Where LEAN and Industry 4.0 intersect is in providing operational excellence. Implementing Industry 4.0 using LEAN, allows an organization to get the full potential of both and by avoiding automating waste.
To reduce the risk of run-away projects that take too long, cost too much while failing to deliver the required business objectives organizations need to establish what to automate, the level of automation and what technologies to implement. Good decision-making is important when implementing Industry 4.0. LEAN methodology will help organizations focus on ensuring value for the all the stakeholders.
For each project, within the Industry 4.0 program, it is essential that the project
aligns with the business strategy,
aligns with the operation strategy,
has the problem clearly stated,
and provides a clear return on investment.
How to use LEAN to support the implementation of Industry 4.0.
Prepare The Team For Change
All organizational change is disruptive, especially when the proposed changes affect people and Industry 4.0 will have significant impact on all people within the organization. People will look at change with the WIIFM (what’s in it for me) thought. Am I going to lose my job? Will my work hours change? How will my job change?
It is important to prepare the team with a clear description of why the project is being done and the expected benefit to both the company and the employees. Without preparation, the team be unprepared for the start. Without clear expectations, the team will be unable to achieve the desired results.
When taking on a large change, like Industry 4.0 there is a significant amount of work to implement a full system. It is important to “eat the elephant one bite at a time”. Organizations do not have the resources, funding or personnel, to get everything done at once.
There is a great deal of learning required by any organization when implementing 4.0. When starting small the learning is also small.
There are risks and opportunities with any change, including not changing, with smaller projects these are easier to manage and control.
Before you can identify value, the organization first needs to define value. In simple terms it is doing only what your customer is willing to pay for. It is important to remember there more customers than the end-customer. The other customers include distributors of your products, company shareholders, certification agencies, government agencies that protect the health and welfare of the employees, and employees.
Understanding who your customers are and what they are willing to do for you for is important information to have before starting any LEAN 4.0 improvement.
Map The Value Stream
To map the value in your production stream start with a map of your current process, activity by activity. Look at each step and the hand-offs between steps ensuring each step is something your customers are willing to pay for. If not, eliminate that step. It is important to eliminate the activities that are of no value to your organization.
By not eliminating non-value adding activities, Industry 4.0 will only automate the non-value added steps, and provide no value to anyone.
Define The Flow
Waiting is waste, look at where you have resources waiting for their next activity. All resources need to be looked at including people, material, machines or information.
It is not possible to eliminate all waiting; it is possible to reduce it, by designing the process bottlenecks at the optimum locations for the organization. Reduced cycle times generated by Industry 4.0 will not provide financial gain if the wait times are not reduced.
Now is the time to change the flow to better match what Industry 4.0 will bring to the organization. While speeding up the current flow is good, looking at a better flow will bring more benefits.
Establish The Pull
Once you have designed your new process, it is important to ensure the mechanism that starts the process is well defined and managed. For build to order production, it is as simple as receiving the customer order. For organizations that build for anticipated demand the use of data from Industry 4.0 will help significantly with this.
Over or under production will cost the organization and through the use of defined process based on data organizations can minimize these costs. With better agility and speed from Industry 4.0, this should be easier to establish and manage.
Drive Improvement Culture
Industry 4.0 is in it’s infancy, so more exciting developments are heading to the market. New tools (sensors and software) will be available, and the organization will have learned a great deal so will need to review the new normal and determine whether to implement new.
The drive for constant improvement needs to move from the factory to the entirety of the organization, ensuring you are building the right thing at the right time.
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Marni McVicar is an interim executive supporting companies in operations management and getting products from concept through the factory and into the customers’ hands.