What if Your Assembly Line Was Replaced by Lines of Code? An interview with Kevin Espinosa

In this episode of “What If? So What?,” Jim chats with digital strategist Kevin Espinosa about the evolving landscape of manufacturing. Drawing from his diverse career experience, Kevin discusses major challenges facing the industry today, including supply chain issues, inflation, and labor shortages, while highlighting the transformative potential of connected products and the IoT. The conversation emphasizes the importance of customer-centric strategies, clear corporate goals, and cross-enterprise collaboration in navigating digital transformation in manufacturing.

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Chapters

• 0:05 Manufacturing's Challenges and Digital Solutions
• 13:31 Navigating Manufacturing Challenges Through Technology

Transcript

Teaser: 
Kevin Espinosa - Guest

00:05

I mean in the manufacturing world there are three kind of big things that are still playing. Supply chain is still there. That's not really a pandemic thing anymore, you know. It's kind of adjusting itself and a lot of that. There's the supply chain inflation. Inflation is a big factor in manufacturing right now that the cost of goods everywhere, you know not only for us eating out in grocery stores but for the manufacturing in parts and components, is really expensive and we're all starting to feel the cost of that. And the other thing is labor. There's a 2-million-person shortage in manufacturing to do the job. You know as much as that. Manufacturers are trying to automate. There are still more jobs than we can fill. 

Jim Hertzfeld - Host

00:48

Welcome to What If? So What?, the podcast where we explore what's possible with digital and discover how to make it real in your business. I'm your host, Jim Hertzfeld, and we get shit done by asking digital leaders the right questions What If? So What? and, most importantly, Now What? Hey, I'm really excited to have one of my colleagues on the show today, all around, good guy, Kevin Espinosa. Kevin, welcome to the podcast, great to see you today. 

Kevin Espinosa - Guest

01:13

Thanks, Jim. It's a privilege to be on your podcast. 

Jim Hertzfeld - Host

01:16

Hey, Kevin, we've known each other for quite a while. In fact, I had a couple of meetings with you when you were on the client side, and you don't remember me, so I feel bad about that to this day. 

Kevin Espinosa - Guest

01:25

I didn't want to say that to you. I don't remember that. Who's this guy? 

Jim Hertzfeld - Host

01:28

But anyway we have an interesting shared history that goes even beyond our working relationship. We kind of came up in the ranks both as electrical engineers working in automation and I always thought it was interesting when I learned that about you. But yeah, tell us a little bit about what you're doing here, but I really want to know kind of what brought you here. 

Kevin Espinosa - Guest

01:46

Yeah, Jim, to answer that question, I'm really going to start from the beginning and try to say it fast enough that it doesn't take up the whole time. But, like you did mention, I am an electrical engineer, started my career at Caterpillar and I was testing gears and components, like at the tech center, and I thought that was going to be the rest of my life. Right? To have a pocket protector and, you know, be that engineer for the rest of my life. But I think the cool thing about large companies like that is there's so many opportunities. Next thing, I know I'm actually setting up Alan Bradley's to do the test, yeah. And next thing, I'm writing an Oracle databases to collect the data. Next thing, you know, I get a call and say, hey, do you want to work on some of these dealer applications? I'm doing dealer applications, then I'm doing dealer operations. I'm doing service operations reviews. So I'm flying all over the North America to understand how dealers do service operations. 

02:39.

And I always had my eye on cat.com. I was like I want to own cat.com and I did. So that was kind of my entry into like digital marketing and then my scope kind of expanded from there, from catcom, social media and then owning the whole digital marketing infrastructure. So, I love that at where I was at, Caterpillar. But then, you know, as I got to 55 years old or so, I'm like I want to try something new, like I want to be on the other side. I want to take all my learnings and take it to other companies, other manufacturing companies, other B2B companies, and that's when I made the jump to Perficient. So, at Perficient, I work for you, a digital strategist, a digital strategist in your group. We all have our own superpower and my superpower is manufacturing and B2B. I really understand that world from my past experience and that's what I apply to our clients now. I love it. 

Jim Hertzfeld - Host

03:35

That's awesome. I love that, obviously. I love that story. I kind of had a very similar path. I remember engineering school. Like, you know, I'm going to invent something someday, I'm going to change the world and, you know, you're building things, whether it's a business process or a point of view or a design. You know, I think there's just something in the engineering mindset it's the builder's DNA, right? You take a vision for something and then you have to make it happen. So, I love that about the culture we have here. But your focus is on manufacturing. I know we talk about this a lot. 

04:07

Manufacturers do a lot of things, right? I know not only do they build stuff, they have factories, you know they manufacture things. So they have to get really good at taking raw materials in and on one side of the building and putting products out on the other, but they also have to design those products. They have to understand the customers in the first place, to figure out what they want. You know some organizations, even manufacturers, I think for a while some of the larger manufacturers, they really made their money on financing, right? And some manufacturers today are really kind of like marketing and brand companies. They look at like what Nike's doing. They're kind of a brand company. And then yet, even further, some manufacturers have become service companies, you know. So their core business is providing services or insights, or value added consulting on top of that. So that's a lot right, and I think a lot of traditional businesses have to do a lot of things. They have to be good at a lot of different things. Digital, by the way, is one of them, right? So what do you think is today top of mind for manufacturers? Like, what are most manufacturers worried about from your perspective? 

Kevin Espinosa - Guest

05:13

I mean, I've listened to a lot of your podcasts, Jim, and I think a lot of your guests are spot on. I think one of the things that they hit on right away is the customer. I think that customer first, no matter what business you're in, is top of mind for every company -manufacturing, financial, retail, etc. It's all kind of the same game, but how do you do it right? And some of them, like B2C companies, did it way before manufacturing companies and you know, the question that you ask has so much disparity in manufacturing. 

05:50

One thing that I've learned being on this side of the consulting side is like manufacturing companies are all the way from A to Z on their maturity. I'm like, oh my God, this company really needs help with their customer experience or the digital marketing capabilities. I was not aware there was such a gap like that. So, you know, I think, to answer your question, it's all about the customer and I think the magic is how do you do that? There are so many ways that you approach that. I can start all the way, like you said, on the manufacturing floor, and that you can differentiate yourself with the product. You can differentiate yourself with the experience. You can differentiate yourself with services, and so I think manufacturing companies and all companies right now have to decide who am I? Am I a brand company? Am I a product company? What is going to be my niche that's, going to differentiate myself from the competition?

Jim Hertzfeld - Host

06:47

And so you know we're in the business of answering all those questions with some sort of digital solution, right? First of all, I think you're going to agree with that, right? But the solution itself, it's not just throwing technology at it, right? So, what are some of the things you have to think about besides a mobile app or a website or a connected product to do that? 

Kevin Espinosa - Guest

07:09

Yeah, I think the most important thing is what is your strategy? Is it going to be aftermarket services? So, if it's like aftermarket services, how are you going to get that done? You're going to sell more parts, you're going to sell more service. But really what is the outcome, and I'm going to carry through that example aftermarket services? Is it selling more parts? Is it selling more service? Are you going to do that online? Are you going to do that more face-to-face? 

07:37

So, having really that concise strategy that you're trying to pull through in the company, and I think what’s really important is having that strategy but carrying that through everybody. My previous work that I did, the corporate strategy, was carried to everybody and if your goals didn't align with that strategy, then you probably shouldn't be doing that activity, whatever it happened to be here. So, you know, understanding what that strategy is in the company and pulling that through. And then, like you mentioned, it's not technology, but then at that point you can start thinking about what solutions, what technology do I apply in order to differentiate yourselves, and there's a lot of things that you can do at that point, Jim. 

Jim Hertzfeld - Host

08:20

Yeah, I think a lot of companies struggle with that strategy, right? I mean, sometimes they want all the information so I can't do anything until I know everything, and so they get paralyzed, they get stuck right, but other times they just can't get consensus on the strategy or they don't know how to get started. Are those universal problems, do you think? I mean, that was a problem in your history, but you see it with other clients as well. 

Kevin Espinosa - Guest

08:43

Oh yeah, and I see it now with clients and I think that goes all back to leadership. At the point where there's a strategy, there needs to be a critical few in the executive office. That's kind of saying what our strategy is from an enterprise perspective and then it kind of trickles through the rest of the company and that's where you get great leaders like yourself that apply that strategy to your group and the other parts of the executive office carry it through their group and we're all kind of rowing and marching together to accomplish that. So it is, I see, kind of a big problem, I would say, in corporate America where you don't get that leadership and that saying this is our strategy and this is what we're going to work to - super important to have. 

Jim Hertzfeld - Host

09:27

You think, and I'll challenge you on that a little bit just being the devil's advocate here, right, because sometimes we just don't know. Like there's uncertainty, right, there seems to be shorter planning horizons. Since we can't predict the future, we'll just create this agility right in our business, and digital can make your business very flexible. Right, we can have microservices. Architecture will allow us to change our mind whenever we want to. I feel like a lot of organizations go down that road, like hey, I just gotta be ready for anything. I mean, there's some value to that, right, but at some point you have to just go or you're gonna get passed. 

Kevin Espinosa - Guest

10:01

I agree. I think the agility, the flexibility really comes in the solutioning side, right. So strategy at kind of the top of the pyramid, Jim Hertzfeld type goals in the middle of the in the... 

Jim Hertzfeld - Host

10:15

Wait a minute. That needs clarification. What's a Jim Hertzfeld? 

Kevin Espinosa - Guest

10:18

Oh, you have goals, and then I would have goals. 

Jim Hertzfeld - Host

10:22

TV on Friday night, is that right? 

Kevin Espinosa - Guest

10:23

No, you have goals that align to the strategy. I'd have goals that align to your strategy within our group, but then you would trust me to execute that goal right, and it could be done in numerous different ways. Right, maybe it's a new platform, maybe it's artificial intelligence that does it, maybe it's some other tool set, but at that point, you know, that's where the flexibility, the velocity kind of comes in the business world. 

Jim Hertzfeld - Host

10:50

I would say yeah, I mean I say this a lot too. I know if anyone's a fan of American football. In the NFL, the Patriots, the New England Patriots, have like their tagline or their slogan, which is “do your job,” and I always liked that. I'm not the biggest Patriots fan, but I like that idea because everyone has to consider their individual contribution and then do that job. So if my job is to snap the ball, be the best at that, right, that's my goal. My job is to throw the ball, to catch the ball, to block, to run the ball. That really stuck with me. And, by the way, I hate overusing the sports analogies, but they're just too relevant. I think that's what you're getting at, like if everyone has their part, understands their contribution to the team, plays their part, does their job, then you know that's a way of just making forward progress. 

Kevin Espinosa - Guest

11:36

I love that, Jim. I mean, I think it took me a while. You know, when you're young and you think you know everything, you think you can kind of lead it all by yourself as you go in your career, you quickly learn that it takes a village. And when I led a division at Caterpillar my team was so important and I never said, you know, I was the manager of digital marketing capabilities. I always said I'm on the team right, because I was just another team member that made things happen and so that is so important to a business. 

Jim Hertzfeld - Host

12:08

I like that a lot. I know that when manufacturing as well, you know it's in my sort of perception or history, it may have been one of the earlier industries to sort of embrace globalization, so we started building factories in Asia or Mexico or overseas, you know there was sort of early what we called offshoring back then. Yeah, you know that certainly continues today and there's a lot that's been written about that. But did you guys run into that in your history, in your manufacturing history? Does that your job kind of mentality? How did that translate globally? You know, and I think that's the norm today. But do you think manufacturing sort of led the way in terms of globalization?

Kevin Espinosa - Guest

12:48

I do right. I mean, for all the right reasons, the company that I came from definitely had to have globalization. One is to meet customer expectations, right? We had customers all over the world and we had to have globalization in order to meet their needs. So we had to understand the customer, we had to work in their ways, we had to understand their culture. But from a business perspective, we actually had to have plants all over the world that meet the supply. 

13:17

Right? Didn't make sense to make wheel loaders or some of the product in the United States and ship that stuff all over the world. S,o you eventually have plants that made sense to meet the supply, and so I think that's how a lot of it really happens. Now, Jim, I will say that you know, onshoring is a movement and I wouldn't say maybe not as much in some of the big plant things. You know they're not moving where they're making wheel loaders or not making big things like that, but the supply chain when it comes to parts and components and things like that, there is a big onshoring movement that's coming and, as you know I think you hate this word a bit the pandemic did kind of have its movement in how we do things and watching your last podcast, commerce, like it really accelerated commerce and I would say the pandemic had a big impact on manufacturing and direct to consumer. All of a sudden, I think that a lot of these companies kind of figured out like man, we need to really learn who our customers are, we need to get closer to them and we should probably be selling a little bit more of our product direct to consumer, because it was really really difficult to do that with all the handcuffs we had during the pandemic. So, you know, there were some things that really changed the way we do business and that was wonderful. 

Jim Hertzfeld - Host

14:37

Yeah, no question, I'll clarify that. I just I'd like to think that the pandemic was like a hundred year flood, right? So once in a lifetime seismic change in the way we do things. I think there'll be more seismic level changes. I just thought for a while there, we got to stop talking about it, you know, but was there something else to talk about? 

14:56

You know, I think we're still feeling the downstream effects in industry, but some of that is a word we hear about a lot, which is resilience. I think that's driving some of the, That's kind of driving some of the onshoring is, if you're offshoring, then you're suddenly dependent on both the supply chain networks, and so by onshoring it's a little bit of a resilience play to make sure that you're not, you know, 95% of your product is not coming from Taiwan, right, for example. 

Kevin Espinosa - Guest

15:22

I mean in the manufacturing world there are three kind of big things that are still playing. Supply chain is still there and that's not really a pandemic thing anymore, you know it's kind of adjusting itself and a lot of that you know. There's the supply chain inflation. Inflation is a big, you know, a big factor in manufacturing right now, that the cost of goods everywhere, not only for us eating out, in grocery stores, but for the manufacturing in parts and components, is really expensive and we're all starting to feel the cost of that. And the other thing is labor. Like there's a 2 million, just in the US, a 2 million person's shortage in manufacturing to do the job. You know as much as that. Manufacturers are trying to automate. There's still more jobs than we can fill in manufacturing. So that is kind of a big pressure. Those three things are big pressures in manufacturing right now. 

Jim Hertzfeld - Host

16:17

What are you seeing in terms of out there, in terms of, again, really specific, maybe emerging, I think I know how you're going to answer this, but in terms of emerging technologies or new adoption of digital technology, where are the leading companies in your mind hitting those challenges head on? How are they doing it? 

Kevin Espinosa - Guest

16:34

What are they doing out there to get ahead of those issues, those hard wins? I mean I would say I'm probably not going to answer this like you would expect it right off the bat, but I will get there. I think the biggest thing that is in the world is the first version of it was called the internet of things, right, and now you and I call it connected. So I think, just from a consumer perspective, a lot of us know what connected products are - your thermostat, your doorbell, your security system, your TVs, like everything's connected - I think that is a huge enabler in how some of these companies are meeting head on with the challenges that they have. Why? Because those connected products create just tons of data and I think at first a lot of companies didn't know how to really handle that data, but now, with things like artificial intelligence, like another tool set that you can put on top of all of that data to understand it, because in the past, I think, they just had so much data they didn't know how to absorb it, and the other thing is they didn't know how to monetize it. 

17:49

There's a lot of things that you can do with the connected product. You can control the product, you can optimize the product and then you can make the product autonomous. All of a sudden, a lot of these products don't even need touched anymore because we have so much remote control through that connected product. It's like it can just sit by itself and do its thing. When's the last time you actually physically touched your thermostat? You don't right? Like you may be sitting in your chair, you're a little hot, you're a little cold, and you make the adjustment there. Again, you've heard this story a million times. My thermostat in our place in Florida, the renters jacking around with it. They lower it down to 67 and I'm like no, you don't,, 70 degrees, it's in our book. So there's all this control. So that's from a consumer perspective. 

18:36

But then you have the manufacturer side and they have so much optimization that they can do on the plant floor because of the connected product. And so now it means something entirely different. Their manufacturing processes, their control, their robots, they're connected and you know again, they're taking all this data. They can optimize all those robotics and machines on the plant floor and do a much better job. And there's other things that are happening from that perspective. They can run predictive maintenance on those machines. They have less downtime on the assembly line, which is super important, safety, and that just kind of goes on and on. So I think that to me, connected is one of the biggest movements there is, and there are all kinds of adjacent things to that artificial intelligence, 5G, etc., that support that. So that's huge. 

Jim Hertzfeld - Host

19:32

Yeah, you know, I think in most podcasts, Kevin, the answer would be automatically AI, right? So I'm glad you didn't open there, cause I agree with you. But you know you're kind of saying what we've been saying about our AI strategies and recommendations quickly decompose into a data strategy, right? So we know that to have the other data and content structured, non-structured, you know for the AI, you got to give it something to work with. So, yeah, I think it's one of the most exciting parts of manufacturing. 

19:58

And I'll go, I'll throw us all the way back to our origins, because one of my really early Alan Bradley projects when I was at Whirlpool, you know, was to, - this is so crazy. No one will get this like you'll get it, but I was measuring the chain stretch, okay. So in a lot of factories, things are moved by chains and you have to manage that and they stretch out and you have to change the link and so on. That was one of my little assignments - how do you retrieve that data, collect it and utilize it? So, it was pretty rudimentary, right, you had to get really creative. 

20:30

So this is a pretty exciting time where the sensors and then what you can do with it is pretty cool, and I think we heard recently we were talking to a client, Kevin, about, you know, there'll be more connected products and people. I'm pretty sure we passed that a long time ago, but that's a pretty exciting move. And I think not even just manufacturers right, cause this connected concept has implications in healthcare and even in insurance, and when you stop to think about it, you know a lot of applications across industries. 

Kevin Espinosa - Guest

21:00

So yeah, Jim, my toothbrush, my Oral-B is connected, so just want to let you know that. 

Jim Hertzfeld - Host

21:08

Right, you’re very connected. So Kevin, I just would kind of a final question for folks, and some of them would like to ask, maybe a two-parter but what would you do different looking back on? And I want to ask you this, because you have such a history, you've seen and done so many different things. Looking back on it, what would you do differently? 

Kevin Espinosa - Guest

21:23

Oh man, I don't know if I've ever been asked that question, Jim, I think. 

Jim Hertzfeld - Host

21:28

Join our team sooner? 

Kevin Espinosa - Guest

21:31

I think, looking back at things, I would do a much better job working through the enterprise. So, I owned all digital marketing capabilities and I think sometimes I worked in my own little tools like AI, and using it for this tiny little BU or these tiny use cases are gone. You name the tool. I just happen to pick AI. I think the first thing that a wise manager would be is how am I going to use it? But how am I going to scale this across the enterprise and carry it through all other types of businesses? So, me like, since I had such a big job, I think I would have done a much better job educating the enterprise on everything that I did and I think we would have got a lot more value out of that tool set. 

Jim Hertzfeld - Host

22:40

Yeah, that's interesting concept and that kind of boils down to me like there's knowledge management and then back to strategy. Because if you're all kind of marching up to the bigger strategy and kind of understand where you're going, then you have a better sense of, you know, not just how you're contributing but how everyone's contributing. Right? So advice for so, especially for manufacturers out there. If contributing Right, so advice for so, especially for manufacturers out there, if you're in a manufacturing organization today and again you're trying to, maybe you've got a lot of lessons learned. What advice would you give a listener who maybe is about to head out on the shop floor or about to head out to a dealer or a field sales office? What would you share with them? 

Kevin Espinosa - Guest

23:18

Well, I mean, I think back to my point about you know there's tons of maturity levels right now in manufacturing. So, whether it be shop floor, whether it be in their digital marketing capabilities, etc., is, you know, kind of understand your pain points, right? What are my pain points that I'm having right now that are keeping me from getting my job done right? And so from there, I think that once you kind of brainstorm and look at those pain points, you can identify, you know, what are those goals that I want to have that will take us, this company, to the next level. And so, having those goals, those like really tight, smart goals, focus on them and then create the solutions. 

24:02

Don't think about technology first Thinking about those solutions. What is the best tool to do that? And then again, I'll kind of summarize what I just said - bring in the enterprise to help you with that solution. Right, it's never too early to kind of bring in the CDO, the CTO, the CIO to help you out with that solution. So that is kind of my advice is attack what you need to attack to make the enterprise better. That's what you need to look at. 

Jim Hertzfeld - Host

24:29

You're kind of alluding to something we both love, which is OKRs - objectives and key results - which today I'm going to rename objectives and Kevin's results. So, all right, Kevin, this is great. Thanks for sharing so much, Thanks for being part of this team. And hey, we got a meeting later on, so be ready for it. Yeah, thanks. 

Kevin Espinosa - Guest

24:47

See you guys. 

Joe Wentzel - Announcement

24:51

You've been listening to What If? So What? a digital strategy podcast from Perficient, with Jim Hertzfeld. We want to thank our Perficient colleagues JD Norman and Rick Bauer for our music. Subscribe to the podcast and don't miss a single episode. You can find this season, along with show notes, at Perficient.com. Thanks for listening.