Lean has been manufacturing’s bedrock. By evolving to encompass digital, digital lean smooths transformation and leverages smart manufacturing.
Lean principles have been a foundation for production and the management of manufacturing companies over the last six decades. And lean still has validity: with its focus on maximizing efficiencies, minimizing waste and identifying the root causes of problems and errors, it continues to drive the efficacy of production disciplines and processes.
But, since the advent of Industry 4.0, manufacturing systems have simultaneously become vastly more complex and dynamic in their potential. Leading companies have already embraced the idea of next-generation manufacturing, and as digitization gathers pace and evolves further, the factory of the future is an ever closer reality in many industry sectors.
As such, lean, too, must evolve into digital lean. Actually, it now has a dual, reshaped role. Its practices need to be adapted for the potential within new technologies; equally, the journey to full-scale digital manufacturing requires the disciplined approach of lean to ensure a smooth transition.
Lean as a best practice foundation for change
As corporate production systems transition to full digitization, so best practice foundations become even more important. Change is fraught with possible problems, and there is a heightened risk of disruption given the increase in remote work and reliance on autonomous machines triggered by COVID-19. Rigorous lean disciplines and ongoing continuous improvement (CI) programs stabilize the pillars of production, priming the organization for further steps toward digital maturity and next-generation manufacturing.
Lean also fosters the appropriate organizational culture – a prerequisite for successful transformation. Resistance to change is often an obstacle holding back digital progression, and lean disciplines, especially when instilled by committed leadership, orients the culture to embrace transformation.
Effective levers of transformation
As such, at the outset of a digital transformation journey, blending lean thinking into the planning process is a powerful enabler of success in building a modern production system. Because its intent is to remove complexity, lean helps identify problem areas and highlight redundancies and unnecessary processes at the very start – the design phase – of the transition.
Implicit in lean methods, too, is the optimization of current systems and operations, paving the way for as clean a slate as possible before commencing. A digital lean approach to transformation planning may also capitalize on advanced digital technologies to create enhanced data modelling, scenario hypotheses and comparative cost-benefit analyses – including simulations via digital twinning – with no risk. These initiatives will guide the path and set an appropriate pace for transition, reducing the chances of disruptions.
Key benefits of digital lean
As the digitization or digital operating system (DOS) gains maturity, synthesizing lean thinking within the application of digital tools will unlock new capabilities and catalyze a range of benefits.
“For a start,” says Jacques Matthee, Products Director at Competitive Capabilities International (CCi), “the enhanced data and analytical capabilities reinforce lean’s disciplines and performance focus.” Matthee identifies four other main areas where manufacturers will experience digital lean gains:
- Optimizing flows throughout the value network
The flow of materials, work streams and processes in a manufacturing organization, and its wider supply chain, is multi-faceted. Traditional production systems were siloed, with separated upstream and downstream participants and systems. Digitization facilitates the removal of these barriers, generating improved sharing of real-time data, information, and business intelligence. A lean, digitally-enabled organization gains end-to-end flow visibility, which improves operational outcomes and strengthens the value chain.
- Generating additional savings
Studies demonstrate a doubling of operational cost savings when digital lean kicks in – proof that digital amplifies the benefits of traditional lean. The augmentation of lean methods with automation, for instance, improves factory equipment effectiveness as well as output and logistical efficiencies throughout the plant.
- Improving the robustness of manufacturing systems
Industry 4.0 incorporates a vast range of digitally-based productivity and performance levers. Smart manufacturing implies an agile and interconnected network far beyond the manufacturing location, but at core, it means improved resource utilization, further seamlessness in all production processes, and improved factory floor operations. All of these refinements add more customer value – the precise objectives of lean.
- Identifying opportunities
Digital transformation – technology interoperability, robotics, Artificial Intelligence (AI) – has another, deeper purpose: the quest for innovation as a competitive game changer. Traditional lean’s principle of ceaseless, continuous improvement, when liberated by next-level technology, will contribute to re-gearing the possibilities for manufacturing innovation.
Lean operations have always leveraged competitive manufacturing advantage. More recent evidence, but a growing body of learnings, supports the premise that digitally mature companies achieve better revenue growth or net margins compared to industry averages. It should be clear, then, that manufacturers now need to be both lean and digitally progressive.
They need to adopt digital lean.
To find out more about how to transition to digital lean, download CCI’s white paper Digital operating systems: The organisational need for guidance, or contact CCi for further information about how to orchestrate holistic digital transformation in your organization.