Lean manufacturing + Industry 4.0: the next level of operational excellence?

Lean Industry 4.0

Remember when Lean principles were the one and only way for manufacturers to do business? Fast forward a decade and Industry 4.0 is the new buzzword. But does this mean Lean management is down and out, or can the two be intertwined to create a whole new level of operational excellence?

The Lean approach is all about eliminating waste and non-value-adding activities to reduce complexity and cost. It provides the foundation for operational excellence by standardising processes, empowering workers on the factory floor and instilling a culture of continuous improvement.

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Using Lean techniques, all employees are involved in continuously reviewing and improving efficiency throughout a process or value chain. Tools might include visual controls to help operators identify the right times to adjust equipment, or preventive maintenance to reduce the number of equipment failures by proactively maintaining equipment. (Download this free white paper and find out how to make your manufacturing processes more competitive through automation.)

But times are changing. As operations have become more and more complex, manufacturers are finding that Lean methods alone are not enough to achieve true operational excellence. You might say that classical Lean tools are a victim of their own success, with further improvements becoming tougher to achieve.

Enter Industry 4.0

Industry 4.0 refers to the fourth wave of technological advancement in manufacturing, powered by the internet and automation. There are nine key technologies involved in Industry 4.0: the industrial internet, big data and analytics, additive manufacturing, advanced robotics, augmented reality (and virtual reality), cloud computing, cyber security, horizontal and vertical system integration and simulation. (Read our manufacturer’s practical guide to the technologies driving Industry 4.0)

At its core, Industry 4.0 is about the ability to exchange huge volumes of information in real-time. This can be from machine to human – for example, line operators can analyse data in real time to improve processes and identify potential issues. And machines are also able to communicate among themselves in real time and independently of humans, thereby allowing them to auto-optimise, auto-diagnose and auto-configure.

Lean vs Industry 4.0?

Actually, we prefer to think of it as Lean and Industry 4.0. The interplay between traditional Lean management and Industry 4.0. could be the most effective way to reach the next level of operational excellence.

It even has a name: Lean Industry 4.0.

Where manufacturers have been focusing on improving processes to boost productivity and eliminate waste, now they can look to sensors, data and advanced analytics to predict and solve problems, and identify improvement measures in a way that was never before possible.

There’s even been research to quantify its benefits. Boston Consulting Group (BCG) reports that manufacturers who have successfully deployed Lean Industry 4.0 can reduce conversion costs by as much as 40% in five to 10 years.  This is more than the savings gained by best-in-class deployment of either lean or Industry 4.0 by themselves. However, it’s worth noting that fewer than 5% of the manufacturing companies that BCG observed have actually reached a high level of maturity in Lean Industry 4.0. It’s still a very new concept.

How can manufacturers combine Lean and Industry 4.0 for maximum benefit?

Some experts say that companies need to think of Lean Industry 4.0 in terms of implementation to address a specific pain point.

Here are three examples:

Pain point 1: time-consuming changeovers

Product changeovers can be time-consuming, yet they are necessary for manufacturers to use one production line to make multiple products. By utilising Lean management principles, along with digital automation tools such as sensors and software, manufacturers can facilitate more efficient changeovers without the need for operator intervention.

Pain point 2: Equipment breakdowns and failures

Equipment breakdown is another pain point that Lean Industry 4.0 can help overcome. By using Lean methods, such as preventative maintenance, manufacturers can improve overall equipment effectiveness (OEE) and reduce the downtime required to correct minor issues.

Industry 4.0 takes this to a whole new level. Advanced analytics algorithms and machine-learning techniques can analyse the vast amounts of data collected by sensors to identify the potential for breakdowns before they occur. For instance, operators can see when parts are wearing out and perform preventative maintenance at the optimal time, which minimises unnecessary downtime, replacement costs and disruptions. (Read more about the benefits of preventative maintenance here.)

Real-time data also helps accelerate continuous improvement. Line managers can use data to identify the causes of performance issues so the problem isn’t an ongoing concern.

Pain point 3: Inconsistent product quality 

Maintaining a high product quality is an ongoing priority for manufacturers. If products do not meet the specifications of customers, they can incur penalties and lose customer trust, not to mention the risk of recalls and withdrawals. Lean management tools have been developed to reduce the likelihood of errors, and improve error detection.

But Industry 4.0 helps take this further by helping manufacturers identify and fix the root cause of errors. Again, it comes down to data analytics. Industry 4.0 technologies, such as camera-based vision inspection and sensors, collect data and feed it into software, which creates detailed analytics. Operators can then analyse the inspection system data in real time to make sure the production output ticks all the boxes for high quality standards. (Vision inspection can solve a multitude of problems – we discuss the top five in this article.)

 

Summary

With the unrelenting pressure to stay profitable and competitive, the search for new ways to achieve continuous improvement in productivity, quality and service levels never stops. The rise of Industry 4.0 has seen manufacturers begin to realise the benefits of automation and system integration. Now, the next step is to bring together the best of Lean management and Industry 4.0 to lift operational excellence to new heights.

Want to streamline your processes and improve product quality? A great place to start is with your identification and inspection systems. Talk to us about what you want to achieve and we’ll help you meet your goals in the most cost-effective way.

Want a head start? This free whitepaper takes you through choosing cost effective coding, labelling & inspection systems. It’s not about choosing the cheapest (or most expensive!) option; nor is it about choosing what your business needs right now. Download and then give us a call! Download Now

 

Looking for highly informative case studies, whitepapers and infographics for manufacturing? Or videos showing solutions in action and lots of detailed of brochures? Find all that and more in Matthews’ large resource library. It also has presentations we’ve done to industry bodies and articles from our thought leaders. Plus, its all free to download!

Image credit: iStock / Olivier Le Moal

Mark Dingley
Mark Dingley is Chairman of the Australian Packaging and Processing Machinery Association (APPMA) and is the CEO at Matthews Australasia. With 20+ years of experience in the product identification industry and the wealth of knowledge gained from working closely with industry associations in developing and implementing standards & best practice, Mark is able to assist manufacturers with a range of issues from getting real-time visibility of their production line, improving automation, establishing quality assurance using machine vision to selecting the best fit technology for coding and labelling applications. Mark Dingley's LinkedIn Profile
Mark Dingley
Mark Dingley

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by Mark Dingley

Mark Dingley is Chairman of the Australian Packaging and Processing Machinery Association (APPMA) and is the CEO at Matthews Australasia. With 20+ years of experience in the product identification industry and the wealth of knowledge gained from working closely with industry associations in developing and implementing standards & best practice, Mark is able to assist manufacturers with a range of issues from getting real-time visibility of their production line, improving automation, establishing quality assurance using machine vision to selecting the best fit technology for coding and labelling applications. Mark Dingley's LinkedIn Profile

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