Can Lean Management and Industry 4.0 Co-Exist?

Ever since the end of World War II, manufacturers have examined and then adopted the lean management principles that emanated from Toyota Motor Corporation in Japan.

Lean management is the foundation for most manufacturing enterprises because it has proven over the years to reduce waste, save time and money and produce continuous improvement on the factory floor.

So, does the arrival of Industry 4.0 mean there’s a new sheriff in town?

Industry 4.0: Revolutionary Change, or Much Ado About Nothing?

Broadly speaking, “Industry 4.0” refers to digital transformation in the manufacturing sector — the integration of automation and smart technology into traditionally manual processes. Proponents claim that by digitizing, organizations within the industry can achieve greater efficiency and productivity at a lower cost. 

Of course, these views aren’t universal; there are those in the lean management camp who believe that Industry 4.0 provides more noise than tangible value. These criticas maintain that Industry 4.0 is hardware-heavy and software-driven, requiring hordes of IT technicians to keep the digital engine running smoothly. It’s more bother than it’s worth, they argue, and costly to boot. 

However, this perspective ignores the fact that most Industry 4.0 applications often come in the form of sensors embedded in factory floor machines. The sensors feed voluminous amounts of data to a central computer whose software analyzes the data and, through artificial intelligence (AI) can detect patterns, opportunities, errors and trends in real time. 

A manufacturer can then leverage these insights into a greater market share, an expanded customer base or new products for existing customers. It can do so on a budget, too; such sensors are inexpensive and getting cheaper by the day, even as their computing power grows exponentially to handle the processing speeds needed for data analysis.

When Humans Leverage Machines, They Achieve Considerable Gains

No human or team of humans practicing continuous improvement or kaizen can facilitate such business gains. What they can do is act on the predictions offered up by AI in their factories, plan marketing and sales strategies around those predictions, test these strategies and then implement them on a wide scale.

In other words, a synergy between the digital and human worlds can produce positive results for manufacturers.

Overall equipment effectiveness, or OEE, is critical to manufacturers. By optimizing OEE, capacity can be increased, costs reduced and product quality enhanced. When OEE is sacrificed and machines break down, productivity drops and the need to carry high inventory increases.

A digital factory floor employing sensors can detect potential breakdowns before they occur by analyzing data in real time and alerting line workers that a problem is about to cause a disruption to processing operations.

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Case Study: Kone Corporation Leverages Sensors to Time Maintenance

The Kone Corporation is a digitally-transformed leader in the global elevator and escalator business. When any of its elevators or escalators break down, sensors embedded in the machines send an alert to Kone’s service department and thereby facilitate speedy client service. This is not routine maintenance conducted according to a pre-ordained schedule; this is digital technology alerting mobile service crews when and where they need to go.

Kone saves millions of dollars each year in maintenance on its vast fleets of service vehicles around the globe because the service teams venture out only when they need to.

Embracing Industry 4.0 Means Collaborating with Technology

Efficiencies like Kone’s cannot be achieved with humans only, no matter how lean a company’s operations are. The thrust behind Industry 4.0’ is to enable human workers to produce more efficiency, speed and quality — rather than to render obsolete their lean techniques on the shop floor.

When one considers that the core of lean manufacturing is to empower people to drive improvements, how can you argue with what Industry 4.0’s message is?

Think about the evolution of cellular telephones from the early 80s to today. There is no comparison between the clunky, walkie-talkie Motorola devices — which came with less than an hour of talk time and the capacity to store a paltry 30 phone numbers — and today’s smartphones, which are effectively palm-sized computers.

Both make phone calls. But only one has the capability to harness the power of an unseen digital world and permit customers to purchase products, empower service teams to conduct remote assessments, or allow sales teams to obtain a complete 360 degree view of a customer.

This is the power Industry 4.0 delivers. With it, people can achieve more and go further without forfeiting all that lean management offers.

The Digital Path, Explained

Using Salesforce CRM integrated with a manufacturer’s existing ERP, Gerent creates solutions that leverage the best of human intelligence alongside the best of artificial intelligence to produce results that empower greater quality, innovation, marketing, and sales throughout the manufacturing sector.

Gerent understands how overwhelming digital transformation can be for manufacturers. So, we have produced a white paper that offers clear advice on how to prepare and begin a journey in the world of Industry 4.0. Read it, or contact us today to learn more about how Salesforce can support your organization’s transformation efforts!