At face value, Lean 4.0 Production Systems is a skillful combination of Lean and Industry 4.0
Why do that? What’s the value of bringing these two together? Aren’t they both transformations? Aren’t they both looking to do the same thing; to do more with less?
These two initiatives are not at odds with one another, rather they are complementary and together deliver mutually beneficial outcomes.
Lean 4.0 is a methodology and thought process to ensure processes are ready to leverage Industry 4.0 technology and codify processes digitally for true business transformation. If you digitize a suboptimal process, the output is still suboptimal, it’s just digital with added cost. To realize sustained benefits from a digital transformation, you cannot take a siloed approach with technology.
Success is found in the focused convergence of people, process and technology.
Lean is a powerful set of tools, but it only covers people and processes. It had a good run in the last two decades. Major companies around the world saw its value, quickly adopted their own version, and drove it within their organizations. The Bureau of Labor Statistics shows that Multifactor Productivity improvements from 1990 to 2005 were 1.2% on average annual improvement. However, from 2005 to 2018 it was only 0.44%.
That means, despite all the efforts of Lean, technology, and automation, productivity gains have reduced to 1/3 of the previous rate. Multifactor productivity reflects overall efficiency with which labor and capital inputs are used together in production processes. It is truly an aggregate level of efficiency -So why did it drop?
In our experience, technology has been implemented without driving meaningful bottom-line improvements.
We need to approach Industry 4.0 differently so that that we can finally drive meaningful productivity and efficiency gains.
With Industry 4.0 involving the intelligent networking of machines and processes for industry as well as existing information and communication technologies, it can be difficult to know where to start.
“How and where do I start?”
Should you start with cloud computing, IIoT, machine learning, mobile, live data systems, autonomous tech or robotics? The journey is not clear.
If you choose one, exactly how do you implement it so that it delivers value? While industry leaders beginning to suggest which tools to consider in particular industries / sectors, such as the Industry 4.0 Strategy by SAP, they fall short of an implementation guide or methodology.
Reflecting back on my Black Belt training, implementing lean was focused inside the factory based on the available tools (TTCT, load balancing, SMEAD, SW, Metrics, OEE, theory of constraints, etc.). I recall an analogy from training; we were being taught “as doctors.” Learning how to cure a sickness and at our disposal we had what “medicine” to prescribe as part of the transformation. However, we were not taught any technology tools.
Industry 4.0 gives us the tools we were missing from that training. We should now focus on the joint transformation at the intersection of process, people, Industry 4.0 technologies.
Our consultancy is focused on demystifying and guiding clients through Industry 4.0 with our comprehensive, value-based approach. We have been in your shoes, first-hand. We left our manufacturing leadership roles to leverage the technology revolution without losing sight of the solid foundation of skills that brought us to this inflection point.
We still know how to analyze the sickness, but we now have much more advanced medicine to prescribe with proactive capabilities.
When you start thinking about transforming your business, we bring you the best of both worlds with Lean 4.0 systems.
Reach out to our Director of Supply Chain and Manufacturing to discuss your unique challenges and take action today.
Author: Christian Zalesky,
Director, Supply Chain and Manufacturing at C5MI