The Future Is Now: Deloitte’s Stephen Laaper On How Their Technological Innovations Will Shake Up The Tech Scene

As a part of our series about cutting-edge technological breakthroughs, I had the pleasure of interviewing Stephen Laaper, Smart Manufacturing leader and principal, Deloitte Consulting LLP

Stephen is a principal at Deloitte Consulting LLP and a manufacturing strategy and smart operations leader in Deloitte’s Supply Chain & Network Operations practice. He helped build Deloitte’s Digital Supply Networks (DSN) methodology that uses existing and “next gen” technologies to drive efficiencies in operations and across the supply chain. Stephen is leading the firm’s Smart Manufacturing services, including the 2021 opening of The Smart Factory @ Wichita, a groundbreaking, immersive learning environment for business leaders to experience smart manufacturing solutions.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit about you. Can you tell us a story about what brought you to this specific career path?

Can you share the most interesting story that happened to you since you began your career?

Interestingly enough, it wasn’t that long ago! In the early months of the COVID-19 pandemic, we were in the initial stages of developing Deloitte’s Smart Factory experience to demonstrate the power of Smart Manufacturing Transformation to our clients. Before the country-wide “stay at home” orders started in the U.S., we were hosting our in-person client experiences in the applied engineering laboratories on the Innovation Campus of Wichita State University. Then, suddenly, everything changed: all our employees and clients were working from home, and we didn’t know when we’d return to the office.

Undeterred, I had various teams within Deloitte ship all our small-scale manufacturing equipment (including “desktop-sized” automated equipment and several robots) that we used in these laboratory experiences to my house and set up a makeshift “television studio” in the barn on my property. Within a week, I had set up both the manufacturing equipment and audio/video equipment (including studio lighting and four cameras that allowed for various views of our demonstrations!). However, I had a challenge — I needed multiple people to operate the equipment while I ran the meetings and demonstrations. So, I enlisted the help of the people in my household: my wife ran the cameras, my 10-year-old son executed the audio/video switching, and my 11-year-old daughter served as my on-screen “materials handler.” The kids understood how important it was to my work and I’ve never seen them so nervous, but I couldn’t have asked for a better team to help me pull it off! Our Zoom call attendees were also confined at home with their families and were delighted to see that I got a 10 and 11-year-old to play along. This setup quickly evolved to become the basis of inspiration for many features of The Smart Factory @ Wichita. I’m not sure if the whole experience motivated my kids’ plan to go into studio production, but they played a big part in our journey (and hopefully learned something new along the way)!

Can you tell us about the cutting-edge technological breakthroughs that you are working on? How do you think that will help people?

It’s no secret that the past few years have been tumultuous for most organizations, and manufacturing is no exception. Companies have been responding to numerous challenges — the COVID-19 pandemic, increasing demands for products amid a volatile supply chain, global economic issues, reshoring initiatives, and more — and many are still relying on outdated technology and systems to power their operations.

And while there’s recognition in the industry that evolution to true end-to-end smart manufacturing is a must-have, at the same time, it is challenging for an organization to put a robust, complex architecture in place.

In response, Deloitte saw a huge opportunity to bring together an ecosystem of world-class solutions and technology providers in a cutting-edge environment. We built The Smart Factory @ Wichita, an immersive experience center situated on the Innovation Campus at Wichita State University, to help organizations navigate their biggest challenges. The Factory exposes them to real-world smart manufacturing concepts that bring together the Industrial Internet of Things (IIoT), cloud, artificial intelligence (AI), computer vision, and more to create interconnected systems that use data to drive intelligent actions.

Our goal with The Smart Factory @ Wichita is to show organizations what’s possible when it comes to end-to-end smart manufacturing.

As part of the experience, we showcase smart manufacturing’s connection to sustainability — because what’s the future without considering our impact on the planet? Our facility itself is a net-zero building, powered by a renewable energy smart grid. We have everything from wind trees and solar panels outside the facility to smart lighting inside the building. The components of STEM kits we produce at the factory use 100% recycled polyethylene terephthalate, known as rPET, collected from the local recycling stream as the primary raw material, bringing the circular economy to life.

How do you think this might change the world?

According to a Deloitte and Manufacturers Alliance report, in the U.S. alone, 86% of manufacturers believe that smart factories will be the main driver of competition by 2025. Smart manufacturing, as showcased at The Smart Factory @ Wichita, can help organizations improve operational performance to compete with lower-cost manufacturers while at the same time improving customer experience. As needs become broader and more complex, smart manufacturing helps organizations adapt to changing demands and gives consumers more visibility into products with the increased level of transparency they have come to demand during the pandemic.

Thinking beyond the facility itself, smart manufacturing operations can change the world in many ways — including helping build supply chain and business resiliency. This is a topic we often discuss during our tours at The Smart Factory @ Wichita, as it’s top of mind for many businesses, especially considering the challenges spun up by the pandemic over the last few years. As supply chain challenges continue to impact organizations, manufacturers can use smart manufacturing technologies to better sense and react to demand changes. This can also provide better data and more visibility into supply chains to help manufacturers gain more flexibility and resiliency. For example, manufacturers can adapt processes to deal with upstream disruptions and alter processes to ensure quality products.

Additionally, a Deloitte and Manufacturing Institute study shows that nearly 83% of manufacturers say attracting and retaining a quality workforce is a top challenge. The manufacturing skills gap in the U.S. could result in 2.1 million unfilled jobs by 2030. While many struggle to fill current open positions and fix the talent pipeline, smart manufacturing solutions can enable organizations to provide better opportunities for their employees and attract new talent with a better work environment. We’re addressing this on the ground through our applied learning students from Wichita State University as we seek new and creative ways to help organizations with the incredible challenge of finding new ways to attract and develop talent.

Keeping “Black Mirror” in mind, can you see any potential drawbacks about this technology that people should think more deeply about?

Potential drawbacks of technology go beyond the technological. For example, when you talk about advances in manufacturing, some people wonder what that means for jobs. In truth, the advances are about augmenting human intelligence, not replacing it, and leaning on technology to make human working conditions safer and more efficient.

At The Smart Factory @ Wichita and elsewhere, building trustworthy technology is a major focus for Deloitte. We created our Technology Trust Ethics Practice to lead in understanding issues like bias, privacy, manipulation, and more. We’re convening dialogues about these topics and building a consensus that safeguards must be built into new technologies from the beginning.

In addition, while tech ethics are incredibly important to The Smart Factory’s operations, so is sustainability. Smart manufacturing is of no use to society if it isn’t built to work with nature and foster clean energy use for years to come. That’s why being net-zero is a point of pride for us. Organizations can look to The Smart Factory @ Wichita as an example of sustainable, ethical manufacturing.

Was there a “tipping point” that led you to this breakthrough? Can you tell us that story?

Our impetus came from an understanding that the ability to scale smart manufacturing technology has arrived, both in how we create it and use it. Many people use the power of a smartphone as an informal standard. Everything your smartphone can do today was possible 30 years ago — only back then it would have filled a room (or maybe even a factory!). A big part of what is different now is that it is in your pocket.

Parallel shifts in scale are transforming manufacturing. The industry has worked to keep pace with advances like lean manufacturing, Six Sigma, etc. These used to be the edge of productivity innovation; now they’re bedrock. The cost and scale profile of what’s possible today are opening a new productivity frontier, and we need to build on that bedrock to evolve our practices.

In more concrete terms, there’s a gap today between how manufacturers see the potential of smart manufacturing and what they’re doing to understand and harness it. One Deloitte study found that 83% of manufacturers believe smart manufacturing will transform the way products are made within five years, but only 30% are working on it, and only 5% are “doing” it today. When we saw that gap, we knew the way to close it was to go do it — to be the “first mover” who integrated all the disparate advances.

The next 18–24 months will be a critical “tipping point” for the manufacturing industry as it recovers from supply chain constraints and becomes faster, smarter, and cleaner. With consumers and businesses demanding goods more quickly, the manufacturers who adapt their operations to prioritize change will come out on top, while those who don’t will lag. Deloitte’s research with The Manufacturer’s Alliance found that top strategies for mitigating supply chain risk over the next year among manufacturing executives include:

• Strengthening existing relationships (83%)
• Pursuing multiple and regionally diverse suppliers (81%)
• Relying on digital supply chain tools for increased visibility into their supply chain (76%)
• Moving from “Just-in-Time” methodology to “Just-in-Case” (65%)

What do you need to lead this technology to widespread adoption?

Everything businesses need is built into the structure we’ve created because The Smart Factory @ Wichita is built to lower the barriers between innovation and practice. This isn’t a lab operating at some distance from industry — we have real companies in here working side by side on the challenges they bring to us. When they leave here, it’s with learnings, plans, and new ideas ready to make a difference in daily production.

Our operating model is meant to spread seeds like this across the industry without making people wait for whitepapers, IPOs, or demonstration projects. We just go. Ideally, we’re fostering a growing network of fast followers. That’s reflected in our organization as well. This is a collaborative consortium in which Deloitte serves as a hub for the ecosystem, not as a sole actor. The shortest answer is that our technological innovations don’t need some external force to lead them to widespread adoption because they’re built to be adopted widely from the start.

What have you been doing to publicize this idea? Have you been using any innovative marketing strategies?

In many ways, our Smart Manufacturing ecosystem is the marketing strategy because when we bring together world-renowned players who create their own buzz every day, we elevate the credibility and extend the reach of what we are doing together. The wide net we’ve cast to bring this initiative to life — from academic institutions like Wichita State University, a team of purposefully selected highly disruptive start-ups, to some of the biggest names in technology are being used to engage audiences interested in many different aspects of what The Smart Factory @ Wichita and Deloitte’s Global Network of Smart Factory facilities around the world have to offer. This way, instead of leaning into a narrow audience, we’re touching many at once.

None of us can achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

There are so many people in my past and present who have both shaped who I am as a person and prepared me to be a leader: First and foremost, my parents instilled core values of compassion and hard work, my incredible wife keeps me grounded, and the leaders I work with at Deloitte are excellent collaborators and guides.

Early in my journey, two people also deserve a special mention: While I was an undergraduate student at Purdue University, Professor Bill Szaroletta guided my early interests in industrial automation, which motivated my curiosity and inspired me to pursue a project like The Smart Factory. In addition, Larry Oglesby taught me how to balance the rigor of high-speed business consulting, starting a family, and being a working parent.

How have you used your success to bring goodness to the world?

I’ve always tried to find ways to stay connected to my local communities and help those in need. I’ve done this throughout my adult life by serving as a firefighter and paramedic. Making business decisions brings one type of intensity and implications but impacting someone who may be having “their worst day” is quite another. The contrast between the two provides me with a perspective and balance that has helped me improve both in my roles as a leader at Deloitte and as a first responder.

What are your “5 Things I Wish Someone Told Me Before I Started” and why. (Please share a story or example for each.)

Some things must be experienced to become part of your core fabric of who you are; here is what I learned along the way, rapid-fire:

• Balance is key.
• Combinatorial innovation sits at unexplored functional intersections. Pioneering leaders find these intersections and cultivate them.
• Everything has a season — you can try, but you can’t do it all at once. Plan it out.
• Everyone puts their pants on the same way.
• Keep the greater good in mind.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

We believe strongly that the future of manufacturing includes educating and empowering the next generation of makers to help alleviate the growing talent gap in critical STEM-focused areas.

In line with its commitment to philanthropy and STEM education, The Smart Factory @ Wichita helps produce and distribute a Smart Rover kit to help middle school students learn about product design, coding, and engineering.

Through our Smart Factory Believers Program and ecosystem, we aim to reach 800,000 students in the U.S. with the Smart Rover kit and STEM education programming over the next four years.

Initial donations have already begun in underserved communities of Wichita, Metro Detroit, and Philadelphia. Our network of middle school educators who bring our donations to life in the classroom is crucial to this.

Indeed, there is still more to do, and I’m incredibly proud of Deloitte and the leaders who tirelessly championed this to become a reality, including Nishita Henry, Dan Helfrich, Michael Gretczko, and Brian Umbenhauer.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Keep your eyes on the stars and your feet on the ground” is my favorite quote. I believe it’s important to strive for greatness, push boundaries, and continue to reach for what may seem implausible today to create a more impactful tomorrow.

This quote reminds me of what I want to achieve and helps me remember that it is very important to remember where one comes from, as well as consider the people that are part of my journey and impacted by the choices one makes along the way. I believe this balance is paramount to long-term sustainable success.

Some very well known VCs read this column. What would you say if you had 60 seconds to pitch to a VC? He or she might just see this if we tag them :-)

A considerable part of my role is to help individuals and businesses see the benefits of smart manufacturing. I would say that smart manufacturing builds supply chain and business agility, a critical factor in the age of unexpected disruptions. Manufacturers who can adapt processes to deal with upstream disruptions and alter processes to ensure quality products will win in today’s and tomorrow’s business landscape. Manufacturers should consider investing in smart manufacturing for three reasons:

First, to address talent issues. As manufacturers struggle to fill open positions, smart manufacturing solutions can enable organizations to be more resilient, make better use of their people/employees and attract new talent with a better work environment.

The second reason to consider smart manufacturing is to improve the customer experience. As customer needs become broader and more complex, these technologies help manufacturers adapt to changing demands and give consumers more visibility into products with the increased level of transparency they have come to demand in the pandemic.

The last consideration is around competition. Smart manufacturing can help organizations improve operational performance to compete with lower-cost manufacturers.

The Smart Factory @ Wichita helps organizations more clearly envision what is possible, but ultimately, it’s up to every manufacturer to decide which investments are suitable for them. A trusted advisor like Deloitte Consulting can help identify which business areas to prioritize.

How can our readers follow you on social media?

The best way to follow me is on LinkedIn. You also can see what’s happening at The Smart Factory on Twitter and Instagram: @SmartFactoryX.

Thank you so much for joining us. This was very inspirational.