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Is Feudalism Is Preventing the Factory of the Future?

By Simon Jacobson | October 07, 2016 | 2 Comments

Industrie 4.0, smart manufacturing, and the IoT continue to paint ambitious images of manufacturing’s future.  Today manufacturers struggle to overcome their hierarchical legacies.  The concept of free market feudalism doesn’t jive with digital business.

Feudalism was a hierarchical political and social system prevalent during medieval times.  A King sat atop the hierarchy supported by Bishops and Barons.  Bishops were the King’s (religious) advisors and Barons reported directly to the King ruling large regions of land called fiefs.  Barons divided the regions into smaller plots or local manors which were managed by a Lord. The Lords were expected to manage these fiefdoms and uphold specific financial and military service levels for the King.  Lords also were responsible for managing other details including villages, crops, and peasants.  Peasants were the majority of the population and ranged from blacksmiths to bakers and often worked long days.

Eventually feudalism deteriorated.  Economic systems based on the amount of land one owned gave way to monetary-based systems, governments became centralized, and trade expanded across villages.  The decline has parallels to the rise digital business.  The blurring of the virtual and physical worlds continues to spawn new business and economic models as ecosystems of interactions between people, businesses, and things continue to evolve.  Trade continues to expand across geographies and product portfolios continue to transition as individualization and solution-oriented focuses are in the vanguard.

Digital business has lit the “manufacturing transformation” fire.

Conventional manufacturing models are transforming and transitioning as manufacturers fine tune their ambitious future-state visions.  International companies must become global organizations and “global orchestration, local execution” is an all too familiar refrain.  Production systems are being refreshed and redeployed and technology investments are reinvigorated by the IoT, cloud computing, and advanced analytics, and cognitive solutions.

While technology advances a large majority continue to govern their manufacturing operations as if it were medieval times.  Although the supply chain is King, too many factories are manors comprised of various fiefdoms spanning management, engineering, production planning, quality, and other functions.  Incentives for sites to improve—or optimize—performance might be set in isolation further reinforcing fiefdoms.  The result?  Factories might increase flexibility and improve service levels but at the consequence of creating constraints or cost and complexity in other areas of the supply chain.

Manufacturing cannot automate its way into the digital future.  Non-digital dimensions such as organizational structure and performance management must evolve in lockstep with technology.  Reporting structures need to be revisited.  Manufacturing operations is not always in the supply chain organization’s span of control and in other instances plants are still treated as individual profit and loss centers.  Role descriptions must be redefined—The Lord of the manor must evolve to have a customer service focus and the remit of the lean practitioner is changing, too.  Not to be overlooked are the operators.  Far from peasants but often treated as such they too must be enabled with new skills and autonomy for decisions.

The Factory of The Future is as much a supply chain strategy as it is a manufacturing strategy.  Abandoning long term strategy in favor of quick wins isn’t acceptable anymore.  Our Maturity Model for Manufacturing Excellence provides a path for creating a stable foundation that bridges the divide between aspiration/innovation and core competency.   Whether you are a King, a Baron, a Lord of the manor, or a Peasant, the challenge is being laid down:  As your organization (re)defines and (re)aligns the manufacturing strategy, can you topple your fiefdoms?

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  • Kristin Kelly says:

    Totally agree Simon. Interesting historical note that I think I’m remembering correctly. The Palace of Versailles was called Louis XIV’s “Golden Cage.” He built it in part to centralize the feudal lords and bring them under his control. What’s the industrial equivalent?

  • Dave says:

    Simon, I think you hit the nail on the head with your second-last paragraph. Those are the areas I’ve seen cause the most significant drag on any transformation effort. I think transformation will struggle to succeed if it does not address those key behavioral and cultural factors.