Digital transformation & automation

Outset Medical’s Vice President of Manufacturing, Marc Nash, and Tulip Interfaces Chief Executive Officer, Natan Linder, authored an article for the World Economic Forum about “The Digital Transformation of Business.” Key takeaways were that augmented lean is a concept that highlights how technology interfaces must foster intrinsic workforce motivation, excitement, and empowerment, with a workforce that’s efficient and enhanced. Additionally, augmented lean organizations require a new breed of emergent governance, which is a combination of leadership and workers interacting with technology to change how a company works.

For organizations, digital transformation brings agility, builds resiliency, and positions a company for the future. In some instances, embracing digital technologies enables employees to work together more efficiently. In other instances, advanced technologies – such as automation – can replace the need for human intervention while delivering more consistent results. Technology improves almost every facet of enterprise business – from automated assembly lines powered by robotics to automated business processes – and digital twins improve the performance and efficiency of equipment.

Yet, many medtech manufacturers have taken a cautious approach to digital transformation, mainly due to security concerns due to the highly regulated industry. However, when adopting digital technologies, medtech companies can gain the greatest benefits by looking at inventory management; logistics and distribution; device maintenance; product development; and warehouse operations.

Nash and Linder note that while the “successful digital transformation is the holy grail of manufacturing firms, it does not always come easy.” They add that the high failure rate happens because “companies tend to start with complex technologies promising efficiencies, not with the needs of their workers.”

They suggest reversing the focus to achieve success – the essence of augmented lean – and to achieve transformative effects technology interfaces must foster workforce motivation, excitement, and empowerment. As they say, “Augmented lean organizations demand full attention from their workers. Implementing such a framework requires embracing a new breed of emergent governance, which is a combination of leadership and workers interacting with technology to change how a company functions.”

They offer an example of this framework in action with a discussion of the “transformation of a greenfield factory in Mexico (OMM), at Outset Medical, a U.S.-listed medical device manufacturer based in San Jose, California, that was both agile and emergent.” And, while perhaps a risky strategy, they note it was also an approach with the most visible rewards.

As medtech manufacturers are faced with rising pricing pressures and lower returns from mature products, they must look to digitalization to continue growth and remain cost competitive today and into the future.