research.

There is a lot of press lately about Design Thinking concepts, applications and examples in the development of new products and opening new markets. Design Thinking was popularized by David M. Kelley and Tim Brown of IDEO and Roger Martin of the Rotman School. A very good, short video on the topic was recently published by the Harvard Business Review blog . For a more detailed explanation please read the paper, “Design for Action” written by Brown and Martin.

Design Thinking process:

Design Thinking Process
From a paper recently published by Creativity At Work, “Design Thinking is a methodology used by designers to solve complex problems, and find desirable solutions for clients. A design mindset is not problem-focused, it’s solution focused and action oriented towards creating a preferred future. Design Thinking draws upon logic, imagination, intuition, and systemic reasoning, to explore possibilities of what could be—and to create desired outcomes that benefit the end user (the customer)”.

So how might Design Thinking be applied to your Quality improvement frameworks and roadmaps? The three major stages of Design Thinking are:

  1. Observe customer behavior; define unarticulated needs
  2. Ideate, Prototype, experiment and test
  3. Bring the new concept to life; open new markets

What differentiates Design Thinking from traditional Voice of Customer collection approaches is the emphasis placed on observation of behaviors rather than relying on customers’ input to satisfaction surveys. Survey responses tend to validate Expected Quality and rarely reveal Exciting Quality opportunities (see “Kano Model”). In this way, Design Thinking is similar to Focus Panels and “Be the Customer” methods to better understand unarticulated customer needs. It is at this stage of Design Thinking that the Quality practitioner has the unique opportunity to innovate through the introduction and incorporation of Journey Mapping to document customer experiences throughout the value chain of the producer-customer relationship, from product awareness to purchase and after-sale touchpoints.

An example of customer journey map:

Customer Journey Layers

The stages in Design Thinking around Ideation and Prototyping should look very similar to your existing Product Development and Commercialization processes. Many such approaches use a stage-gate model to prototype, test, and refine product design to evaluate customer acceptance and verify production cost estimates. Quality’s role in this stage should be to coach and consult in the proper use of experimental design to minimize experimentation costs and identify potentially important interactions of inputs and process variables to optimize performance of customer needs.

Another unique opportunity in the Design Thinking process for the Quality professional is in the final stage of bringing the new concept to life. With the help of social media the properly trained Quality professional can analyze customer / consumer feedback to validate areas of satisfaction and dissatisfaction, focusing on opportunities to build loyalty and engagement.

One can debate whether Design Thinking is really all that new or novel an approach to the value creation process. Design Thinking reinforces the power of understanding customer behaviors and unarticulated needs to deliver Exciting, innovative new product and service offerings for improved customer satisfaction and engagement… and potentially opening whole new markets. Per Linda Naiman (Creativity at Work), “Design Thinking minimizes the uncertainty and risk of innovation by engaging customers or users through a series of prototypes to learn, test and refine concepts”. The Quality professional might also consider how Design Thinking and Journey Mapping can help him/her to innovate their professional services portfolio for increased customer satisfaction in teaching, coaching and consulting outcomes.

“The best way to predict the future is to create it” – Peter Drucker

 

Luciana Paulise: Biztorming

What is Design thinking

Design thinking is a systematic and collaborative creative problem solving approach focusing on customer needs, getting information by direct observation, and testing it in a disciplined way. Similar to the Lean startup approach, the key is to fail fast and fail often. Even Toyota production system promotes investigating as many alternatives as possible, to find the very best solution, and always urge to propose ideas and fail as fast as possible.

The three main stages

1) Invent the future: With design thinking you should imagine what could be, in the ideal world, with limitless boundaries. You need to think what your customer may want but don’t know. The way to do that is by “Camping out” with your customers, like Home depot does. They talk to customers, ask how their experience was, ask questions like “did you find what you expected, what about the price, was it easy to find?” Sometimes a customer just want something fast, meaning buying a product in your website in just three clicks. That is what you need to discover through observation, what is “unstated”. Customer know they want to Get from a to b, but don’t know how. You need to find out the best way by immersing in their lives, observing and asking questions.

Ideas for product changes may be related to new products, pricing or new store displays.

2) Test ideas. You can do Mindmapping to write down ideas after observation, and then test those ideas. Do first individually, and then test it with your team mates or even with your customers. Remember, don’t judge, simply think and write down.

Once you have your ideas mapped, you need to conduct experiments to test the ideas in the real world. You can also test new processes that maybe faster, easier or

Use cheap materials, or partial solutions or Rapid prototyping tools. It does’t have to look perfect at first. The idea is to go fast, to be able to adjust fast.

3) Bring the new product to life. Identify resources and activities to implement the new ideas. Plan how to produce, distribute and sell the product or how to change the process.

Some Case studies

Design thinking can be used in any type of industry. A health provider for example used it to re-engineer nursing-staff shift changes. Close observation of actual shift changes, combined with brainstorming and rapid prototyping, produced new procedures that radically streamlined information exchange between shifts. The result was more time for nursing, better-informed patient care, and a happier nursing staff.

The Innova School System, for example, with 23 schools thus far, is applying design thinking across its platform, from how the classrooms are built to the curriculum. and the UK’s Design Policy Unit  as described in Tim Browns’s first article on Design Thinking for HBR.

Samsung Electronics manufactured inexpensive, imitative electronics for other companies. Its engineers built products to meet prescribed price and performance requirements. In a company that emphasized efficiency and engineering rigor, the designers had little status or influence. Then, in 1996, Lee Kun-Hee, the chairman of Samsung Group, frustrated by the company’s lack of innovation decided that in order to become a top brand, Samsung needed expertise in design, and set out to create a design-focused culture that would support world-class innovation. It took a long way until getting everyone in the company on-board, but they finally made it. Now Samsung innovation process begins with research conducted by multidisciplinary teams of designers, engineers, marketers, ethnographers, musicians, and writers who search for users’ unmet needs and identify cultural, technological, and economic trends. Design thinking for them means three major things: empathy, visualization, and experimentation in the marketplace.

Tech companies are using quality tools to organize their innovation cycles, likewise automotive, manufacturing, or even consulting industries more focused on standardization should start using quality together with design thinking so as to get a disciplined empathetic approach to customer requirements.

Are you ready?

As Industry 4.0 continues to evolve, what can quality professionals do to ensure they will be an integral asset throughout this industrial revolution?

As Industry 4.0 continues to evolve, what can quality professionals do to ensure they will be an integral asset throughout this industrial revolution? 

 

 

Robert Mitchell:  Quality Matters

First, let’s begin with an operational definition of Industry 4.0.
Wikipedia defines Industry 4.0 as “the current trend of automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the Internet of things and cloud computing. Industry 4.0 creates what has been called a “smart factory”. Within the modular structured smart factories, cyber-physical systems monitor physical processes, create a virtual copy of the physical world and make decentralized decisions. Over the Internet of Things, cyber-physical systems communicate and cooperate with each other and with humans in real time, and via the Internet of Services both internal and cross-organizational services are offered and used by participants of the value chain”.

Accenture released a report in January 2015 that concluded an industrial-scale version of Industry 4.0 could add $14.2 trillion to the world economy over the next 15 years.

Christoph Roser at AllAboutLean.com illustrates the four industrial revolutions:

So, the fourth industrial revolution is the move towards digitization including automation, robotics, artificial intelligence. The Smart Manufacturing Leadership Coalition (SMLC) in the United States is a non-profit organization comprising manufacturers, suppliers, technology firms, government agencies, universities and laboratories that share the goal of advancing the thinking behind Industry 4.0. Its purpose is to construct an open, smart manufacturing platform for industrial-networked information applications.

In a Forbes article dated June 20, 2016, Bernard Marr states that in order for a factory or system to be considered Industry 4.0, it must include:

  • Interoperability — machines, devices, sensors and people that connect and communicate with one another.
  • Information transparency — the systems create a virtual copy of the physical world through sensor data in order to contextualize  information.
  • Technical assistance — both the ability of the systems to support humans in making decisions and solving problems and the ability to assist humans with tasks that are too difficult or unsafe for humans.
  • Decentralized decision-making — the ability of cyber-physical systems to make simple decisions on their own and become as autonomous as possible.

Having defined Industry 4.0, it is clear that assuring such inter-connectedness of software, sensors, devices and data centers requires a quality system that delivers data integrity, privacy and reliability in addition to assuring reliable, rugged, scalable, fully-integrated systems and processes that seamlessly data-share between networks while consistently meeting producer, governmental and customer needs. Opportunities exist for the Quality professional to make significant, innovative contributions in areas of software quality assurance, reliability, process validation, environmental life testing and accelerated stress testing, Real Time Process Monitoring, advanced calibration and big data analytics. Now, more than ever, product development and commercialization teams must assure reliable machine-human interface ease of use and real-time results-driven feedback loops. And, of course, discover even deeper insights to the ever-changing voice of customer (and voice of process) along with a comprehensive understanding of the customer experience throughout the value chain (e.g. journey maps), and assure that the organization is measuring the right key metrics to deliver success.

Industry 4.0 offers exciting new challenges to the Quality profession while building on our expertise of problem solving, process improvement, and managing the organizational white spaces to sustain customer focus and achieve operational excellence

Natella Isazada: www.natellaisazada.com

The top two areas that quality professionals need to master in order to succeed in Industry 4 are soft skills and innovation. My opinion is supported by the evidence below.

Modern scientific progress and rapid technological advances enable the automation of more processes and tasks more rapidly and effectively than ever before. Contemporary workplaces include many examples where machines are replacing humans. In an environment like this each of us has to distinguish our value and contributions from those of automated machines and programmed applications. One competitive advantage humans have over robots is our people skills and that is one strength quality professionals need to further develop and to capitalize on.

During the fourth industrial revolution those quality professionals who limit their capabilities and contributions strictly to data interpretation and reports, will render themselves obsolete and face extinction. Quality professionals who desire to adapt to the new dynamics, need to extend our skill sets beyond the usual statistical calculations and technical tools. Aptitude in knowledge transfer, business management and the humanities will be essential in the near future. Quality professionals are already becoming internal management consultants leading strategic planning and risk management initiatives as well as building knowledge management systems. Our ability to translate quality concepts across departments can help us further solidify our positions and sustain our importance within the organization.

The key to our profession’s survival and success throughout the new industrial revolution is to continue adding sustainable value in the ever changing environments. As Quality professionals, we have to go beyond traditional methods and use innovative strategies and tools including

  • Design Thinking,
  • Internet of Things,
  • Quality as a Service, and
  • Mastery of technological solutions like Big Data and Cloud-based capabilities.

To be an integral asset in Industry 4 we have to really tune in to customer needs and think what requirements customers will have in the future. The value of every great idea is determined by its ability to solve customer pain. Most likely the solution to the future pain lies somewhere outside of our current capabilities, requiring our full efforts to prepare for the expectations and demands of the new era.

 

John Hunter: Curious Cat 

Technological innovation brings great opportunity for improving results and quality of life. But transforming potential benefits into real results comes with many challenges.

One of the aspects of management that the fourth industrial revolution makes more important is the ability for organizations to rapidly adjust to drastic changes in the market and competitive landscape. Organizations need to be designed to be robust and to cope well with the increasingly rapid pace of transformative innovation.

Many organizations will hope the fourth industrial revolution allows them to avoid making the necessary improvements to their management thinking and management systems.  Adopting quality management practices requires that executives change their behavior and decision making processes but the last 50 years has shown that is a difficult task.  Most often management improvements at the executive level are very limited (even while significant improvements are made to operational level processes).

I fear the hope that the fourth industrial revolution will be possible without transforming the executive level management practices will fair as badly as GM’s investment in robotics in the 1980s fared.

 

Pam Schodt: Quality and Improvement in Work and Life 

Some aspects of Industry 4.0 are automation, data exchange, the internet of things, cloud computing, cybersecurity, and computer innovations.

Quality professionals need to stay relevant. By relevant, I mean they need to understand these aspects on a general level and stay updated on technical applications and systems that interconnect, exchange data, and prompt autonomous decisions in their industries.

In some cases, this understanding is no further away than a youtube video. The internet has made staying technically relevant easier. The quality professional should take advantage of all in-company resources as well as local chapter and national ASQ educational opportunities. If you want to request speakers on new technology, reach out to chapter leadership. If you have Industry 4.0 experience, offer to exchange information in the form of a talk or tour with your local chapter membership.

 

Chris Moustakas: www.devonway.com

There are two kinds of data scientists, the joke goes: 1) Those who can extrapolate from incomplete data.

If you got that, congratulations, you’re a natural! If not, don’t worry, it’s still early days. Although talk of big data, artificial intelligence, and internet of things dominate the tech airwaves, the truth is that we’re only just starting to scratch the surface of what we can do with all the data we’re collecting.

If you’re a quality professional and you feel overwhelmed or even threatened by the subject, you shouldn’t: in fact, you should welcome it, because it’s going to make your role that much more critical to your organization. Ultimately, the purpose of data is to derive insights regarding trends and patterns, so as to uncover bottlenecks and inefficiencies. Sound familiar? The tools and methods may be evolving, but at the end of the day a human (you) needs to translate those insights into organizationally appropriate actions.

Quality has always been about collecting and understanding data. By making it easier to gather and analyze information from sources previously prohibitive, technology has thrown open a wonderful door of opportunity. IT may know how to install the sensors and implement the software to crunch the inputs, but why they crunch and to what end needs to be done with purpose – and Quality professionals can play a central role in shaping that purpose.

Just as excitingly, this is a fantastic chance to work closely with IT, a part of the organization from which Quality has often been separated, if not completely alienated. Both teams pack significant brainpower – enabling them to work together through a common objective will be transformative to those organizations willing to take the plunge.

 

Luciana Paulise:  Biztorming

A report from Mc Kinsey Global Institute “Big data: The next frontier for innovation, competition, and productivity” said that as big data “become an increasingly valuable asset, their intelligent exploitation will be critical for enterprises to compete effectively. The use of big data will become a key basis of competition across sectors, so it is imperative that organizational leaders begin to incorporate big data into their business plans.” They defined 5 themes leaders need to start thinking about to keep their companies in the loop: manage inventory data assets, identify potential opportunities and threats, buildup internal capabilities to create a data driven organization, develop an enterprise information strategy and address data policy issues.

In God we trust, all others must bring data

As Edwards Deming once said, In God we trust, all others must bring data.  These 5 characteristics sound really like a Deming company where measuring data and following the Plan Do Study ACT cycle has to be part of the company culture. The problem is that unfortunately there are many companies in the world that are still lacking this insight. In my recent book SOS PYMES (A.k.a. Small business Help) I describe the situation of small business in developing countries where measuring data is not exactly part of their day to day activities.

Here is where quality experts can help the new generation of business leaders all across the world.  Teaching about the importance of big data and all kind of company measures to capture, communicate and analyze as part of the decision making process is key. Six Sigma or the Deming System of profound Knowledge are such great examples of starting points for training people to think about data as an asset.

Companies will need not only supporting technology personnel to implement big data, but also managers and analysts who know how to request and consume big data analyses.

All of the business leaders in an organization will have to develop a baseline understanding of analytical techniques in order to use big data effectively. As McKinsey report mentions, “Organizations can modify their recruiting criteria to take this requirement into account, but more importantly, they will need to develop training programs to increase the capabilities of their current management and analyst ranks.”

 

Prem Ranganath:  Medium

In recent months, I have had a chance to participate in several informal and formal forums on what does the future hold for quality practitioners in Industry 4.0. The reference to Industry 4.0 is centered in a world where transactions, interactions, product development, insights and decisions are largely driven by technologies such as AI, big data, automation/ robotics and IoT. The most common questions I have heard at these forums include,

  •  will formal improvement programs enabled by Lean and Six Sigma still matter,?
  •  would organizations still seek certifications based on ISO, CMMI etc.?
  •  does quality take on a new meaning in Industry 4.0 organizations?
  •  what would upskilling mean for quality practitioner so that they can prepare for rapid changes sweeping their organizations (or their customers)?

Although I don’t have a crystal ball to predict what Industry 4.0 holds for quality practitioners, here is what I think the changes mean for quality practitioners (including myself). I look forward to hearing the views of my peers in ASQ and in industry.

  1.  Technologies driving the evolution of Industry 4.0 still require well designed business processes. Automation of inefficient processes or attempting to draw deep insights from data pumped out by applications whose reliability and integrity are questionable only adds
    more risk to the organization
  2.  With the increased number of system integrations and potential technical complexity led by connected devices, there will be a need for quality practitioners to view platforms as the context (in place of systems and products). This evolution will also require quality practitioners to extend their skillsets to include risk management, quality management and UX. Industry 4.0 is already driving alignment across these three areas and the emergence of platforms will require quality practitioners
  3.  As mentioned earlier in this post, accelerating flow and driving efficiency cannot be lead to tradeoff in effectiveness nor should it negatively impact the risk profile of the platform. This is where the design for quality perspective will become important and I foresee quality practitioners playing an important role in enabling organizations succeed on this front
  4.  Effective quality practitioners go beyond the use of methods and number crunching to be impactful change agents. They bring the right balance of knowledge in organizational processes and technology so that they can help teams navigate through the changes led by transformation initiatives to embrace and transition to Industry 4.0.

 

Luigi F. Sille: Share Quality

Being a quality manager, I strive for continuous improvement; making procedures / processes more efficient and also more effective. Continuous Improvement has to do with CHANGE, and Quality Management is the KEY for making products, and/or services better for the end users (customers).That’s why quality professionals have a crucial Job.

Technological innovations (technological changes), are related to technological development, and progress. These innovations contribute to some huge changes in the way we operate as a society; RADICAL CHANGES.

Changes that will impact the way we live, work, and connect to one another.

How are companies going to do business in the future, and what part will the quality professional play throughout this industrial revolution?

  • Fast changes in the digital area means that the world is becoming smaller. Everybody can do business all over the world. So there will be NO limitations in where/who we choose to affiliate ourselves with. We experience videoconferences, mobile devices, so office work will become somewhat obsolete in certain areas.
  • Partnerships between organizations will become more widespread. This partnership will be close with one specific aspect in mind: to have a win-win situation for every partner.
  • One other thing that we will experience is that: we will see everybody (customers, organizations, and partners) working together to develop new opportunities (the win-win relationship). Continuous improvement is present, and ALIVE.

What will the role of the quality professional be throughout the industrial revolution?

I think that we quality professionals have to keep educating ourselves, come together and brainstorm about new programs that fit this new ERA. Quality will always be a very crucial aspect for every organization. So the presence of quality professionals is very important. But the way we are used to working, doing our jobs will change (it has already been changing).

The Fourth Industrial revolution will have some huge impacts, but in the end it will all come down to PEOPLE. We have to improve the future, where we can all live happily, and in peace. I look forward to a future where people are our first priority. Where we educate them properly, and after that, empower them. Technical innovations can also have a negative impact on people, but on the other hand it can push mankind to use their skills (creativity) to lift us to the next level.

 

Sarah Haynes: Sigma Solutions 

It’s in the news every week now – a new development in Artificial Intelligence (AI) that makes a real-life version of Terminator look ever more possible. From the trivial to the amazing, AI appears poised to become part of our lives.

History is littered with examples of people who resisted change because it was threatening, scary, or overwhelming, and then were left behind. I’m pretty sure some of my high school teachers still think the internet is “just a fad”.  As Elbert Hubbard said, “The world is moving so fast these days that anyone who says it can’t be done is generally interrupted by someone doing it”.  A better way forward is to try to learn about and understand new technology, and think about how you might use it to add value to your workplace.

I can already hear people saying “I don’t have time”.  As a consultant, blogger and mom, I don’t have a lot of time either.  So take baby steps.  My favourite:  talk to other people (especially millennials!!) about what apps or software they like, and try them out.  Some will be dumb, and some may just change your life.  I tried out Snapchat and deleted it after 2 days.  I tried Zoho books and now I don’t know how I lived without it.  Join a technology group on LinkedIn.  Read the new technology reviews in Saturday’s paper.  Browse through CNET magazine once in a while.

AI will change our world.  How will you move with it?  Joyfully, or fearfully?