Will ‘Industry 4.0’ replace ‘Lean’

For many decades, ‘lean’ principles have dominated our manufacturing processes. Nowadays, we see that due to new technologies, some lean principles are getting turned upside down. Due to Digital Transformation, we get more registration, more administration, more follow up. Does this initiate the end of ‘lean’? Lean has always teached us to get rid of non added-value tasks (like administration?).

I have always been an addict of lean thinking, even before I knew the meaning of the word ‘lean’ in an operational context. At that time (30 years ago?), we called it ‘no non-sense’. While writing this, I notice that in no non-sense, ‘sense’ could be explained as value adding. We can actually immediately translate ‘no non-sense’ into the definition of lean: ‘avoid non value added activities (or waste)’.

Mostly, administration tasks are seen as waste. We are working in ‘cells’ in order to limit the number of orders and confirmations. We have Kanban in order to reduce paper on the shop floor.

However, today, the Digital transformation and Industry 4.0 in particular is trying to get more confirmations, more data, more administration.

In the SAP Portfolio, all building blocks for digital transformation are available. SAP has combined all these technologies in one concept ‘Run Simple’.

• Internet of Things: for capturing a lot of data automatically
• Hana: for the speed of processing all this data,
• Cloud: for storing this data in such a way that it is available everywhere
• Networked Economies: for bringing the data to the cloud
• Big Data: for providing reporting tools for the data
• SAP-UX: for a platform independent exploitation of the data

Are these tools still in line with ‘lean’?  We are actually adding a lot of administration. But, what if this administration allows us to run simply better? If the administration runs automatically, quick and real time and we have processing capacity enough to use all this data in order to allow us to take better decisions, then there is definitely an added value.

In that case the administration is not ‘waste’ and the definition of lean remains valid. The additional administration is giving value, sense and is definitely not waste anymore. As a result, we can conclude that manufacturing 4.0 is still adhering to the lean principles, because it is adding value. Less administration was just a method to be lean. Due to the new technologies we can still be lean with more administration. Administration has been promoted from waste to added value, because of the new technologies to administrate. And lets think about the possibilities this administration to reveal opportunities for continuous improvement.

Below are 2 real examples (when I was reading articles and following training on digital transformation, I was always complaining about real manufacturing examples, so here are mine):

There is a prerequisite however. If we are using all this information simplyautomatically, we need to be able to trust it. It needs to be correct. In our current processes, a big part of the process is manual or at least we keep manual control. The manual part allows us to deal with weaknesses in the process. We are often not aware how capable we are to correct process imperfectness via manual action. In some cases, we intervene almost unconsciously. In more extreme cases, we call it firefighting. But in both cases, it allows our processes to be imperfect.

Before implementing Manufacturing 4.0 or before stepping into digital transformation, we need to evaluate our current information maturity. We can not allow our processes to be imperfect anymore. If we have a lot of obsolete unconfirmed transfer orders, uncompleted production orders, a long list of inaccurate MRP exception messages, stock differenced, we will have trouble implementing this automation and there will be no added value. As a result, I strongly suggest to clean up your current system already now and to ‘simulate’ the automation in your current, partly manual, process. Ask yourself “What if a robot would do the job”? Get awareness on where the shortcomings are and work on them already now. Already by doing this, you will receive a meaningful process improvement.

Conclusion

Is ‘Running simple’ replacing ‘Lean’? Not really. The main lean question remains: “What is the added value?”. This questions still answers it all. If an additional confirmation, automated through the installation of the internet of things on the production lines adds value, than we should go for it and we will not infringe the lean laws. If we are able to do the planning ‘like a robot’ we can install a robot. The tools are there.

Lean will not disappear, we still need to avoid waste as much as possible. But some activities that are ‘waste’ today, are now adding value because they can be automated, processed real time and as a consequence are simple from a user point of view (that’s how SAP defines it: ‘Run Simple’. Condition however is that this automation can be trusted.

Manufacturing 4.0 will require a Lean 2.0.