17: People, Process, Technology with Justin Goldston

26
Feb

Justin Goldston, a senior managing director at Nestell and Associates, a strategy consulting firm, and a five times TEDx speaker on emerging technologies. He is a Professor at Penn State University on Project Management and Supply Chain Management. We discuss how you can harness emerging technologies to grow entrepreneurial companies of any size.

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People, Process, Technology with Justin Goldston

Our guest is Justin Goldston, who is a Senior Managing director of Nestle and Associates, a strategy and management firm focused on digital transformations. He is also a professor at Penn State University on project supply chain management. He is also a graduate professor at Georgetown University. And Justin is a five-time TEDx speaker on emerging technologies, including blockchain and AI. So, welcome, Justin, to the show.

Thanks, Steve. Thanks for having me.

It’s great to have you here. And you’ve got lots of information I want to ask you about. The first one is, you know, this podcast is for small and medium-sized company entrepreneurs, entrepreneurial companies. And technology is kind of a difficult area for these small businesses, how to embrace it. So, in your view, how important is technology for small and medium enterprises? Is it really important?

Technology, in my opinion, is the one of the most important things for an organization, especially a startup, because it provides you with the visibility of your supply chain. It informs you of those decisions within to make those operational, those short term, as well as those strategic long-term decisions. And it creates that collaboration internally across your departments, as well as with your business partners, your customers, as well as your vendors. So, I would say that technology, yes, is indeed of the utmost importance. One of the most, in my opinion, one of the most important things within a small and medium enterprise.

The importance of technology in an organization, especially for startups, cannot be overstated. It's not just a tool; it's the bridge connecting the dots of decisions, fostering collaboration, and shaping the trajectory of success. Click To Tweet

So how does it help? Maybe this is a dumb question, so excuse me for that. But how does technology help you make better decisions in the practical sense for a private company?

So you’re inputting all of this data. You’re inputting data from purchase orders. You’re inputting data from sales orders. So your system, your ERP application, or your QuickBooks, or Excel, depending on what part of the digital transformation maturity you’re in, is going to inform you that it’s collecting data. It’s collecting data. OK, and if you’re performing that analysis, then you’re going to be informed of of decisions. So we have within machine learning, within artificial intelligence. And I’m getting a little ahead here, but I’ll put it in context.

It provides you with predictive analytics. So I so I can use tools. I can use the data that I’m inputting in through sales orders, through purchase orders to inform me of decisions that I can make, just like forecast, just like forecasting systems. I’m inputting that data to forecast what I need to purchase on a weekly basis. If I have weekly buckets or what I need to forecast on a monthly basis. So it’s going so that data, that data is being collected. You’re your employees are inputting that data on a daily basis. And you can analyze that data to inform you of the decisions, both from a short-term and long-term basis.

So that sounds great. But I mean, how do I input the data? That can feel overwhelming. I mean, CRM systems often don’t get used because salespeople feel like they don’t have the time to type everything up. ERP systems is the same thing. You have to input the data and then you have to manage the data. And then it’s kind of an investment. And what if you don’t get the return? Or how does it how long does it take to get the return? Or are there ways of inputting the data in a more user friendly way so that it’s not overburdening for a small company?

Yes. So there are processes there. I mean, the processes are out there. It’s referred to as business process automation. You’ll also hear of robotic process automation, but business process automation is in simple terms where I can map invoices, for example, right? And I can scan invoices. And because business process automation is mapped, it can pull data out from those fields that I’ve mapped and automatically input it into my system. So it’s, it’s, it’s automation. So we can, we can automate these processes.

A lot of organizations are automating processes now, and it’s not just for the big guys. You know, there’s, there’s business process automation tools out there for small, made specifically for small and medium organizations. So those, those business process automation tools are very helpful. They’re very helpful for invoices, for AR invoices, for AP invoices, for purchase orders. So for all of those repetitive tasks, there’s tools out there to automate those tasks.

In the era of automation, business process automation is the artist, turning the canvas of tasks into a masterpiece of efficiency, one automated stroke at a time. Click To Tweet

And are these tools easily accessible? I mean, is it a big investment, a big integration, or are they in the cloud applications that will do this for us or this hardware involved? What does it look like? Give me an example.

So a lot of these tools out there now are cloud enabled. They are kind of those SaaS solutions, if you will, where you would log in and you would work with the integrator to map those fields, you know, to whatever system you’re using. It’s low investment as it would be with an ERP application, much lower than an ERP application. The training is more compressed as opposed to an ERP application. And that’s why you’re seeing these offerings emerging.

With the pandemic, you have seen a big shift to robotic process automation and business process automation because plants were shut down, you know, and we had no choice. Some small and medium enterprises had no choice but to move to these solutions. You know, so we’re seeing a big emergence and the adoption of these solutions. We’re seeing because of the pandemic, we’re seeing a big emergence of vendors that offer these solutions. So with more vendors, the lower the cost. So you can say that that’s one positive output to the pandemic because there’s a number of digital transformation offerings coming out into the industry.

So, for example, what does the hardware look like? Can I use my phone to scan these purchase orders into the system or do I need to have a scanner? What does it look like?

So depending on the solution, there’s been a number of vendors out there where you can use your smart phone to scan it. Also, a perfect example. So back when I could travel, there were business process automation tools out there where I can sit at dinner, I can scan my receipt, right? And then that BPA tool, because it’s already mapped. I can hit a button, that BPA tool is already mapped, it’ll automatically transfer it into my expense report within my ERP application. As a user, I have to do nothing. I take a picture, I hit a button, it’s done.

Okay, great. So it’s like in the old days, maybe 15 years ago, you had these business card scanners where you could scan a business card and then all the data would go into the right place in the CRM, whatever. Yes. Kind of evolved from there. The same concept is just evolved and being more sophisticated, more reliable, I guess. So, Justin, you mentioned the term, which I really like to dig into, you say digital transformation maturity. I mean, it’s a mouthful, but what does that mean? And how can a small to medium sized business increase their digital transformation maturity?

I think that the most important thing to begin with is that when we say digital transformation, it does not, it does not solely mean technology. Digital transformation is the, is the, OK, where am I in terms of people, process and technology? Those three in technology projects, the most important thing that people don’t understand is that those failed projects are not because of the technology, it’s because of the people or the processes.

And so whenever I assess my digital transformation maturity, I’m going to say, OK, where are my people at in terms of this technology solution in which I’m proposing? Are they familiar with Excel or are they been just processing on paper their entire careers here? Right. You know, from a process perspective, do I have defined documented processes that I can easily transfer to this new technology solution? From a technology perspective, am I moving to this business process automation tool from Excel? Well, let me back up, from paper? Or am I moving it from Excel? Or am I moving it from QuickBooks? Or am I just kind of integrating it into my ERP application? Right?

So if I’m moving it straight directly from paper to BPA, yes, it can be done, but the implementation and configuration may take longer. If I’m currently using an enterprise resource planning application, an ERP application, then the adoption may be easier. So from a consulting perspective, whenever I’m working with organizations, that’s one of the first things I do, because that’s how I can essentially scope out the project. Is it going to take me a lot of training where I have to start at ground zero to train these people to say, okay, we’re moving to technology.

Here’s what BPA stands for. Here’s what business process automation stands for. Here’s what it does. And most importantly, from a people standpoint, I’m going to say this is not going to take your jobs because that’s one thing that terrifies employees within a small and medium manufacturing organization, process automation, robotic process automation, artificial intelligence, these ERP systems are going to take jobs. And I don’t like using the word artificial intelligence because we are years away from that.

We are in an age of augmented intelligence. So even those advanced small and medium entrepreneurs, those small and advanced startups, they’re still going to need the people. Even with the most advanced algorithms, you’re still going to need the people. So the people aspect is very important in that digital transformation, maturity, and assessing your maturity.

So it’s basically, it’s not about getting to the people. It’s about helping the people focus on higher value tasks, being more strategic, less routine, less boring, basically.

That’s exactly what it is. Taking away those repetitive tasks.

So that’s good news, I guess, because it means that our job’s going to get more interesting. It’s more challenging as well at the same time, but it’s more interesting. So that’s cool. So one thing I read in one of your papers that you wrote, which is the Agile mindset. So tell us a little bit about that. What does that mean?

So within like the project management world, we have our waterfall approach, which is our methodical approach. We have to do this step, this step, get completed. Then you also have agile, where it’s more of an iterative approach and that will allow us to what I refer to as pivot. We’re able to perform a process.

We’re able to configure a technology solution and release it. See how the users, get the voice of the customer, which is my users in my facilities. If there’s any changes that need to be made, let’s make adjustments, roll it back out, right? It’s an iterative approach, right? But with a waterfall approach, I have to do all these steps and within the ERP application, ERP implementation for example, it might be a week, a year and a half before I know if this thing is going to work or not. And if it fails, uh oh, somebody’s going to die.

It’s basically to be willing to take the risk and do a quick and dirty approach and get it tested by the market. And then you get the information back and you keep tweaking it. Is this the agile mindset? Is it is it the vulnerability that you’re willing to be imperfect? What is the agile mindset? I understand that what the agile process is, it’s basically you’re doing these sprints and you go to a minimum viable product and then you done another sprint and then you improve it. But for a privately owned business, how does that translate? Give me an example.

So I would say, so for start, so I do agile a lot in startups because we’re able to, because we haven’t proven out processes with a startup in some cases. So we can propose processes. We can roll out and implement those processes. And now we’re able to make adjustments before we have a full blown solution, if you will.

So for example, if I have a small manufacturing organization in North Carolina, I can, and I have, let’s just say hypothetically I have eight processes to build a product. I can roll out those four processes. I can establish those four processes. I can have the machinery for those four processes and I can run those processes and see how those four processes are have produced or have those how the output of those semi-finished goods.

And then I can make adjustments as opposed to a waterfall approach where I have to wait for all the machinery to come in for all those eight processes. Ensure that all of those eight processes have been have been defined, have been piloted, have been tested out. And now I’m now I’m six months down the road before I can actually run a single a single product, a single material. You know, so if I if I have an issue in that fourth process, it was after those eight processes are done. I could have I could have I could have tackled that months ago if I had an agile mindset because I was able to pivot and identify that process.

So does it mean that let’s say there’s a manufacturing process which have 10 major steps?

Yeah.

Does it mean that all 10 steps or maybe multiple steps can be tested simultaneously in an agile mindset as opposed to step two, have to wait for step one to finish and be correct until you do step two and then step three. Is this what it means? That one group works on step one, another group on step four, and they are taking their process when they are achieved an acceptable standard, then you put them together. How does that work in practice? Give me an example.

It could mean that. It could mean that. It depends on the product being manufactured. Right? So, all right, let’s use a smartphone. Right? I’m not even going to say the product. Let’s use a smartphone, for example, right? So if I have to, hypothetically, if I have to manufacture the housings for the camera, right? But in a traditional approach, a traditional manufacturing approach, I have to wait for the backing for the back to be manufactured.

I have to wait for the for the housings to be to be to be manufactured. I have to wait for the motherboard to be completed right before I do that. But with an agile mindset, I could be working on the back here. I could be working on the motherboard here or tweaking the motherboard here. They probably don’t make motherboards at Apple or Samsung. Right. Or and or I could have the housings over here. So I can have those processes working at the same time or being processed at the same time, as opposed to saying, OK, step one, complete. OK, move to step two. OK, step two, complete. OK, move to step three.

Step three, complete. But if I wait until those processes be done, and then I get to step six, where my housing is, and my housing is, my materials for my housing is not up to spec or quality or something like that, because I’ve uncovered that during the production, then I have a problem. But if I’m working on those processes in conjunction, that’s seen earlier. Now, I would say that some people, some people will call it at the agile process, you know, unstructured.

I’ve heard some people say that it’s reckless, but it identifies problems easier. You’re now more proactive in identifying those processes and remedying those processes. That’s why I’m a huge advocate of it. I know people have said that you can’t use Agile in ERP implementations, you can’t use Agile in manufacturing. But if you read the Agile, a lot of the books have come out in Agile, and it’s a proven approach. And I’m a large advocate of the Agile approach, especially in startups.

So, actually we use agile. So what I do is I help implement the entrepreneurial operating system, which is a management system in companies. It’s how you get people to work better together, to be more disciplined, to execute their vision. Accountable, yeah. And we use agile, we use the process as we call them ROCs. So every quarter we get together and we determine what the priorities are. And then every week we check in on those priorities that they are moving down the field. And at the end of the quarter, we are going to review and set new priorities. And they all become part of a bigger, maybe a one-year goal or a three-year goal broken down into quarterly chunks. So these are our splits, essentially. So would that be agile as well?

Absolutely. So do you use like kind of like a scrum mindset, if you will?

Pretty much. Yes. So we have a one-year plan and then we break it down to quarterly priorities. And then we execute on the priority and then the next quarter we go to the next piece. And often it takes four quarters of work to get to this one-year goal that you’re trying to achieve. So let’s say it could be implementing Salesforce. And then the first quarter may be just to design the specifications of that Salesforce implementation. The second quarter could be to implement the beta version. And then the third quarter could be to roll it out to the whole organization. And then the fourth quarter could be train everyone. That could be our fourth quarter, maybe agile process. Is this agile? Or that’s a waterfall?

That would be, in my opinion, that would be waterfall because that’s more of a waterfall phased approach because with an agile approach, you would be, so at the end of a sprint, you would be releasing something. You would be releasing workable products. So you would be releasing Salesforce, right? You would be releasing Salesforce in the first quarter, for example, right? You would build up, you would essentially build up all the functions in Salesforce you possibly could in that first quarter and you would release it to the users. Let them let them use it. Come back with come back with problems. You make modifications and while you’re still building this other solution, if you will, right, then you release those changes to Salesforce as well as the other solution within that next quarter.

So that’s what, okay, that makes sense. Yeah.

So it’s like a figure of your purchase, like a, like a phase waterfall approach.

Now, you could also make it agile if you said, okay, we fully implement Salesforce, but the most dumbed down version of it.

So you can release something.

And then people start to use it as a CRM. And then the next quarter, we are going to enable it to do an ERP functionality. Or maybe the first quarter is just going to be managing data of customers and then it’s a CRM and then it’s an ERP and then I don’t know, I think it’s going to be a sales projection system as well.

Right. So yeah, the key to agile is you’re releasing a working product. You’re releasing working, the true term, the working increments, increments of the final solution. Right. But I would say I will I will say that the reality when we talk about Agile in business is that I have yet to see an organization to have a true, pure, pure Agile project. Some people call it Agile Fall, right? It’s the hybrid version. Within higher education, we’re actually seeing research come out on it. We’re actually seeing research and peer-reviewed studies coming out on this hybrid approach, this hybrid project management approach, because you’re pulling things from project, from waterfall and you’re pulling things from agile. My wife’s a contractor for the IRS and they claim to use agile. No.

So, what are the risks of agile? So what are the cause, so to say, why people would stick with waterfall rather than agile? What is the downside of it?

So some people say that the size of a project would be a risk would be risky. Now, Agile, there are frameworks called Scaled Scrum. So Scaled Scrum is a framework designed for large projects for like thousands of people within our project. So there are frameworks out there for that. I would say that it’s risky if you do not have the correct work, the correct environment. Like if you don’t have, if you have a dysfunctional environment, Agile will not work. If you do not have a collaborative environment, Agile will not work because you have that shared accountability within Agile. There is no there is no such thing as a project manager in Agile. Everyone’s accountable. So if you don’t have that culture to support an Agile project, it’s going to fail. So maybe that’s kind of an advanced and evolved.

So, if your company, let’s say a company is good at the waterfall, they can set their quarterly rocks and they’re hitting their quarterly rocks, then maybe they can think about, okay, maybe can we take it to the next level with an agile implementation where we are fully interrelated and interdependent. We can count on each other that everyone’s gonna do their thing and we can do it faster. We can do more. So that’s fascinating. So let’s switch gears here. You also talk about Lean and Six Sigma implementation. So what would that look like for a private business? It’s Lean Six Sigma.

I do want to start off by saying that I will give you a short. I will start off by saying that people will hear the term Lean Six Sigma. And it’s actually two different things. It’s two different philosophies. It’s two different approaches. The objective of Lean is to reduce waste. The objective of six sigma is to reduce variation. OK, most approaches of lean cost very little. It costs resources and time. You know, it’s more it’s more of approaches is more of identifying areas that do not provide value for an organization. If it does not provide value, take it out. You know, Jack Welch Jack Welch kind of popularized lean within the industry, within leadership, you know, and he cut out process. He cut out a bunch of people too. You know, within GE.

10% every year.

Yeah, so Jack Welch popularized it, but I mean, lean works. And again, it’s as simple as if it does not provide value, take it out.

Process redesign was a new ad in the 90s that evaluated the process and you remove steps that don’t add value and then you cut costs and shrink.

So process maps and value stream maps are under that Lean and Six Sigma umbrella, right? Those are those approaches to identify, you know, waste, to identify variation. For example, value stream mapping would be if I take a process, I’m not going to do a value stream map for my entire organization, right? I’m going to do a value stream map for procure to paint. So I’m going to purchase the product. I’m going to map out. Okay, I purchased the product. I wait for the product to be received in.

For example, I received the product. I inspect the product, put the product away. I paint a vendor, right? All those steps. steps and so within that process I’m going to map out how long it takes me to perform each process and then how long the wait time is and how long I have to wait before that next process begins right I did that for each process with any organization with new organization.

So now I’ll map out the processes now I also map out the percentage of time that those processes are complete and accurate right so if I map that out I can see once that’s done, once that value stream map is done, I see very quickly where my bottlenecks are. How in the heck is it taking me two and a half hours to receive a PO confirmation, right? That’s a bottleneck. I’m going to eliminate that. I’m going to work on my vendor to eliminate that two and a half hours. That’s costing me money, right? I look at my purchase order processing.

My purchase orders are 60% accurate. That is horrible. What processes am I going to map out to increase the accuracy of my purchase order process? That’s costing me money. So that’s the six sigma piece? Correct. So I’m reducing that variation. So I’m going to do what we refer to as a domain approach, define, measure, analyze, and prove and control. I’m sure many of you have heard of that one. And that’s where I would, so very quickly, I’m going to define that, OK, I have a large number of errors in my POs.

I think that it’s 60% based on my measurements. So now I’m going to measure 50 POs, 15 POs, 50 POs, whatever it is. That’s the measurement, right? That’s the data collection. Analyze is where I do that data analysis. So I’m going to analyze really precisely how bad it is. Analyze. Okay, man, they’re only 55% accurate. So now I’m going to say, I’m going to say, but that’s the reality, to be honest, in some environments.

But now I look for ways to improve it. Okay, it’s 55%. Now I want to get it to 80%, right? I can’t change the world in one swipe. So I’m going to find one, I’m going to find ways to improve that process. Business process automation might be one of those, right? Because that’s going to reduce some of those errors. So let’s just say I propose to implement business process automation. So that’s my improvement phase. And then my control phase is, OK, my BPA is implemented.

Now I’m going to continuously monitor it. OK, now this is getting better. Now I go for continuous improvement. OK, now let’s hit 80%. Now let’s hit 85%. Now let’s hit 90%. So that’s how, that’s whenever you say Lean Six Sigma, because they’re molded together, because those processes are integrated. They’re two different approaches, two different philosophies, but they’re integrated together. Because I’m going to identify my waste, and I’m also going to reduce that variation within those PO errors.

So in EOS, we say that we want to identify the core processes. So it’s the mapping piece. Simplify the processes, which is trying to remove the steps that don’t make, don’t add value. And then you want to improve the process over time, which is essentially what you’re saying.

Continuous improvement.

That’s fascinating. Now I understand where this comes from. What about the blockchain effect? You also talk about the blockchain effect. How can that help an emerging private company blockchain? Is this something just for big companies or for, you know, Bitcoin traders? Or is this something that they can actually use in an emerging company as well?

So a lot of people, so I’ve been working, I’ve been working with a lot of blockchain startups, where they say we can’t say blockchain because it’s very taboo in the industry because people associate it with Bitcoin. So they think that it’s like unethical things going on because we’re a blockchain company. But in reality, blockchain is the technology that the Bitcoin and Ethereum is built upon. It has nothing to do, blockchain has nothing to do with cryptocurrencies.

It’s a technology that runs the cryptocurrencies pretty much. Right. So the importance of blockchain is that it increases the trust and that the larger the blockchain becomes and let me back up to say blockchain people will define blockchains as distributed ledgers but just think of blockchains as decentralized nodes these centralized computers okay and whenever a transaction so for example I create I cut a purchase order and if I put that purchase order on the blockchain.

Now everyone that’s within that blockchain network sees that. Or they can see that, let me back up, let me see, because some companies don’t want to show like their purchasing and where there’s a problem. They’ll see the source of that good. OK, so if I’m in aerospace, they can validate the source of that aluminum comes from the US, hypothetically. Right. So now everyone within that blockchain can say, oh, yeah, that’s right. But if somebody says No, no, then everyone watching says what? What do you think that we’re not right like immediately

The way I understand it is that it’s actually the opposite of centralized It’s it’s a big chance a lot. It’s a distributed Record keeping so every transaction that happens is recorded in many locations.

Yes.

And if there’s any discrepancy, you can check it to a hundred other locations.

Yes.

And you can isolate why it’s different and then you can deal with it.

So that’s why it’s almost, it’s very difficult. You can never say impossible. You can never say impossible. It’s going to be very, very, very, very difficult to hack or change. Cause that’s why you say it’s immutable. It can’t be changed. Because if it changes, if someone tried to change something, everyone sees it. And if I want to change it, or nobody sees it, I have to hack into all these hundred different computers to change it immediately.

That’s a good one.

You know? So that’s why it’s so powerful. And from a small and medium manufacturer, because consumers are wanting transparency, because consumers want to see the source of their products, because this modern slavery is becoming a big deal, because this green Washington is coming to big deal.

They want transparency and blockchain is a solution to that. Now, again, people say people think that blockchain is futuristic. No, blockchain is here. It is. It is not only for large organizations. As a matter of fact, I’m working with I’m working with a government organization called SESME. That stands for the Clean Energy Smart Manufacturing Innovation Institute. It’s funded by the Department of Energy. And they are doing what they refer to as democratizing smart manufacturing. They’re democratizing technology.

They are essentially trying to take the power away from the SAPs, from the Oracles, that’s going to lock in these small and medium manufacturers. So if I buy my Oracle ERP application, I got to buy every single offering that Oracle offers. So if I grow, I’m locked in the Oracle, essentially. Unless I want to take out this $1.5 million investment and go to someone else. But what SESME is doing, it is collaborating with manufacturers on innovative technologies that are available for everyone to everyone.

So, it encourages people to use open sources technologies,

Open source technologies, and they’re developing essentially. Think of it as an app store. It’s an Apple app store. So I can use a six Sigma application for marriage, for quality measures. I can use a blockchain application to put to put to put my my raw materials on the blockchain. I can use this marketplace to create smart contracts for my blockchain.

So for example, with smart contracts, that’s another blockchain solution where I can have, so if I’m food and beverage, and I have a vat, and I have a sensor, once that milk goes down and identifies that sensor, I can have that sensor attached to the blockchain, where it can create what we refer to as a smart contract, which is a self-executing contract, to say, okay, create this PO within my ERP system, which is automatic, right?

And because of the smart contract, that’s a contract between me and you. So I say, once this hits my sensor, I want you to send me 50,000 gallons, and I’m gonna pay you 100,000 like that. It’s a win-win, it eliminates payment terms, and it’s automated, and that can be done in a blockchain.

That’s amazing. Doesn’t it take too much resources to operate blockchain? I mean, you have all these computers all over the world that essentially record the same information, which means that every piece of information is multiplied a thousand fold. And then you have, in Iceland, you have these big companies that are essentially just generating energy to keep these computers running. Is this environmentally okay?

If you’re talking Bitcoin, no, because you have those, you have millions of people on the blockchain because they’re just, they’re mining, they’re trying to make money, right? In a true sense, a true sustainable sense, you’re only going to have about 50 or 100, you know, computers on the blockchain, you know, that are essentially confirming, reaching a consensus to ensure that these transactions are indeed correct.

There’s no need for thousands of computers.

There’s no need for thousands of computers. Now, I will say that in the future state, and again, it’s no need for thousands of computers. In the future state, I’m going to take my phone. I’m going to be at Whole Foods. I’m going to take my phone. I’m going to scan a QR code on an apple. I’m going to bring I’m going to bring out the whole food blockchain. And I’m going to see exactly what farm in Florida, I don’t know if apples are grown in Florida, in Florida, that this apple is grown at.

I’m sure they have them.

Right. So it’s a full it’s a full track and trace is that full history of that particular IT mall the way down to that lot number.

That’s pretty cool. So there’s no way to fake organic at that point.

Exactly. And that’s the power of it. And that’s why people want the blockchain. And that’s why it’s slow to being adopted. People have so much to hide.

The lobbies will slow it down. That’s interesting.

So perfect scenario. I forgot what country it was, but it’s somewhere in South America. They developed a blockchain application to track and trace transactions in a government in South America. They uncovered government corruption. The government shut it down.

So let’s move forward because there’s so much information you have here that would be interesting for us. Talk to us a little bit about AI. So how can I, as the CEO of an emerging private company, how can I use AI, leverage AI in my business to make myself more profitable, more productive?

So, AI, let’s just define what AI is. AI is not a robot. AI is not going to change the world. We’re not going to have robots. You know, I mean, you do, again, it’s augmented intelligence. Tesla has augmented intelligence. We are not. I mean, we’ve talked about light stop manufacturing back in the 1980s. We don’t have lights out manufacturing. That would be true. I write that would be true of true, true robotics.

AI is not about robots changing the world; it's about augmented intelligence, empowering us to shape the future through data-driven insights and predictive analytics. Click To Tweet

But artificial intelligence in the current state is where we are collecting large amounts of data and we are informing organizations of of the future. So that again, that’s where that predictive analytics comes in. That’s where so we’re seeing an emergence of predictive maintenance. So we’re using artificial intelligence on the plant floor to collect data of when that technician perform maintenance on that machine.

And we’re collecting that data and we’re using a to say, okay we think this machine is going to break down here. Based on all the history you gave me, we think it’s going to break down here, as opposed to my preventative maintenance. So there was a study that said that it was, I think it was a study by the Navy. It was the Navy or the Army. But they ran a study and said that the program, they ran a predictive maintenance, preventative maintenance, and they still had 80% machine, 70% machine breakdown.

So preventive maintenance was costing them money. But predictive maintenance will rely on artificial intelligence to collect that data and perform those algorithms. Because AI is nothing but algorithms to say, to predict when you need to perform maintenance on these machines. Another amazing thing that’s coming out with artificial intelligence is process intelligence. So I’m entering all this information into my ERP system. I’m entering all this information in my transaction and in my system.

Artificial intelligence can track any kind of discrepancies to say, okay, you have this process up in your system. This has been done 80% of the time. This is a 80% outlier from this. I’m going to change this. So artificial intelligence is actually identifying outliers and discrepancies, I should say. I used it wrong. Identify discrepancies in an established process and makes changes or proposes changes to a business process. So you’re pretty much those process maps and value stream maps we talked about. Artificial intelligence is creating that for you based on your user’s keystrokes.

Then it can improve it.

Can improve it. The continuous improvement I talked about is built-in.

That’s very cool. How can this practically be applied? Again, I’m running a business, $5 million revenue, I have 15 people or 20 people. How can I harness these technologies, specifically AI, to make my business better? Let’s say I’m a manufacturer or I’m a service business, whatever business service I provide, how can I improve it with AI?

There are, and with the current pandemic, there have been artificial intelligence. I will also say that you need to educate yourself on artificial intelligence and machine learning, because a lot of organizations are saying that artificial intelligence when they’re really just machine learning. Now, I would say that these AI programmers are not cheap. But there’s been a lot of organizations that have come out with solutions. So those solutions are getting cheaper.

There are organizations within the industry that will collaborate and cost here on developing an AI application. Again, SESME, there are a number. So they’re doing a request for proposals right now. That says that, again, if you’re able to invest one hundred thousand dollars in a process or a solution, our smart smart manufacturing solution that will have a clean energy implication that will have a sustainable implication, the government is going to give you one hundred thousand.

So within the last year, there have been a number of AI solutions that they’ve added to their marketplace. So again, if you check, if you, and it does not cost you, it does not cost an organization much to join, to join that consortium. I think it’s a couple thousand dollars, like five or ten thousand dollars, something like that. So again, you can pay five or ten thousand dollars and you can, you can have a solution that’s already been developed.

What about something that is very common? So you have these chatbots, which becoming more and more available. So how does a chatbot work and how can I use one in my business?

So you have, and again, it depends on what your requirements are. Again, there are those these chatbot, these chatbot solutions are coming out. There’s literally hundreds of them out there now. And they’re they’re very niche in that, you know, if you have a, you know, if you’re an aluminum manufacturer in the automotive industry, you know, they have those verticals, those checkbox, those checkbox verticals, if you will. So there are solutions out there.

And I would say for these emerging technologies, don’t reinvent the wheel. There’s solutions out there, there’s providers out there that will, that have solutions for you. So I would say, I would say that with technology, please don’t, please don’t create something from scratch because it’s already out there. Because I know a lot of us say that, a lot of us say that, you know, we’re different, but we’re all similar from a manufacturing perspective. There are solutions out there.

Now, I would say that these organizations, there are some solutions that are proprietary like the N4s and the Oracles and the SAPs. But again, there’s also product agnostic solutions where they’ve developed a number of APIs to pretty much integrate with most of the major ERP applications. So again, with the chatbots, for example, there are APIs in there to integrate with your solutions if you’re running the ERP solution.

It’s just like your Salesforce implementations you talk about. They have a number of Salesforce has a marketplace where they integrate with the oracles, the sales, I mean, the oracles and the and the net suites and the end boards and the SAPs. So these chatbot, these chatbots are out there. Infor has a good, great product that’s that’s product agnostic called Burst that that is a business intelligence, but it has it has AI capabilities. And it’s like it’s like it’s a series in an ERP system. It’s amazing.

And again, I did not work for these, I don’t work for any of these providers, but I evaluate these solutions and that’s a very good solution. QAD has an excellent artificial intelligence solution for forecasting. There is a company called John Galt. They have a forecasting solution that’s good, that they have a lot of AI enabled in it, a great solution.

So again, there’s, I would say last year was the great race in all these providers in integrating artificial intelligence in their solutions. So they have these solutions and a lot of them have created those product agnostic solutions because they know that they’re not, these small manufacturers aren’t going to implement a brand new ERP application. They just want that AI capability. So they have those product agnostic solutions for small and medium enterprises.

So if I run a consulting company and I want a chatbot, then someone has already developed a chatbot most likely for me, and I just have to buy that. And maybe I just replace the questions or I have a Q&A and I essentially put the Q&A into the chatbot.

Absolutely.

And I take care of talking to my customers.

Yes.

In most usual situations, they can handle, and then whatever is uncommon, we’ll just come to one of my customer service representatives to handle.

Yes, that’s exactly what it is. Chatbots are machine learning. They have all this data, they have all these Q&As that they have out of the box, and then you add your Q&A’s. And then for that, just like you said, for those answers, for those questions they can’t answer, they’ll go to your representative. But now it’s learning from it.So now it knows the answer.

So it gets updated and then it will be able to answer more questions over time?

That’s machine learning. Yes. So the more it doesn’t know, the more it learns and the more it stores that information. So I know that that’s so back in, you know, back in the ERP days before AI, you know, we would have things where we refer to as knowledge basis. And that’s all chatbots are. All chatbots are are essentially knowledge bases. And they learn, they learn from there. There’s data that’s continually added to it. And they’re continually learning from it, essentially.

Well, that’s very interesting. So lots of things to think about. We talked about the digital transformation in general. We talked about the agile mindset. We talked about lean. We talked about Six Sigma. We talked about blockchain. We talked about AI. So lots of opportunities for privately owned emerging companies to improve using these, leveraging these things. So here’s my question. If someone wants to learn more about these technologies. How can they find out more and could they maybe reach out to you and learn from you or you could put them in touch with other resources? Please give us more resources here.

I would say there’s a lot and you can find me. You can find me on LinkedIn, Justin Goldston. And in terms of the resources, especially on emerging technologies, on digital transformations and things like that. Because you’re going, I mean, I’ve actually uploaded lectures on YouTube just for my students, but you get lectures from MIT, you get lectures from UCLA, you get lectures from Wharton. And MIT is the leader on they’re developing a multi.

I forgot how many millions of dollars this this facility is going to be, but they’re they’re developing a facility only for artificial intelligence. It’s like 100 million or it was it was over 100 million. And it’s going to be a facility only for artificial intelligence. And they have a lot of a lot of information on YouTube for that. There’s a lot of information I share on LinkedIn. So I share I share most of my most of most of my content on LinkedIn because that’s where the majority.

So our listeners, they go to your LinkedIn page, Justin Goldston, and then they can find you on your LinkedIn page a lot of information. Yes. And they can go explore from there.

Yes, absolutely.

Okay, that sounds good. And your TEDx talks, where do we find? We just search your name on TEDx?

Yes. So if you go on TED.com, type in my name, Justin Goldston, and my TEDx talks will come up on the TEDx.com website.

Okay, fantastic. Well, excellent, very interesting information and lots to explore and improve and opportunities with the process and technology, as you said.

Yes.

So great to have you. Thank you for your discussion and for our listeners, please stay tuned for next week Thank you for your discussion and for our listeners, please stay tuned for next week for another interesting discussion.

Yes, thank you.

 

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