Agile Manufacturing is the FutureAgile Manufacturing is the Future

Agile Manufacturing is the Future Transcript:

Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White.

Jeff White: Welcome to The Kula Ring. My name is Jeff White, and joining me today, as always, is Carman Pirie. Carman, how are you doing today?

Carman Pirie: I am doing well, Jeff, and you?

Jeff White: I’m doing great. This is our happy New Year podcast, so welcome to 2019.

Carman Pirie: It … You know, 2018, we hardly knew ye. But I think what’s kind of interesting is that, look, it’s that time of year when everybody wants to talk about New Year’s resolutions, and trend predictions for the new year, and act like there’s a bunch of certainty and a clearer lens through which they’re seeing the new year.

And I … I guess what is exciting to me about this podcast, and our guest today, is that we’re not going to try to predict anything, and we’re not going to act with any certainty whatsoever, we’re just going to-

Jeff White: How is that any different than normal?

Carman Pirie: Yeah, that’s a point. But I think this one may be more interesting, and the one thing that will make it different than normal is that it’s the first one of 2019.

Jeff White: Very true, very true. So, joining us today, all the way from Los Angeles, is Krisztina Holly, who goes by Z, and she is the founder and host of The Art of Manufacturing Podcast, also runs a really interesting web-based show where she interviews people on Make it in LA, which is an initiative of the Los Angeles Mayor’s Office, which is very interesting, and promoting manufacturing in LA, and everything that’s going on there. And also the first creator of the TEDx series of conferences, hosted that as well, pretty impressive, pretty cool.

Welcome, Z. Thanks very much for joining us on the program. And I have to say, you know, because we are Canadian, we’re going to have to call you Zed.

Krisztina Holly: Okay, if you have to. It’s great to be on the show. Thanks for having me.

Carman Pirie: It’s great to have you, Z. Talk to us a little bit about your background, just introduce our listeners to you a bit, and give us a sense of what is happening at Make it in LA.

Krisztina Holly: Sure. Well, I like to think of myself as a champion of undiscovered innovators, and that’s been something I’ve been doing for well over, gosh, 15 years now, that I originally started … I’ll tell you about that in a moment. But I started as an engineer at MIT, and then started a company out of grad school at MIT, and was in tech for, gosh, over a decade, when I had the opportunity to go back to academia and start an innovation center at MIT.

And that’s where I really discovered the excitement of … and the joy of helping other people make impact. So, I created an innovation center at MIT, and then one at USC, and that’s where I had started TEDx USC, which was the first ever TEDx, and realized the power of being able to help people tell their stories, build community, and help people start companies, whether they’re faculty, students, whoever.

And now I’m focusing more on the manufacturing side of things. I was working for Mayor Garcetti in LA as the entrepreneur in residence, and discovered this opportunity, this undiscovered, untapped opportunity of the largest manufacturing center in the country. Most people don’t know that LA is the largest manufacturing center in the country, but it’s not connected and not celebrated as much as tech and Hollywood.

So, that’s why-

Carman Pirie: It’s not that they didn’t know that, it’s that they wouldn’t put LA on the list of the top 25.

Jeff White: I thought we had the Midwest for that.

Carman Pirie: Right?

Krisztina Holly: Absolutely. And people think, oh, LA is just about Hollywood, and about entertainment, but in fact, for every job in film and television in LA, there’s four jobs in manufacturing, so it’s a huge part of our economy here. So that’s why I started Make it in LA, which is a nonprofit, which is building community among especially the entrepreneurial community, new brands, emerging businesses, and founders, and also established CEOs as well, and helping connect them.

And then I also founded and host this podcast called The Art of Manufacturing, where I help … with all the amazing people I meet through this process, I help to tell their stories.

Carman Pirie: This is very cool, and I’m really glad to be speaking with you today. I think we have so much ground to cover, so I want to dive right in to the thing that we were chatting about in a kind of pre-show preamble, which we should record that secretly sometime, actually…  we were talking about this notion of serious tinkering that you’ve been thinking about.

Krisztina Holly: Tinkering on.

Carman Pirie: Yeah, exactly. So let’s tinker about serious tinkering for a while.

Krisztina Holly: Sure, sounds great. Where do you want to start?

Carman Pirie: What do you mean by it?

Krisztina Holly: Well, so I think that the people that really appreciate the potential for tinkering. We think of it as more of like just this aimless play, but in fact, I think … when I think back on two experiences that I had early, early on in my career, it helps … really sparked this concept in my brain.

One was I was in this class, this intro to design class at MIT. It was this famous class, it ends in this big robotics head-to-head battle, and it was really intimidating. And I got this box of parts, it was my junior year, and I had to build a robot out of this random box of parts. And I was completely just mystified and terrified. Like, how am I going to turn this into something that’s going to win this contest?

But it wasn’t until I started playing and tinkering in the shop that I started seeing how the things fit together, and once I stopped worrying about that goal, I stopped having the fear. And then, as time went on, word around the machine shop was that I was going to win, the TV cameras actually started following me around. There was a TV show that was happening, it was great.

And I ended up doing really well. I made it to the final round, and I realized that there was this amazing power to just letting go of this outcome and allowing myself to tinker that it freed up my imagination and ability to innovate.

But then, the problem was that I was in for this rude awakening. It wasn’t the way things worked in the real world. So that my next job, my first job, was working on the space shuttle main engine in LA, and I had to build this calibration fixer for the robot. And the problem was that I wasn’t allowed to go in the machine shop. So, I had to draw … you know, design the parts, and then send the drawings off to the machinist, and the machinist would make it.

So, there’s such a difference in those two different ways of thinking, and that’s … When I thought back to that it made me realize that we’re in this really interesting time right now where we’ve shifted in software, but it’s not started to happen in manufacturing as well, where there are these tools that allow more people to participate in the product development and the manufacturing process, and it’s democratizing manufacturing, and it also allows us to iterate really quickly on designs.

So, it’s not just that we’re changing what we’re making, but it’s changing who can participate in that process, and how we innovate. And I think it has a lot of implications in … again, not just what we make, but, you know, marketing as well. I think that it’s really important to think about ways that we can involve marketing, sales, creative, design, all those folks in that process of product development for the future. So, it’s just really exciting to me.

Carman Pirie: It’s really exciting. I mean, I … My mind is just spinning at this, not just what happens, that you can iterate faster, or develop product enhancements in either a faster or a more effective way with this, but the fact that the actual … that the outcomes fundamentally change, and the process is fundamentally different because more people are included in it.

That’s a bit of that pickle-cucumber moment, where the pickle can’t become a cucumber again. This notion that the inclusion … it’s facilitated the inclusion of more people into the process, and that bringing more people into it will fundamentally change the process and its outcomes to a point where it will be, in some ways, unrecognizable from what it was before.

Krisztina Holly: For sure, and I just think that there … You know, you have more people from different diverse backgrounds that are participating. And I think that, you know, there’s … A good example is …

Can I tell a story about a company, an underwear company, which is based here in LA, MeUndies, I don’t know if you’ve heard of it, but-

Carman Pirie: I am presently wearing MeUndies, I can tell you.

Krisztina Holly: Are you serious?

Carman Pirie: That’s the first time I’ve disclosed underwear preference on this podcast.

Krisztina Holly: I don’t know, is that appropriate to talk about on the show?

Carman Pirie: I don’t  know if it will impact our rating or not, but-

Jeff White: Things can only go up.

Carman Pirie: Look, let’s see how it goes?

Krisztina Holly: Well, for the … Well, for people who don’t know, MeUndies is a direct to consumer underwear brand, and they present … they brand themselves as being super comfortable, but they also have these different designs that come out every month, and that was a new development over time. It didn’t start out that way.

But there’s … As an example, they use this program, this platform, called Lumi for their packaging, and when they use Lumi they can … Lumi has figured out the whole back end supply chain, negotiated bulk cost with their suppliers. And they have a dashboard, and they have tools that allow the marketing team to go in and change, and tweak, the package design. So it’s as easy to tweak a package design as it is to, say, tweak your website, or post something to social media.

And so, because of that, all of a sudden it’s … you can try a holiday version. And so they started with Valentine’s Day, and then they realized, wow, that’s really … that was really popular. So not only was the product itself … they tried, you know, underwear with hearts on it, but then they put it in a special package, and for direct to consumer brands, the package is the first time they have a physical experience. They’re not going into your store, so this is a really important part of the product.

So people started posting on social media, posting not just the underwear, but the packaging as well. And so then it became this viral phenomenon, and it made them realize, like, wow, there’s something to this. And so that’s when they started creating more and more designs custom.

And now, every month, when the product team, and the founders, the CEO, those folks get together to think about what the products are going to be next month, marketing, creative, design, all those folks are all in that meeting, where they didn’t use to be, because they realized how integral everything was, because they have the tools, now, to tinker with the packaging, a physical good, because now it’s easier. There’s little or no cost to making changes to the physical good.

Carman Pirie: I think … I’m just going to say that we got through that description without making a direct package joke about an underwear company.

Jeff White: But now you’ve done it…

Carman Pirie: Well, I thought … I mean, I thought that was impressive, at least. But it’s interesting, because MeUndies uses that … They’ve used that as an excuse for communication, too. I’m on their email list, I shall admit, and I get email from MeUndies, it feels like daily. And they use their ability to rapidly iterate both product design and package design as an excuse for communication. So it really does impact end to end.

Krisztina Holly: For sure, for sure. And yeah, it’s not just that they … I think that … They’re just one example. So, they’re an example of how, in an enterprise, people that don’t normally participate in that product development process can now participate.

There’s also opportunities for entrepreneurs to participate that haven’t participated as well. And so, that creates a challenge to bigger, established enterprises, because now there’s all these upstart brands or businesses that are able to develop products, and iterate really quickly, meaning that they’re getting a minimum viable product into the hands of their customer, and getting feedback, really quickly, whereas the larger enterprises, established enterprises, have all the legacy to deal with.

And so, enterprises need to think about how they themselves can also iterate more quickly within … And that’s something in software, a lot of people have heard of this, Agile development, right? But that hasn’t really transferred as much to the manufacturing realm as much.

Jeff White: Yeah, it’s interesting. I mean, we’re an Agile marketing shop. We work with Agile software developers who provide software that we use, and resell, and all of that. But it’s not the kind of thing that you see in the physical goods space, until now, that we actually have these rapid prototyping tools, and 3D printing, and other things that are becoming available that, like you said, democratize the process of creating something.

You know, that design process has always kind of been the realm of one or two people, designers, engineers, you know, within an organization. So, it’s pretty interesting to hear that people who make physical goods are able to take advantage of it, too.

Krisztina Holly: Yeah, and the whole idea of Agile is not just to iterate internally, but then to be able to get the customer feedback, which means that marketing all the more has to be at the center of that iteration, and of that innovation process.

Announcer: You’re listening to The Kula Ring, conversations on manufacturing marketing. Don’t forget to subscribe now at KulaPartners.com/TheKulaRing, that’s K-U-L-A Partners dot com slash The Kula Ring.

Carman Pirie: Well, I think … You mention the upstarts, and I guess it just … it occurred to me, as you said that, that they have an advantage in some way, because maybe they’re not as weighed down by the legacy processes, and the legacy ways of thinking. And as you were speaking about that I was thinking, well, there’s really, like …

If you’re an existing manufacturer, there’s really three ways that you can unlock value, if you will, in what you make. You can change what you make, you can innovate the product. You can change how you make it, arguably doing it more efficiently or what have you. Or you can change how it’s sold, or the connection, in some way, that you have with the buyer.

And it seemed to me, in that moment, what you were saying is that these new upstarts often come in, and they may not even … the how it’s made, or even the what they make, is in some way secondary because they maybe have a greater insight, or instinct, into how it’s sold, that their connection to the buyer is potentially stronger.

Krisztina Holly: For sure. I mean, let’s take the … even, MeUndies example. They will do surveys on social media to say, well, should we do this one or should we do that one? What’s more interesting? Should we do Star Wars or should we do Halloween? Or both? You know, and so they can react to it. And then people feel more invested in the outcome.

And this is true not just for consumer brands, but I think consumer brands do it very well. So, I think that B2B businesses should look to consumer for some ideas on how they can get the customer invested, because they feel like they’ve been the ones who helped create and design this product, and now they’re invested in it.

Carman Pirie: Yeah, I think there’s so much talk in the world of B2B marketing, and they talk about B2B marketing, and B2B buyers having B2C expectations. And I’ve thought for a little bit that maybe that’s a little backwards, that … or just kind of, maybe we’re thinking about that wrong, and that maybe what the difference is, is that B2C brands have just been better at establishing and nurturing their direct connection to customers and to buyers, and that B2B brands are often a little more navel gazely, you know?

Jeff White: Well, but, in some extent they have to be-

Carman Pirie: Gazely isn’t a word.

Jeff White: It is not.

Carman Pirie: Gazey, maybe it is.

Jeff White: Yeah, navel gazey. But, I mean, to some extent they have to be. You know, many B2B manufacturers do not have a direct connection to their customers, they sell through distributors or, you know, through outside sales or things like that. So they … Maybe they just don’t feel like they have the opportunity to actually talk directly with the end customers.

Carman Pirie: It’s harder to develop that feedback, at the very least.

Jeff White: Yeah, exactly. Do you have any thoughts on that, Z?

Krisztina Holly: Well, so I’m not a marketer, but I have seen a lot of companies, how they’ve engaged with the customer through that process, and I think … I don’t know what comes to mind at first. I mean, one is Intuit, for example, they have a whole customer development lab. I forget what they call it, but where they … It’s in a whole building where they’ll bring consumers in to play with different versions of their potential software and see … and different ideas that they have, and then react to that.

And so, I think that there’s no reason why just because you don’t have the direct link to the customer … It definitely is more challenging, but that doesn’t mean that you can’t get your customer to be part of that process.

Carman Pirie: Doesn’t mean it’s not worth going out, and investing, and creating that direct link, and finding a way to it, I think that that’s a-

Jeff White: Oh, yeah.

Carman Pirie: … that’s, I think, the important takeaway here is that maybe B2B marketers, rather than just being obsessed with delivering B2C experiences, should maybe be a bit obsessed in developing customer or buyer feedback mechanisms that are as robust as B2C brands.

Krisztina Holly: Yeah. Well, and I think that it also impacts … So, what does that mean next? So what’s the logical extension of this feedback loop, and this democratization of innovation as this … Everyone expects on-demand delivery now. Amazon has set this expectation with us, and I believe that long term there’s going to be more and more on-demand manufacturing. So, forget the warehouse, you actually got the factory that’s localized right near you developing these products. Depends on the product, you know, some products are easier than others to manufacture on demand.

So, I don’t know. Again, I don’t know about the B2B side of things, but there have been some examples of B2C, custom on demand that technically have been figured out, they’re figuring it out. It’s actually not the physical, it’s not the technology piece of it that’s the hardest, it’s going to be the human side of it, because I think it’s hard on the organization, this iteration process, and to let go of the reins, and to figure out.

Also, it’s hard on the consumer, or the customer. It’s like, how do you give them the tools so that they’re not overwhelmed with the choices, because you, as the organization, is the one that’s the expert. So, in the future, we need to figure out different, you know, sort of AI, big data, et cetera, that’s going to give the tools … just enough of the tools to the customer to be able to say, “This is exactly what I want, and I want it now.”

Jeff White: Yeah, wow. And I want to go back to something you just mentioned in there, you know, this idea that it’s hard on the organization to implement this level of agility. We know … I’ve given several talks in the past on implementing Agile within an agency, and one of the biggest questions that I get from agency owners and project managers is, like, how do I introduce this to my people so that they accept it as a better way of working, and that they don’t just see that a process is being forced on them? You know, I think it’s really interesting to try and think about how a manufacturing organization might think about that.

Carman Pirie: Oh, my goodness. If that’s the case for a … say, a 25, or 40 person, or what have you, marketing agency, and they’re-

Jeff White: Yeah.

Carman Pirie: … they’re struggling with change management, you can imagine a 5,000 person manufacturing organization where they would be.

Jeff White: Yeah.

Krisztina Holly: Yeah, no, it’s hard, and I think that we need to think about what the … Yeah, it’s definitely very challenging, because you need to put off the decision making. You need to be able to not focus on always having the answer right away, and you have to involve more people in the process, and you have to be more comfortable with ambiguity, which people are not comfortable with ambiguity. But that comes from the top, so that’s really a cultural change that needs to be patterned by the leaders in the organization, and that’s the most important piece.

Carman Pirie: Man, comfort with ambiguity does not seem to be how most folks would describe the C suite of American manufacturing organizations.

Krisztina Holly: Well, there’s so much of a focus on KPIs and, you know, understandably, you know, manufacturing has been really … There have been a lot of emphasis on becoming more and more efficient, especially because of … you know, we need to pull out as many costs out of the equation as possible because competition, especially overseas, can undercut the cost. But in the future I think that the agility and the … the kind of the creativity is where … And I don’t know … Is your audience mainly … Is it mainly in North America, or is it global?

Carman Pirie: Mainly North America.

Jeff White: But this is the internet.

Carman Pirie: Yeah. It’s 2019.

Jeff White: It can go beyond there.

Krisztina Holly: Yeah, I mean, regardless, I think that wherever you are you want to try to bring manufacturing local as much as possible, because it actually creates … it keeps the innovation local. It’s better for your own national security, because it keeps your means of production under your control. And it’s just a better … it’s better for manufacturing all around.

And so, I think that that’s where we have … But as North America, anyway, we have the advantage, is with those advanced technologies, with the creativity, and with that innovation and with trying to keep that here, for sure. Like, this is the way to do it.

Carman Pirie: I think it’s a real call to action that you’re putting out for our first episode of the new year, this notion of … that in order to really succeed in the future of manufacturing, that today’s manufacturers need to get much more comfortable with the unknown, more comfortable with ambiguity, and embrace that not everything is going to be reflected in the KPIs.

Krisztina Holly: For sure. Yeah, and I just think that there’s so much of an emphasis on cost cutting, cost cutting. And being an innovation person myself, and I’ve been that innovation person at a couple of universities where, you know, whenever there was a time when I had to deliver on KPIs, it became really hard for me to show the ROI on investing in innovative things. And so, then you end up cutting that innovation when you’re so focused on just becoming more and more efficient.

And the truth is that the second law of thermodynamics will tell you that being super efficient is the opposite of having that sort of nimbleness and agility. So, I think that if we really want to take advantage of that resilience, how … I might say, then we need to go up higher on the food chain, and go for things where creativity is really important,

And it’s already happening. So, there was a McKinsey back in October, there was a McKinsey study that came out for … they were interviewing global apparel manufacturers, and 80% of these manufacturers said that they plan to near-shore or re-shore manufacturing in the next few years because they wanted to have speed to market. They wanted to be able to respond to trends much more quickly.

So, there’s a huge advantage there, and I think … You know, you don’t … When you’re looking for a restaurant, your favorite restaurant, you’re not going to go for the cheapest, necessarily. Sometimes you want the best, or sometimes you want something that’s unique, or whatever. So, let’s take advantage of what we’re the best at.

Carman Pirie: Yeah, well the implications for marketers in the middle of that is vast, because of course, if you’re manufacturing closer to your customer because you want to be more responsive to that customer dynamic, that is, by its very nature, a marketing and sales decision-

Krisztina Holly: Absolutely.

Carman Pirie: … more than it is a production one. And that’s going to … it’s really, it’s going to call upon marketers to get much closer to other aspects of the manufacturing enterprise than they maybe have been in the past.

Krisztina Holly: Well, and it may also … I want to caution that I was talking a lot about comparing that to cost. There’s also a myth that it’s more expensive to manufacture locally, when in fact, when you look at the total cost of ownership, that’s not always the case either. So, I just … I want to make sure that I’m not falling into that myth, or, you know, reinforcing that myth as well.

Carman Pirie: Understood, and actually that was a lovely article that you had last year in Forbes surrounding the myths about manufacturing, and you addressed that one head on, yeah.

Krisztina Holly: Thank you, yeah.

Carman Pirie: And I thought as well it was interesting to just turn it on its ear a bit, where people talk a lot about the manufacturing jobs, and the difference between skill shortage and job shortage, et cetera. I think, in some ways, you know, it plays into what we’re talking about throughout this episode, where basically what we perceive to be the reality of manufacturing isn’t. I mean, when we started this podcast, there’s at least two people on it that wouldn’t have thought LA was the manufacturing epicenter of America.

Krisztina Holly: Yeah.

Carman Pirie: So, there you go.

Krisztina Holly: Well, that’s … Yeah, I just … I want to say that there are just so many myths about manufacturing, and I think that if we want to see manufacturing just as vibrant as it can be, I think that as a society we need to value it more. And a certain society … Germany values it a lot, of course, and Asia values it, of course, and it’s just the backbone of the innovation that we produce.

And we think of innovation as being all about digital and tech, you know, is in the digital side, and we really don’t think about … You know, and we don’t want our kids to be in manufacturing, when in fact there’s going to be potentially two million jobs opening up in the next less than decade because of the many different factors. And so, I think that there’s a lot of potential that we’re just missing.

Carman Pirie: It’s a lot of potential, and it’s an exciting time because of course, tomorrow’s manufacturing jobs aren’t the same as the ones 10 years ago, or several decades ago. It’s not the hard, physical labor that many people associate that with, which, of course, drives some of the attitudes that you were just mentioning.

And I think it’s an exciting time for marketers as well because this notion of product development, production, and marketing, and sales being more tightly integrated in the Agile manufacturer. My goodness, if we can get there over the next decade, I think it’s an exciting time for everyone involved.

Krisztina Holly: Yeah, and I think that the future, the skills … I mean, for sure there’s going to be a lot of STEM jobs out there, but with this new model where, you know, serious tinkering, and even looking forward to this custom on demand, design is going to be what it’s all about.

And so, I think that if folks in marketing were to bone up more on that, the empathy, the collaboration, and the creativity skills, those are going to be the most important key skills in the 21st century workplace, and those skills can’t be automated. We’re going to be working with other new tools, big data, automation, machine learning, it’s going to be a collaborative effort, but as long as we have those kinds of skills, I think that marketing is going to be really important.

Jeff White: Well, and marketers are going to need to know how to do pretty much the exact same thing with the content they’re creating, with the marketing strategies they’re developing, and with the work that they do in conjunction with sales, they’re going to have to be functioning in much the same way as what you just described.

Krisztina Holly: Yeah. Yes, definitely. It’s an exciting time.

Jeff White: It is, for sure.

Carman Pirie: Z, it’s been fantastic tinkering about serious tinkering with you today. Thank you for taking the time.

Krisztina Holly: Thank you so much for having me. Happy New Year.

Carman Pirie: Happy new year to you as well

Jeff White: Happy new year to you as well.

Carman Pirie: Talk soon.

Announcer: Thanks for listening to The Kula Ring with Carman Pirie and Jeff White. Don’t miss a single manufacturing marketing insight. Subscribe now at KulaPartners.com/TheKulaRing, that’s K-U-L-A Partners dot com slash The Kula Ring.