Episode Transcript
[00:00:03] Speaker A: Welcome to AINA Insights where prominent leaders and influencers shaping the industrial and industrial technology sector discuss topics that are critical for executives, boards and investors. INA Insights is brought to you by INA AI, a firm focused on working with industrial companies to make them unrivaled segment of ONE leaders. To learn more about INA AI, please visit our website at www.ina.AI.
[00:00:40] Speaker B: Hello and welcome to another episode of our Titanium Economy podcast series hosted by aina.
Today we are joined by one of the most respected digital leaders in the industrial sector, Anu Kari Ch, Chief Information Officer at Oshkosh Corporation.
Since Joining Oshkosh in 2018, ANU has led the company's digital transformation journey, building capabilities in Advanced analytics and AI, scaling Industry 4.0 and managing a full scale ERP transformation.
Under his leadership, Oshkosh's digital team has earned the CIO 100 awards seven years in a row and was a finalist for the 2021 MIT Sloan Leadership Award. Before Oshkosh, Anu held senior digital roles at Koch Industries and United Technologies. He holds an engineering degree from IIT Roorkee and brings over two decades of experience in tech enabled transformation. Anu, welcome to the show. Great to have you here.
[00:01:46] Speaker C: Thank you. Thank you for having me.
[00:01:48] Speaker B: Let's start with the show, focus on you and your personal journey. You began your digital career at Koch Industries in the early 2000s. What have been the most profound shifts in the digital landscape from then to now?
[00:02:04] Speaker C: Yeah, so I think that's a good question. The way I see, I see the evolution in three dimensions. One is on the value side, the second is on the intensity and third is on the risk side.
If I look at value side, the last 20, 25 years there has been tremendous value enabling technologies which has not only transformed our personal lives but also business how we conduct business. Starting with your computing and AI everywhere there are two major things which have happened which has touched everybody's life. Then the second part I will ask about, I'll say about digital intensity. I think organizations as well as individuals in our personal life the digital has penetrated in every area of our personal life from entertainment to sports to whatever we do. And same thing in the business side. I think it has penetrated in every aspect of the value chain. With that comes is a significant increase in the cyber risk area. So that has the intensity of cyber risk and the impact impact on the business has significantly changed. So Those are the three major dimension I see evolution in last only 25 years.
[00:03:27] Speaker B: So based on that and through that transformation you've Led multiple digital efforts and transitions. So in your view, what are some of the foundational ingredients of a successful digital transformation?
[00:03:44] Speaker C: Yeah, so I again the way I think about is I will say three things here. One is laser focus on value. The digital transformation has to connect to the business and it has to clearly align with the outcome which business wants to achieve. So that's the value alignment. The second dimension is the human centric.
[00:04:07] Speaker D: Right.
[00:04:07] Speaker C: And when I talk about human centric is the transformation has to go with the people. So I fundamentally believe in co creation and co creation of any solution with the business from concept stage to implementation and finally value extraction. And the third thing I see is mindset. We have been used to doing so big things like multi year, erp, CR and transformation, then we have forgotten small, small nimble approaches. So mindset of starting small and taking big leap. I think those are the three and my perspective, the ingredients of successful digital transformation.
[00:04:55] Speaker B: Great insight leveraging that and like shifting the focus to Oshkosh's digital playbook. At Oshkosh we have embedded digital intelligence across a range of value chains. So let's take an example of procurement. So when you look for what do you look for in smart procurement tools and then how do you measure its impact and success?
[00:05:18] Speaker C: Yeah, so I'll first share our philosophy here and then give a procurement example. So think imagine co centric circles, right? Three circles. At the core of it is a transactional system. For example you talk about erp, supplier portal transportation management system. So that's a core system built around. The second circle is about automation system.
Whatever these core systems are not able to achieve and humans have to still work. So we call automation system. So we build automation around this. And final circle is around intelligence system where we talk about how we can predict events. So that's our philosophy in all the, all the things. And we don't look at specific tool, we look at the overall approach here. So if we think, think from a procurement standpoint. Now if you look at from intelligence standpoint, we predict safety, stock, how much inventory we need to have. We predict economic order, quantity, what we need to order. We predict when part will arrive and when, what part shortages will be.
Based on that, we dynamically schedule our production.
We know inbound material, what is the logistics cost and what is the optimum routing. So I think if you look at entire procurement and supply chain, we have embedded in intelligence and we have made it much more productive and predictive.
So that's what we are doing in procurement and it is basically so exciting because we see here tremendous benefit because supply chain is what, 70, 80% of the cost of industrial sector.
[00:07:07] Speaker D: Right.
[00:07:07] Speaker C: If it is the most effic piece, you can run production more efficiently.
[00:07:13] Speaker B: So that's a great insight. And then transitioning from there from technology to the people side. So when you think about applying the manufacturing transformation is often blocked by legacy practices and knowledge. This is how we have done things.
So how do you help teams push through those barriers and adopt change, adopt new digital technologies and think differently?
[00:07:38] Speaker C: Yes, first of all, my fundamental belief that anybody and everybody can use digital and is willing to use digital. So I start with that mindset. Even if you whether like whether we have a legacy manufacturing or we have a very experienced workforce, I start with an assumption. So like in our case, what we have done is the first thing I did here when I came here, hired a couple of people from manufacturing who do not know much of digital, but they know manufacturing very well. And I hire them in my digital organization.
These are the folks who have relationship at the shop floor level. They're trusted and they have credibility but at the same time they understand manufacturing processes and have a curiosity to learn digital tools. So that was the step one. The step two we did is we did a multiple series of workshop at the local level, at the shop floor level through these, these talent. And what it has done is we have created a list of. We call it the inventory of problems at the shop floor.
[00:08:54] Speaker D: Right.
[00:08:55] Speaker C: And once we have an inventory of problems. So first of all, when shop floor people think that there are set of people who are here to listen to me, they understand my problem. And also we don't go with the project, we sell them possibilities. So in those workshops, in addition to inventory problems, we also focus on what is happening in the market space.
[00:09:19] Speaker D: Right.
[00:09:20] Speaker C: And we also did a showcase, we sought the help of some of the vendors and kind of a digital symposium where they can have a hands on view of the technology.
So those are the effort. So the trusted people and a process which is very inclusive and it is oriented towards their problems and finally is giving them hands on what is possible. I think those are the three things. Basically increase the intensity of adoption so we don't have to do change management. The change management happens naturally.
[00:10:03] Speaker B: So what you described taken together has helped Oshkosh transform and stand out in the factory digitization space. Leveraging digital AI twins and more. Can you walk us through how that transformation unfolded its journey and the value it's unlocked for Oshkosh?
[00:10:23] Speaker C: Yes. So if you look at the way we have done what I described before, how we engage our shop floor people in the in the digital journey.
Our journey from manufacturing digitization started with step one, solving individual problem.
So individual problem, I give an example. We have inspection, right? We don't focus on digitizing the whole. We didn't start with focusing on entire digitizing the plan. We focused on if there is a man inspection problem, can vision inspection help.
A simple problem that our the shop floor people had is we use so many tools and finding tools for the right job and right time is difficult. We used the digital asset location tagging on tools so that we can visually find the tools we had in one portion. There's a problem around maintenance of pumps and motors. We implement a SaaS based solution. So we did focus on individual problem and that created energy and momentum and we showcased that story. And when I say showcase, my team did not showcase the manufacturing people showcase their stories to the leadership. That led to the second phase of our transformation where we said end to end line transformation, end to end line transformation. And again our approach here was we focus on the margin, right? Which are the plants and which are the line, which are high margin lines.
And that's where we focus our. So we move from individual solutions to end to end line. And finally now in Greenfield plant we have a fully digitized manufacturing, right from the design itself. So our facility In Spartansburg for or U.S. postal Services is state of art, fully digital capability. And if digital systems blink for a second, we cannot have a manufacturing. So this is a evolution where you build the traction, you show the value, then people are willing to invest in a line when they see the value in that line. The throughput has increased, yield and quality has improved. The company is willing to put capital on a green field, full digitization. So that's the approach. We start small scale and then the transformation happens.
[00:13:03] Speaker B: You've got a bunch of successful transformations on the book. The next question is around other companies, other industrial companies that are just beginning their data journey, their transformation journey. How do you recommend they start when they come to building the digitization and advanced analytical capabilities like you implemented at Oshkosh?
[00:13:25] Speaker C: Yeah, I think the way I think through is the scent, like as I said approach about laser focus on value, right? Understanding the business strategy and understanding the business problem and starting somewhere versus trying to make a data program or analytics program that requires millions of dollars spent, justification, all that. I started my data journey with one data scientist, right? That was my journey. And now in the company I have roughly 64, 65 data scientists. So one data science is kind of a one step leading to a giant leap here and just solving the problem. The moment you see that you are there to solve their problem. The moment they say see that this technology is helping them.
Basically it is a contagious. Productivity is a contagious. Everybody wants to be more productive and this is looking for a solution. So my advice there will be is don't deliberate on it, just start.
And luckily we are at kind of that time frame in our technology life cycle that starting small is not expensive.
So you, you have a cloud and all the services are available at to start at a very cheap level and then you can scale so there's not a big investment needed. So that's what I will suggest is that's how I started and it has been working. So that will be my advice.
[00:15:06] Speaker B: Thanks for that. And in today's environment, tech environment, AI is getting a lot of attention.
It's just everywhere. But in your opinion, are there other digital technologies you see that are really making an impact in the industrial space that we should be thinking about as well?
[00:15:26] Speaker C: Yeah. So as you rightfully said, AI is pervasive. It is across all functions and manufacturing from our perspective, the way we are seeing is there's a lot of opportunity in industrials in manufacturing space.
[00:15:40] Speaker D: Right.
[00:15:41] Speaker C: And if you look at the common problems when manufacturing have. If we analyze common problem is a material movement like how efficiently you move material. We are using AGVs and AMRs for that.
[00:15:55] Speaker D: Right.
[00:15:55] Speaker C: You have a search problem, you have a maintenance problem, you have human digital instruction. Your workforce is changing and young workforce does not have. So how do you have a digital instruction manual?
[00:16:09] Speaker D: Right.
[00:16:09] Speaker C: So all those things, I think there are baskets of technology around manufacturing which are centered around augmenting humans.
And that's what we are using. But we are also looking from a future standpoint and it's not yet there.
And at a research level we are very excited is about humanoid and we see that will have a place for us. So we have started researching and educating our workforce two years in advance that what it is and what it can do.
[00:16:48] Speaker B: So in this evolving environment, a lot of research to figure out what's going to happen, what makes someone digital champion in an industrial setting and how is Oshkosh approaching this talent development to support this new digital future?
[00:17:06] Speaker C: Yeah. So we use the term digital champion largely in the context of our business workforce.
[00:17:15] Speaker D: Right.
[00:17:15] Speaker C: And the way we define is the digital champions are those who understand technology potential and where to apply. They don't know the technology and how it works. They know potential of technology and how to apply. So that's what we call digital champions.
The way it starts has started in our organization. It started with CEO setting the tone and leadership. Setting the tone and making a clear statement that tomorrow's leaders have to be digitally savvy leaders.
So I think that was the first thing was clearly articulating that this is a core competency tomorrow's industrial or Ashkash will need.
The second thing we followed up and backed up with that thing with a literacy campaign and we have structured instructor led plus online curated content for our workforce where they can learn and what we have done is these courses we have made context specific. So it is not a run of the mill standard. So you can connect with. Oh yeah, it applies to my area. Oh oh. I feel like it is relevant to Oshkosh. So we have, we have to do a lot of work around there. So that's the literacy campaign. And third thing is I said we co create with businesses so we work together from concept to implementation. When we do that, this is also on the job experience of digitization.
Those are the steps we have taken and we started with few and now we have more than hundreds. I will tell digital champions and who have become kind of an ambassador for creating a need for where to apply digitization.
[00:19:06] Speaker B: Well you've got a lot going on and a lot of champions so that transformation is well underway. Last question on AI. So in the value chain, where do you see AI having the biggest impact today and where is it still falling short?
[00:19:23] Speaker C: Yeah, I see a general statement is I think we are seeing we are applying AI across all elements of value chain.
But if I look at the focus, where our focus is is on the margin side, on the revenue side. So maximum application from a benefit standpoint is on the supply chain side and also on sales and aftermarket side. So this is where you apply and you get faster return. So that's the area mostly we have applied but we're doing engineering, we're doing manufacturing every other places. The area which I think industry is falling short and we are no exception is applying in the finance area where more on the SGNA side I think there's a tremendous opportunity for productivity enhancement.
[00:20:17] Speaker B: In closing, as someone helping shape the future of industrials, what's your outlook on digitization of the titanium economy as we call it and what gives you the most optimism about where this all is heading to?
[00:20:33] Speaker C: First of all, I have been in the manufacturing and industrial sector for my entire career. The way I see is it is a. It is a cool sector and why it is a cool sector because anything and everything the sector produces first it is a physical products which people can see. The second it impacts everyday's life, right? People's everyday life. So I I think that and reason I am mentioning that cool and excitement part is because that's the story helps us to hire and retain digital talent, right? Their work, what they delivered here has a direct impact and they can see right?
So I think the inflection point here will be is around labor shortage, right?
We know the growth of population is not keeping pace with the growth of need of the workforce in manufacturing largely sector. I think population will be one infection point and second is I think younger workforce want technology oriented workplaces, right? They don't want to work in the old manufacturing plant, they want to work in this. So I think it is a population and the workforce will drive digitization. It will become necessary for companies to do it. And finally I think business leaders are also coming to terms and it will only intensify that there's a real value in this.
This is no more a back end digitization is no more impact kind of thing. It is a front and center of conducting business.
[00:22:25] Speaker B: I really enjoyed our chat here. Anu. Thanks for sharing your take on the titanium economy and what's ahead for the industrials. Thanks a lot.
[00:22:33] Speaker C: Thank you. Thank you very much for having me here.
[00:22:42] Speaker A: Thanks for listening to INA Insights. Please visit INA AI for more podcasts, publications and events on developments shaping the industrial and industrial technology sector.
Sam.
