About two-thirds of industrial automation projects fail due to organizational readiness and customer maturity issues rather than equipment problems. Machine builders can avoid becoming scapegoats by recognizing warning signals during sales, declining risky projects, and helping customers follow a proper transformation sequence: stabilize, optimize, automate, digitalize, then intelligence.
- Roughly 70% of industrial transformations fail, with technology rarely being the bottleneck—the real constraints are organizational readiness, supply chain stability, maintenance capability, and data readiness.
- Warning signals visible during sales include customers who don't trust their baseline data, lack clear end goals, have misaligned budgets, or show no commitment to the extra R&D needed.
- Companies typically skip rungs on the technology ladder by leaping directly from unstable processes to automation or dashboards, resulting in faster chaos instead of improvement.
- Machine builders should act as the adult in the sequence by writing process-capability preconditions into proposals, offering readiness audits, and pricing stabilization work upfront.
- The shift from selling equipment to selling outcomes—through data transparency, subscriptions, and ramp-up support—earns trust and delivers better margins for OEMs and faster performance for customers.
Altix Consulting, Yannick Schilly
Unlike most transformation books, this one draws its examples from machine building and automation. Schilly answered questions about what the book means for packaging machinery builders, who sit on both sides of its thesis. They have to transform their own companies, and they are often blamed when a customer’s transformation stalls.
OEM: In your experience, how often does an underperforming automation project fail because of the customer’s organization rather than the equipment?
Yannick Schilly: About two-thirds of the time. The technology is rarely the bottleneck. The real constraints are organizational readiness, product maturity, supply chain stability, maintenance and technician capability, and data and digital readiness. One chapter of the book opens with the most expensive robots I ever met: eleven of them, latest generation, standing still. They were waiting on late material, unstable upstream quality, and a schedule nobody trusted. The plant manager’s verdict: “We automated before we stabilized. So now the chaos runs at machine speed.” Nothing was wrong with those robots; they met every acceptance test. And maturity is perishable. Larger CPGs often bring it, but it varies widely from site to site even within a highly mature company. Three to five years under the wrong site leader can quietly destroy the fundamentals: 5S, TPM, standard work, OEE, and culture.
What signals tell an OEM that a customer isn’t ready, and when should a machine builder decline the work?
The organizational signals are visible during the sales process. Nobody on the customer side trusts their own baseline data. There is an engineering or IT owner but no line owner whose number moves. Sponsorship consists of a kickoff appearance, and maintenance is discussed only as a cost. The commercial signals are just as telling. There is no clear end goal for the automation, or difficulty aligning on specification, or a Cadillac expectation on a Chevy budget. The level of customization and novelty amounts to a science project, with no customer skin in the game for the extra R&D. You have had a negative past experience with the same customer, and nothing fundamentally has changed. Or the project is low to no margin from day one, leaving risks unbuffered even in the best case.
Should you decline? Re-sequence first. Sell the stabilization phase, and phase the contract. But when several of these signals stack up and the contract makes you the scapegoat, walk away. A signed order that ends in arbitration is not revenue.
The book’s technology ladder runs stabilize, optimize, automate, digitalize, then intelligence. Where do customers skip rungs, and what can the OEM do about it?
The ladder is broken in the same place almost every time. Companies leap from an unstable process straight to automation or dashboards, because the later rungs are exciting and fundable and the earlier ones are humble and hard. The cost is precise. Automating an unstable process gives you faster chaos; digitalizing it gives you real-time visibility of faster chaos. The OEM’s role is to be the adult in the sequence. Write process-capability preconditions into proposals, offer a readiness audit before the order, and price the stabilization work you can see the customer needs. One honest caveat: machine builders span the same maturity spectrum as their customers, and a builder still fighting its own stability cannot credibly sell sequence. Climb your own ladder first. It is the most convincing sales reference an OEM can own.
What should machine builders design into equipment and contracts so customers can use the OEE and condition data their machines generate?
Three design rules first. Ship context, not just signals, meaning machine states, reason codes, and loss categories a line team can act on. Make data open by default at the machine edge. And present it at the point of use, where operators see their own numbers. On contracts, the base production data belongs to the customer, full stop. That openness is precisely what earns the trust new business models stand on. What you sell on top is the intelligence: benchmarking, predictive analytics, and digital coaching of the customer’s team as a subscription, plus uptime partnerships where your revenue is tied to their output. Add ramp-up and stabilization support through resident engineers, and you have the shift from selling iron to selling outcomes. The builder gets better margins, and the customer gets faster time to performance.
Many packaging OEMs have grown by acquisition. What does the book offer leaders integrating several acquired machine builders?
The book’s capstone chapter is itself an acquisition story. The Jinan plant arrived with a purchase, complete with a die-casting shop so distrusted that our own group refused to buy from it. I’d suggest four disciplines for serial acquirers. First, buy right. You are acquiring a winning team, not just an order book, so retain it and let it keep running its winning formula, now with a larger ecosystem of customers, suppliers, and talent behind it. Second, integrate the operating system before the brands, with one way of running, standard work, and a daily management rhythm made explicit across the houses. Third, run the integration as a ruthlessly sequenced masterplan, a drumbeat of banked results rather than a hundred parallel initiatives. Fourth, name a transformation architect who owns the integration system itself, reporting directly to the CEO. Common scoreboards first, common branding last.
The Four Clocks measure how long a company takes to become aware of a problem, decide, act, and recover. Schilly suggests a mid-sized OEM read its clocks against market signals such as a key customer’s capex freeze, and measure recovery against its last real downturn. Readers can take the free Superfit Score diagnostic at superfitcompany.com.ALTIX Consulting, Yannick Schilly
During the Jinan turnaround, what did you need most from equipment suppliers, and where did suppliers make the job harder?
Presence and honesty. The suppliers who mattered put engineers on our floor, in our shifts, gave us honest lead times, trained our people in their own language, and treated spare parts as a commitment rather than a profit center. Under an environmental sanction and a clock nobody believed, a supplier’s realistic “six weeks” was worth more than a hopeful “three.” Suppliers made the job harder when they sold new equipment as the answer to problems that were ours, proposed automation for processes we had not yet stabilized, diagnosed remotely from two time zones away, and change-ordered every deviation instead of solving it. In a customer’s hardest hours, you are either part of their operating system or part of their noise.
What’s your advice for packaging machinery leaders?
The next decade belongs to the Superfit OEM: commercial excellence up front, cross-functional design and integration excellence behind it, and standard work built on standard module platforms. Superfit also means selling fitness along with iron: educating and training your customers, and accelerating their ramp-up and stabilization until your machine performs in their plant the way it performed in your FAT.
The Superfit Company: Why Industrial Winners Never Stop Transforming by Yannick Schilly (Altix Press) is available in hardcover (ISBN 979-8-9970398-0-6), paperback (ISBN 979-8-9970398-1-3), and ebook through Amazon (direct link) and major online booksellers. A free diagnostic, the Superfit Score, and a companion toolkit are at superfitcompany.com.
