Opening keynote on our Let's get 'phygital' event (24/10/2019). Learn from Trevor Miles (Supply Chain thought leader) why we should equally focus on the transformation within digital transformation.

1. LET’S GET
PHYGITAL

2. The
Productivity
Paradox
Being Digital vs. Doing Digital

3. Nice to meet you!
Trevor Miles
Supply Chain thought leader

4. 4© 2019. Miles Advisory. All rights reserved.
Robert Solow (MIT, Nobel ‘87), 1987
“You can see computers everywhere, except in the productivity
numbers.”
Robert Gordon (Northwestern), 2016
“First came the Great Inventions, almost all dating from the late
19th century. Then came refinement and exploitation of those
inventions — a process that took time, and exerted its peak effect
on economic growth between 1920 and 1970. Everything since
has at best been a faint echo of that great wave, and Gordon
doesn’t expect us ever to see anything similar.” – Paul Krugman
(Nobel ‘08) in review of Gordon’s book
Productivity Growth Rate: David Rotman, “The productivity paradox”, MIT Tech Review, 06/18/18
IT Spending Growth Rate: Josh Greenbaum, EA Consult, Dec, 2018
2.5%
1.9%
5.4%
How much has the huge investment in IT improved productivity?

5. 5© 2019. Miles Advisory. All rights reserved.
Because we have been
digitizing our
data,
but not our
processes

6. 6© 2019. Miles Advisory. All rights reserved.
The structure of
work still hasn’t
changed
100years
70years
50years
The structure of
work didn’t
change
The structure of
work did change
The structure of
work didn’t
change
“First came the Great Inventions, almost all
dating from the late 19th century. Then came
refinement and exploitation of those
inventions — a process that took time, and
exerted its peak effect on economic growth
between 1920 and 1970.”
CAGR = 2.5%

7. 7© 2019. Miles Advisory. All rights reserved.
What problem should we
be solving?
Modern workforce with old tools
and paper-based processes
doesn’t make much difference

8. 8© 2019. Miles Advisory. All rights reserved.
New tools with old rules
don’t make much
difference
What problem should we
be solving?

9. 9© 2019. Miles Advisory. All rights reserved.
What has Elon Musk/Tesla really changed?
???
BATTERY
MANUFACTURING
CAR ELECTRONICS
ASSSEMBLY OF VEHICLES
DISTRIBUTION OF
FUEL/ELECTRICITY
BATTERIES
SELF-DRIVING
CARS/AUTOMATION

10. 10© 2019. Miles Advisory. All rights reserved.
What has Elon Musk/Tesla not changed?
THE RULES OF THE ROAD, AND HENCE THE FLOW OF TRAFFIC

11. 11© 2019. Miles Advisory. All rights reserved.
What does Elon Musk/Tesla really want to change?
THE RULES OF THE ROAD, AND HENCE THE FLOW OF TRAFFIC
Reduce bottlenecks
Speed up flow
…
Why? How?
Stop doing inefficient things
Do different things
…

12. 12© 2019. Miles Advisory. All rights reserved.
Informational Decisional Interpersonal
Jackson, S., Wilson, J. R., & MacCarthy, B. L. (2004). A new model of scheduling in manufacturing: Tasks, roles, and monitoring. Human factors, 46(3), 533-550
ROLE
>>50% <<25% <<25%
It’s not only HOW we do things, it’s
also WHAT we do
EFFORT
IMPACT OF
AI

13. 13© 2019. Miles Advisory. All rights reserved.
The .05 to 5 Rule
Most products and many services receive value for only .05 to 5 percent
of the time they are in the value-delivery systems of their companies
The 3 / 3 Rule
Waiting time has 3 components
– Completion of the batch
– Completion of the batch ahead
– Making and executing the decision to send the batch to the next step
The ¼ – 2 – 20 Rule
For every quartering of time required to provide a service, labor productivity
and working capital can often double, leading to 20% reduction in costs
The 3 x 2 Rule
Growth rates of 3x the industry average with 2x the industry profits
are achievable for companies that focus on time-base competition
Boston Consulting Group – Rules of Response – George Stalk, 2009
THE COSTS OF SILOED, CASCADED PROCESSES
THE BENEFITS OF NETWORKED, CONTINUOUS PROCESSES
What is the value?

14. LET’S GET
PHYGITAL