Digital Lean: A Changing Manufacturing Landscape17 January 2024
Report by Danny Weller
Lean manufacturing principles have played a significant role in driving efficiency across organizations through their emphasis on cost reduction, focus on waste elimination, and reliance on letting customer demands drive processes. These principles are often considered optimal for identifying hidden issues and emphasize continuous improvement.
Lean as we understand it today has coalesced into a set of principles to drive efficiency and reduce waste that has transformed manufacturing.
Industry 4.0 and Lean Manufacturing
In recent years, Industry 4.0 digital and physical technologies have made possible new accomplishments of speed, cohesion, flexibility, and automation that have forever altered what production looks like. Advances in robotics, materials, and artificial intelligence are all poised to be the future vanguards of manufacturing and beyond.
As a result, digital technologies and lean principles are intersecting in what is commonly termed “digital lean”—which can be a powerful combination of timeless lean principles and constantly evolving digital technologies to decrease waste and variability in processes.
The emergence of this new era begs new questions: How do Industry 4.0 digital and physical technologies enhance lean manufacturing? What principles of lean manufacturing remain relevant today, will be relevant in the future, and apply to companies embracing digital lean? What are some of the benefits of digital lean—and common pitfalls that practitioners should avoid?
Essential Foundations for Digital Lean Implementation
Digital lean typically relies on three primary enablers within a plant, with each plant having unique and varying immediate requirements across these three domains.
Harvesting Data: Uniting IT and OT for Digital Lean
Pre-Industry 4.0, information technology (IT) and operational technology (OT) operated as separate realms with minimal intersection. The complete realization of digital lean hinges upon the fusion of IT and OT (embracing control systems, industrial networks, etc.). This convergence facilitates the seamless flow of plant and operational data to both plant and business users, unlocking the full potential of digital lean initiatives.
Streamlined Operations: Enabling Data-Driven Excellence
The effectiveness of digital lean heavily relies on data derived from plant processes. However, without standardized and disciplined processes, the continuous flow of accurate data becomes hindered. This obstruction could significantly diminish the impact of digital lean initiatives. Crucial here is the role of plant leadership in defining and ensuring adherence to standardized processes, ultimately guaranteeing the provision of precise data for optimal digital lean outcomes.
Revitalizing Processes: Unleashing Potential through Data-Driven Technology Platforms
Beyond the crucial collaboration between IT and OT and disciplined data management, the utilization of suitable technological platforms becomes pivotal for maximizing the advantages of digital lean. While opting for a technology platform like a digital twin, organizations must weigh aspects like platform flexibility, seamless integration with existing systems, and efficient data administration.
Digital Lean: a Game Changer for Continuous Improvement
Digital lean isn’t a separate set of lean principles but a powerful enhancement of existing methodologies. Unlike traditional enterprise resource planning systems that mainly focus on financial impacts, digital lean systems excel in providing comprehensive insights into every operational facet. Leveraging Industry 4.0 and digital tools, digital lean furnishes precise, timely, and detailed operational data, elevating the application of lean principles.
While enterprise systems primarily track financial impacts, digital lean innovation goes deeper, offering holistic insights into process intricacies. Tapping into Industry 4.0 technologies, not only aligns with lean principles but significantly magnifies the effectiveness of core tools like Kanban.
Moreover, the accessibility of high-frequency data and improved processing capabilities through Industry 4.0 have unlocked previously unattainable analytics and insights, revolutionizing the potential of digital lean methodologies.
Waste Reduction: Traditional vs. Digital Lean
Digital lean can complement the gains from traditional lean in reducing waste types during production. Digital lean accelerates waste identification and mitigation faster than traditional lean methods by giving targeted, detailed information directly to those who can reduce waste. However, digital lean also provides an opportunity to target hidden components of waste, such as information asymmetry and latency, that often go unnoticed and that cumulatively add up to higher support costs and reduced efficiency and output, resulting in a tangible bottom-line impact.
Digital Lean has the following advantages over traditional lean:
- Real-time Visibility: Digital Lean offers real-time visibility across the value stream, allowing proactive capacity adjustments to avoid unnecessary production.
- Inventory Optimization: Monitors work-in-progress inventory, identifying unexpected build-ups throughout the production process.
- Defect Analysis: Pinpoints the precise cause of defects, thereby enhancing first-pass yield and product quality.
- Digital Twin Integration: Connects the product life cycle through a digital twin, synchronizing data from design to product use.
- Reduced Wait Times: Dynamically reroutes operations based on real-time asset status, swiftly detecting bottlenecks and simulating optimized scenarios to reduce waiting times.
- Layout and Equipment Optimization: Utilizes performance data and virtual reality simulations to inform layout and equipment design, optimizing worker movement and efficiency.
- Transportation Time Quantification: Quantifies transportation time per product or process, identifying opportunities for shop floor streamlining and organization.
Benefits of Digital Lean
Successful implementation of digital lean brings forth cost reduction and quality improvement, fostering heightened productivity and a more robust return on investment (ROI). This outcome stands in stark contrast to the results achieved by singular digital or traditional lean improvement projects undertaken in isolation.
A New Productivity Frontier
Manufacturers dedicated to eradicating waste and consistently enhancing their manufacturing processes using traditional tools like kaizen often witness substantial initial progress. However, over time, the productivity growth tends to plateau. By embracing digital lean methodologies, these manufacturers can further advance beyond their lean groundwork. Integrating innovative technologies like machine learning and predictive maintenance empowers them to tackle previously insurmountable business challenges, unlocking unprecedented productivity thresholds
Intense management practices and technology deployment drive ROI and enhance performance measures
While there’s evident business value in traditional lean improvements and standalone technology implementations, manufacturers often realize higher ROI by integrating digital solutions within robust management methodologies like Lean and Six Sigma. The synergy between digital solutions and management practices in digital lean fosters efficient problem-solving in business contexts. Organizations leveraging digital lean with a strong focus on pertinent, high-value business challenges stand poised to yield the most substantial returns.
Digital lean transformations and improvement initiatives aim to enhance longstanding performance benchmarks like boosting OEE (Overall Equipment Effectiveness), cost reduction, and elevating safety and sustainability standards. Manufacturers, upon reaching the plateau of traditional lean optimization, have witnessed substantial incremental value across these conventional metrics through a concentrated focus on digital lean enhancements.
For optimal ROI, manufacturers should direct their digital lean initiatives towards high-opportunity areas. These typically encompass maximizing constrained asset capacities, enhancing strategic asset efficiency, reducing overall costs due to poor quality, minimizing labor expenses, and cutting unnecessary raw material costs.
Avoiding the Pitfalls
Digital Lean is by no means perfect, and like all things, will come with challenges. However, these can be overcome with an understanding of its common stumbling blocks and proper planning.
Focus On Value First, Technology Second
Amidst the integration of new technologies, manufacturers often veer into digital programs that explore technology rather than addressing pressing business issues. This approach can lead to ‘pilot purgatory‘ or ‘random acts of digital,’ causing program fatigue and potentially negative business outcomes.
Avoiding such pitfalls involves conducting meticulous assessments, aligning initiatives with value-capturing opportunities, and crafting robust business cases with measurable outcomes. Each specific initiative should aim to enhance agreed-upon operational metrics or key performance indicators, directly linked to tangible financial benefits. Continuous tracking and reporting of metrics during implementation ensure the capture of program value.
Choose the Right Starting Point
Before initiating a digital lean initiative, pinpointing the optimal starting point holds crucial importance. While many companies opt for a familiar plant or line, it’s essential to delve deeper. Evaluating the readiness of people, processes, and technology within that specific plant or line becomes pivotal in selecting the precise starting point.
Implementing digital lean transformations necessitates a shift in work approaches, behaviors, and decision patterns. Consider pivotal aspects such as the leadership’s ability to instill enduring changes and overcome resistance. Are operators hesitant to alter practices entrenched over years or even decades? What holds greater sway for operators and leaders: data-driven insights or personal experience? Is there an existing change management program, or will one need development? These considerations, when applied to a specific plant or line, aid in pinpointing the ideal starting point for digital lean initiatives.
Consistency in Process
Lean principles prioritize waste reduction and, consequently, minimize process variability. Digital lean methods excel in achieving this aim with greater efficiency. When initiating digital lean practices, beginning with a well-defined problem in a familiar production process proves beneficial.
Key considerations involve the availability and currency of relevant standards, the alignment of the production process, diligent tracking of production performance, the existence of a continuous improvement mechanism, and a clear comprehension of defect and maintenance issue root causes.
In the realm of digital lean strategies, a robust technological base is pivotal. Take, for instance, assessing the facility’s network connectivity and ensuring seamless extraction of critical process data from various stages. Equally crucial is ensuring this data is in an easily usable format. Establishing the capacity for technology to collect data stands as a cornerstone in the journey toward digital lean practices, unlocking the numerous benefits previously mentioned.
Secure Stakeholder Buy-In
Change often meets resistance, especially when facing entrenched mindsets. Engaging the workforce consistently and early on plays a pivotal role in any digital lean initiative. Articulating the tool’s value to every stakeholder becomes crucial, and one effective approach involves crafting user personas tailored to showcase how the new tool enhances their daily tasks. Collaborating with primary tool users from inception significantly boosts tool adoption and utilization, while also spreading awareness to foster wider acceptance.
Crafting a robust change management plan involves these steps, pivotal for network-wide tool adoption. Beyond formal leadership buy-in, recognizing the influence of informal leaders holds equal weight. In a manufacturing setting, spending time on the shop floor observing key figures—the problem solvers and helpers—unearths influencers with informal but substantial sway. While lacking formal titles, their credibility and informal authority often hold tremendous power. Gaining their support for a tool or initiative validates its significance, elevating the likelihood of success.
Avoid Short-Term Focus
In fast-paced business landscapes, investing resources in strategic projects that might not yield immediate returns poses a challenge. The rationale for a comprehensive digital lean transformation primarily centers on substantial, transformative advancements rather than gradual progress. This transformation has the potential for considerable benefits, as previously discussed. However, crucially, it represents a journey that reshapes work practices, employee mindsets, and decision-making processes within a plant—this evolution doesn’t occur overnight.
AMFG is a leading provider of MES software for manufacturing. Our software solutions empower manufacturers, allowing them to manage their workflows and achieve streamlined, automated processes.
With over 500 successful implementations in 35 countries and across a range of industries, we specialize in enabling companies to successfully integrate our software for AM and CNC production, into their wider manufacturing processes and scale their operations.
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