At the International Manufacturing Technology Show held in Chicago last year, some of the most popular sessions and products on display on the show floor were focused on Industry 4.0. While interest was high, many of the smaller manufacturers representing companies around the globe were left feeling frustrated. They could see where the industry was heading and understood the value of digitalization. However, they thought the financial investment was too high, and their employees did not have the skills necessary to carry out such measures.
It doesn’t help that most case studies presented by those pushing the move to Industry 4.0 are of large enterprise organizations. If robots already run your assembly line, it’s not that big of a step to become an entirely digitized Smart Factory. If, on the other hand, you’re running PCs that are seven years old and your operating systems haven’t been updated for five years, that step is more of a giant leap.
But, before we go too far, let’s define what Industry 4.0 is.
What is Industry 4.0?
Deloitte describes Industry 4.0 as “the integration of digital information from many different sources and locations to drive the physical act of doing business, in an ongoing cycle.” They explain further that throughout this cycle, there is a continuous flow of information between the physical and digital worlds. For example, information is collected from your machines on the plant floor, then the data is analyzed, and valuable insights are uncovered.
This continual flow of information allows you to catch problems before they get out of hand, such as replenishing grease when it’s needed to avoid a machine breaking down, taken offline, and repaired. It can also monitor machine downtime and speed loss to help better understand, measure, and improve OEE (Overall Equipment Effectiveness).
While Industry 4.0 isn’t confined to plant floor operations, it has been more widely adopted there. According to PWC’s 2019 Manufacturing Report, manufacturers are using or plan to use Smart Factory technologies to improve design and production processes, streamline internal company processes from shop floor to admin, communicate better with the supply chain, deliver a better customer purchasing experience, and to deliver a better customer field service experience for the customer.
All the results these organizations are hoping to gain from technology will sound very familiar to manufacturers running a Lean strategy and to Lean consultants, yet so many who are dedicated to Lean resist digitalization. Why is that?
Can Lean and Digital Exist Together?
When the concepts of Industry 4.0 and Lean Manufacturing and whether the two can exist together are discussed, there are varying opinions. Some say Industry 4.0 contradicts Lean principles and others say the two can not only exist together but do in fact complement one another. The rest of the experts fall somewhere in-between, unwilling to commit until time favors one side of the argument or the other.
We are very firmly in the camp that says the two can exist in concert.
Consider this. In the sport of hockey, there was a time when players did not wear helmets. As more people became aware of the risk of head injury and the effects of concussions, helmets became required equipment across all leagues. Soon face masks were incorporated into the helmets, and today helmets have sensors embedded in them to alert support staff of a possible concussion. Yet, as the equipment has changed, the fundamental game is still the same. The game is safer for the players and therefore improved overall.
Lean is often referred to as a pencil and paper technique, but it is a mistake to view it so literally. Lean is about eliminating waste from the manufacturing process, and it defines waste as any activity that does not add value from the customer’s perspective. Pencils and paper are just tools. We would argue using outdated tools when there are better, inexpensive tools to collect and analyze data more accurately and faster is in itself wasteful. Migrating to or adding digital tools is just a natural progression in your lean manufacturing journey.
Before there were sensors in helmets, doctors’ expertise and time was required to diagnose concussions and it was thought this was done with a fair amount of accuracy. However, time has shown that too many players returned to the ice when they shouldn’t have which resulted in tragic consequence.
Lean consultants have long relied on what we now consider outdated and time consuming techniques to collect data and validate that data to deliver an efficient and accurate process. Today’s Lean digital tools provide a way for experts to make better, faster decisions about what activities to eliminate or where to improve efficiencies through precise data collection and analysis.
The Value of Data and Advanced Analytics in a Lean Organization
We keep bringing up data, and that’s because it is the heart of Industry 4.0. Data is a term that is often mentioned and discussed at a high level, but is it getting the more granular attention it deserves? A discussion on data is far less appealing than a debate on robotics, sensors, and virtual or augmented reality. However, these tools would be irrelevant without the data and its analysis.
We’ve all heard the phrase garbage in garbage out when data collection and analysis are discussed. However, we can have a wealth of robust data being collected and generated but still struggle to make sense of the resulting information.
In a white paper published by the Industrial Internet Consortium titled Smart Factory Applications in Discrete Manufacturing the Smart Factory Task Group states that most data generated by factories is not currently used to create actionable insights. The Consortium says this is due to three main challenges. First, they often store the data collected in incompatible formats. Second, the storage and distribution of data require considerable computation resources and substantial capital investment to acquire. Finally, the installing and maintaining equipment is a significant capital outlay. Another challenge they did not mention is the lack of skilled analysts on staff.
So, how can we overcome some of these challenges so a small to mid-sized manufacturer can reap the same benefits of Industry 4.0 as their larger competitors? This is where an internal or external lean consultant well versed in Lean digitalization could add immediate and measurable value.
Consultants should be on the lookout for technology that is easy to install and is compatible with systems already in place to reduce the time they must spend on setup.
The technology you use or recommend should provide accurate, understandable data so you can immediately prove or disprove efficiencies. This allows you to quickly provide your client with reliable recommendations and actionable steps.
Our recommendation is to start with relatively inexpensive solutions that do not require an overhaul of a company’s computing capabilities. Let’s look at some tools that fit into this category.
Cloud Platforms and the Software Running on Them
The cloud has almost single-handedly democratized manufacturing and helped all manufactures from startups and small family-run businesses to behemoth companies enter the era of Industry 4.0. Because of cloud computing, companies no longer have to invest heavily in capital equipment such as servers and top of the line computers to run simulations or buy expensive software licenses. With the cloud, you can essentially rent the computing power you need when you need it, and you have access to the most up-to-date versions of software as required.
Lean consultants can access cloud-based tools ranging from simple production planning and scheduling dashboards and project management platforms, to the more complex tools such as Business and Manufacturing Intelligence (BMI) Because these tools can be accessed anytime, anywhere, and on any device, your time on-site can be spent advising your client instead of analyzing data.
Real Time Locating Systems (RTLS)
While traditional solutions such as RFID allows you to track where an item has been, the much improved RTLS systems available today allow you to track the most current location of people and objects within an environment.
Lean consultants can use these systems to identify where stock is piling up and even track the daily journey of tools throughout the factory to then configure access to further improve efficiency.
RTLS also can add a “smart” component to value stream maps for a more transparent decision and improvement process for production systems. Imagine being able to virtually map out a U-shaped cell and test its efficiency before your client invests in building it.
There are two types of RTLS—precision based, and proximity based. Precision based will track to an exact location, while proximity based will get you within a hundred feet. Precision based is, as you can imagine, pricier so before you invest determine how accurate you really need to be.
The Industrial Internet of Things (IIoT)
IIoT (interconnected sensors, instruments, and other devices) provides organizations an essential family of tools for Lean production practices. When these tools are applied appropriately, organizations can realize new methods of removing waste from their processes. OEMs realize this and are adding sensors to manufacturing equipment for condition monitoring and predictive maintenance. This way, maintenance is no longer performed on a fixed schedule, whether or not the equipment needs it. Instead, maintenance is only carried out when required, which can reduce maintenance costs—often by up to 50 percent.
Sensors combined with a data collection and analysis platform essential for creating improvements can be used to monitor production efficiency in a far more consistent and accurate way than can be done with pen and paper. For example, Haris Operator is an OEE mobile app using a BTLE accelerometer that records every indication of a machine stop or loss of speed, giving you more insight and control over productivity. And, unlike some IIoT solutions, the accelerometer can even be used to collect data on older machines and manual assembly lines.
Moreover, the BTLE accelerometer can be easily affixed to any machine and quickly removed so you need only to pull it out of your briefcase, collect the data you need, toss it back in your bag and move on to your next client. Once you’re on the plane, in your hotel, or back in your office you can do the work of analyzing the data collected and formulate recommendations.
Next Steps Toward a Digital Lean Strategy
Again, it is essential to remember that to stay consistent with Lean principles, the digital tools, provided by the key enablers IIoT and cloud, you choose must be easy to deploy, and the data delivered must be easy to read and analyze. If they are not, you’ll find you are building waste into your processes instead of removing it.
Now that you can see Industry 4.0 and Lean Manufacturing principles go hand in hand, how might you guide your client through their own transformation into a factory of the future?
Think big but start small. Start brainstorming use cases for low hanging fruit opportunities. Those being opportunities where the benefits can be realized quickly, and where the technology itself will not require a considerable investment in time, money, and training. Then prove yourself and the tech by implementing a small pilot project. To determine the success or failure of the pilot, use the data to measure productivity gains and waste reduction.