Taking Lean To The Next Level

While manufacturers have used lean principles for decades to increase their productivity and reduce complexity, smart technologies can now be integrated to enhance the impact.

Daniel Küpper, partner and managing director at the operations and industrial goods practice at Boston Consulting Group, told BCG.com that manufacturers seeking to optimize their operations need to understand the interplay between traditional lean management and Industry 4.0. A survey by Boston Consulting Group found that leading industrial companies recognize the importance of both lean management and digitization, yet many don’t understand how to combine the two.

“The integrated application of lean manufacturing and Industry 4.0 – which we call Lean Industry 4.0 – is the most effective way to reach the next level of operational excellence,” Küpper said.

Küpper noted five main areas where manufacturers can implement Lean Industry 4.0 to optimize performance. This included using sensors and software to facilitate more efficient changeovers, using predicative algorithms to improve autonomous maintenance, accelerating production management with real-time data, implementation self-inspection with data-driven quality control systems, and using sensors and virtual reality to improve working conditions. Because the integrated approach allows lean management and Industry 4.0 to be mutually enabling, its improvement potential is greater than the sum of improvements attained by each individually.

“manufacturers are racing to implement new lean principles as the benefits have been enhanced by analytics and smart technologies.”

“For example, using sensors and data to provide full transparency into bottlenecks allows the company to sharpen the focus of its lean efforts to improve OEE,” Kupper said.

It’s also important to first create efficiencies in the underlying processes otherwise the company will simply automate its waste. For instance, a company that invests in deploying robots before optimizing its processes will simply have robots performing no-value added activities.

GE Appliances says it is on track to become a Lean Enterprise in all areas of its business and operations. GE Lean Enterprise Leader Marcia Bray told Global Manufacturing that the company is aiming to become an organization that applies lean thinking to everything it does to improve the ownership experience for its customers. A full lean enterprise starts with putting the owner first, designing winning products, optimizing the system, and creating a thorough process from factory production to ordering and inventory flow.

Putting the owner first means putting “zero distance to the customer” and prioritizing what actions are implemented, Bray says. That means working cross-functionally to solve problems at the system level and asking team members to walk in the shoes of GE’s owners, retailers and service technicians.

When it comes to products, GE is focusing on wining definitions, determine by owners and commercial teams, Bray says. GE promotes an “outside-in” focus where each function in the value steam executives against the same strategy. Using data and functions from product design to distribution, the team creates a cohesive plan to meet the customer’s need. The approach ultimately ensures that the problem or issue the company is facing is the same one the customer is experiencing. “What style of refrigerator is our traditionalist asking for? Where will we manufacture it? Which quality materials are essential? What added features are not?” Bray says.

Other manufacturers are racing to implement new lean principles as the benefits have been enhanced by analytics and smart technologies. Tesla CEO Elon Musk told analysts in early February that the company may outdo even other auto makers in its lean practices. Musk called many of today’s auto factors as slower than a “grandma with a walker.”

“The car industry thinks they’re really good at manufacturing and actually they are quite good at manufacturing. But they just don’t realize just how much potential there is for improvement. It’s way more than they think,” Musk said.

Larry Fast, founder and president of Pathways to Manufacturing Excellence, told Industry Week that once new ERP platforms are in place, AI will be a “game changer” in factories. In the near future such technologies could enable manufacturing companies to guarantee Six Sigma every time on customer’s critical-to-quality requirements. “These developing technologies and their implementation will be the next big paradigm shift that will cause manufacturing companies to either take a huge leap forward or else be left in the competitions’ dust,” Fast said.