Lean Manufacturing in Industry 4.0

Like previous industrial revolutions, new technological developments are driving Industry 4.0 forward. The most relevant of these new technologies for lean manufacturers are cyber-physical systems (CPS) and the industrial internet of things (IIoT).

Fear of automation, and other manufacturing workforce challenges, make it easy to overlook the potential positive cultural impact from these technologies.

For lean manufacturers, this new technology is an opportunity to access the core objectives of lean manufacturing: empowering people to drive improvements.

Defining the enabling technologies

Wagner, Hermann, and Thiede define cyber-physical systems as “the result of a closed-loop of sensor-based physical process data acquisition combined with cyber data processing and autonomous actuator based process controlling connected with the internet, its data, and services.”

Put simply, cyber-physical systems (CPS) facilitate the connecting and collecting of data from production via a network – usually the cloud. In a cyber-physical system, there are three primary ways to collect data: human to machine, machine to machine, and data acquisition and processing.

Human to Machine

Human to machine data collection is primarily sourced from operators via a digital interface. The CPS can collect information via traditional data entry, methods like typing into a computer, or selecting options on a tablet. Operators can also share information through advanced technology. For example, computer vision can collect data from specific gestures or movements that have assigned meaning.

The consumer world has digitized much faster than the industrial world. Many of these methods for inputting information are already familiar for operators. Common UI/UX design principles make it easier for people to adapt to new HMI technologies. For example, selecting red digital “buttons” for negative feedback and green digital “buttons” for positive feedback.

Machine to Machine

Machine to machine communication historically meant a machine pushing data into another machine. These machines were usually connected via an Ethernet connection. The full potential of M2M communication was limited by siloed, proprietary technology.

IoT transforms machine to machine communication in two significant ways. First, it often involves communication both ways, versus just a push from one machine to another. Second, adding the cloud is enabling greater possibilities between machines. With IoT, purchasers want more connection options, which is driving a change from point to point communication embedded in hardware to open communications between devices.

This provides potentially unlimited integration options. These changes are translating to additional information and options for manufacturers.

Data Acquisition & Processing

Many manufacturers are already preparing and collecting data in other software systems. They use enterprise resource planning software (ERPs) to manage purchases, financial planning, employee, and other aspects of their business. They use MES or manufacturing execution systems to track and trace materials, resources, etc.

These systems often contain production-critical data, but they are massive, siloed, and often difficult to access or maneuver. The CPS can push data into these and other systems, or pull production critical data from these systems

Ultimately, this data can combine to deliver a holistic and interconnected vision of production.

Lean Manufacturing Principles

The value of lean manufacturing is that it helps manufacturers reduce operational complexity, eliminate waste, and drive productivity improvements by empowering workers on the shop floor to make necessary and continuous adjustments.

The human element is a key principle of lean manufacturing. Human analysis and flexibility produces the majority of the efficiency from these principles.

Lean Tactics and Approaches Create a Lean Toolbox

A traditional lean toolbox can include a variety of methods and principles. Manufacturers shouldn’t necessarily apply each tool in every factory. However, the toolbox provides options for any and every factory. Together they can be combined and applied to yield continuous improvement.

Towards Lean 4.0

Enabling industry 4.0 technologies are tools that can make manufacturers more flexible, efficient, and profitable.

Simple adjustments, like converting paper-based work instructions to digital work instructions, can drive savings with little to no cultural adjustment. Manufacturers generate efficiency improvements of 10 – 15% by incorporating digital work and robotics into their production lines. This is a stand-alone Industry 4.0 project.

Standalone digitization efforts yield a 10-15% reduction in operational costs on average. However, these projects need to be implemented and designed correctly in order to yield these improvements. Also, they can be difficult to change if they’re highly customized.

Industry 4.0 + Lean Manufacturing

If manufacturers adopt both a lean methodology and industry 4.0 tools, they can accomplish more than if they tried these initiatives separately. CPS and IoT can make a shop floor truly lean. The real-time data and communication between people, machines, and systems provide a holistic view of production and empower frontline workers to make adjustments in real-time.

BCG reports that companies that combine lean and industry 4.0 can achieve a 40% cost reduction. This means that combining lean and industry 4.0 yields a 100% increase in savings over applying each of these separately.

Better with a use case

Despite best intentions, 84% of digital transformation projects fail. Causes vary, but they include long proof of concept periods, high implementation costs, and general data ambiguity on performance before the project and improvement targets.

With these numbers in mind, manufacturers should be wary of full digitization projects. They can de-risk the process by starting with a specific application of the technology that’s has a clear business objective and has a short time to value.

Objections to “Lean 4.0”

Taking an analog process and converting it into a digital process can be counterproductive.

Layering new technology can make a production line more expensive to run. Adding custom software could require reskilling. It can also require hiring new team members with more technical expertise.

This is a key concern for manufacturers because many manufacturers struggle to hire STEM employees. Manufacturers need to compete with other technology companies for the same pool of scarce talent. If they don’t hire internally, they’ll need to rely on outsourced expertise to maintain these systems. Both have high associated costs.

How to stay lean with the new technology

Manufacturers that want to adopt Lean 4.0 should start small. Recognize that engineers, plant managers, and leadership don’t know what they don’t know – but that’s ok!

Design to learn

The first step is to design a digital process that will collect data. The design process in lean 4.0 is ongoing. Benchmarking data to gain insight into the present state may uncover flaws in the existing process.

This is why flexible development matters for manufacturers. Outside of having a data-driven, clear approach, manufacturers should start where there are a clear use case and benefit. This approach gives a quantifiable measure of if the implementation is a success or not.

Test and collect data

Take the initial test live into production. Like any test, try to control variables as much as possible. Make sure you’re collecting data that gives insights into which elements need to adjust to make the test successful. For example, identify cultural and conditional challenges. If operators are struggling to adapt to the new technology, seek to understand why and if this is a long or short term challenge. To uncover this challenge, you’ll need to track productivity in a process by the operator.

Iterate and Scale

With Lean 4.0, the testing doesn’t stop. The technology enables continuous improvement, but the iteration is what makes the process truly continuous. Apply learnings from test to other lines, and apply conceptual learnings to other areas for expanded testing at the pilot plant.

Lean 4.0 benefits

A use case-focused, gradual, data-driven implementation that shows value along the way will make it easier to get buy-in from both operators and other internal stakeholders. This buy-in decreases the risk of implementation failure.

With Industry 4.0 the greatest benefits are realized by unlocking the analytical power of manufacturers’ greatest asset: their people.




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