When Lean Manufacturing Meets Smart Manufacturing

When Lean Manufacturing Meets Smart Manufacturing

  • By

    Mr. Nikhil Honmode - Vice President Projects

  • /
  • Posted

    20 Sep 2019

When Lean Manufacturing Meets Smart Manufacturing

When the concept of lean was first introduced, it revolutionized the manufacturing landscape in more ways than one.

By instilling a culture of continuous improvement and waste minimization, it has helped manufacturers in reducing operational complexity, optimizing inventory levels, and improving productivity.

Now imagine if manufacturers take an integrated approach to implement lean manufacturing with smart manufacturing! The valuable synergies manufacturers can generate through lean and smart manufacturing or Lean Industry 4.0 is phenomenal.  

According to a report by BCG, when lean manufacturing or smart manufacturing is applied alone, it can reduce conversion costs by approximately 15%, whereas the integrated Lean Industry 4.0 approach reduces conversion costs by as much as 40%. Furthermore, the integrated approach can reduce costs related to poor quality by 20% and work-in-process inventory by 30%.

The lean + smart approach

Although manufacturers have been using lean principles and tools for decades, with increasing competition, rise in customer demands, and the sheer complexity of operations, many find that lean management, in isolation, is not sufficient to address operational challenges.

Although lean principles help in improving production speed, they do not integrate the different processes to provide visibility into the entire value chain. Lack of visibility impairs production efficiency, as failures are difficult to detect and rectify. The longer it takes to identify failure, the more damage is done due to excessive waste and angry customers. What lean then needs, is a modern approach to deal with complexity, that can provide end-to-end insight into processes, and further improve productivity.

With smart manufacturing, through the use of modern technology, aiming to boost speed, efficiency, and coordination on the shop floor, manufacturers are now looking to take a smart approach to their lean management initiatives. By bringing lean manufacturing and smart manufacturing principles together, manufacturers are hoping to reach the next level of operational excellence: from reduced waste, improved operational efficiency to better synchronization, aggregation, and standardization of processes across the shop floor.

Manufacturers are soon realizing that the lean + smart approach is the only way to succeed in today’s competitive and complex landscape.

The Benefits of Lean Industry 4.0

Although both lean manufacturing and smart manufacturing support the objectives of operational excellence, they apply different principles to achieve these goals.

While lean manufacturing reduces complexity and cost by eliminating waste and non-value-adding activities, smart manufacturing makes use of modern technology like sensors, robotics, augmented reality, cloud computing and analytics to increase transparency, improve communication, and adapt to change.

By merging lean manufacturing and smart manufacturing, manufacturers can leverage the best of both worlds to take operational excellence to an entirely new level. Here’s what happens when lean manufacturing meets smart manufacturing:

  1. Visibility: As factories move from being a series of siloed production lines to a tightly integrated ecosystem of connected devices, Lean Industry 4.0 provides end-to-end visibility that allows production managers to oversee operations of all equipment – in real time. Such visibility not only helps in optimizing performance, but it also provides timely insight into issues or challenges – allowing managers to take measures for improved throughput.
  2. Integrated supply chain: Waste elimination through lean, when combined with horizontal and vertical system integration through smart manufacturing results in an integrated supply chain. With every aspect of the shop floor connected – enterprise systems, IT, operational systems, machines, and devices - Lean Industry 4.0 provides a holistic view of the entire value chain. Such integration helps enhance operational efficiency while allowing managers to improve time-to-market.
  3. Agility: As the manufacturing landscape gets increasingly complex, manufacturers need to respond and adapt to changes quickly. Lean tools, along with sensors and smart devices, allow manufacturers to remove non-value-adding activities from the shop floor, and significantly accelerate the production process. With the ability to automatically make changes to production schedules, Lean Industry 4.0 allows manufacturers to keep pace with the changing environment while adding value at each stage.
  4. Productivity: Equipment failures and breakdowns lead to high inventory levels and low customer satisfaction. Preventive and predictive maintenance algorithms help in boosting overall equipment effectiveness (OEE), while drastically reducing downtime. By using advanced analytics algorithms and machine-learning techniques, Lean Industry 4.0 allows manufacturers to analyze huge amounts of data collected by sensors and identify potential breakdowns before they occur – thus reducing disruptions and minimizing unnecessary downtime and replacement costs.
  5. Speed: As manufacturers seek to increase product variants while reducing batch sizes, they struggle to traverse through the complexity of production planning. Lean Industry 4.0 allows them to react to deviations in production in real-time, identify issues, and update employees on changes to be made to production plans. By consolidating the data collected from various sources in an integrated value chain and feeding it into AI algorithms, manufacturers can make changes to production schedules based on various criteria as efficiency, lead time, and customer priority, and ensure the faster rollout of the measures throughout the shop floor.
  6. Quality: Quality is becoming a requisite for customer satisfaction. Manufacturers who ship poor-quality products to customers incur substantial costs in recalling products, manufacturing replacements, and shipping them. Lean Industry 4.0, through the use of self-inspection tools and data-driven analytics, help in reducing the likelihood of errors and increasing the rate and speed of error detection. Access to reliable context data and the ability to conduct detailed tracking helps unearth the root cause of errors while allowing real-time monitoring of process parameters for improved quality.
  7. Safety: With safety defining the foundation of successful manufacturing businesses, Lean Industry 4.0 allows for improved working conditions. Through the use of smart sensors and devices, shop floor managers can detect hazardous working conditions, provide alerts when safety is compromised, and reduce the rate of mishaps. Detailed tracking of incidents helps in periodic compliance checks while enabling managers to identify areas of improvement as well as take preventive measures. What’s more, immersive training in a virtual environment can help reduce the high accident rate among new hires and train them to always follow safe practices.

Drive operational excellence

In the realm of manufacturing, lean is a well-established concept that has helped improve productivity and customer experience for countless organizations. Enter smart manufacturing, and aspects like IT-OT integration, IoT and advanced data analysis are allowing organizations to gain a clearer understanding of the entire value chain to drive improvement opportunities and ultimately gain competitive advantage.

In the modern manufacturing era, the integration of lean manufacturing and smart manufacturing can help companies reach the highest level of operational excellence. Through continuous improvement, waste elimination, connected technology, and analytics, Lean Industry 4.0 can help companies to unlock the true potential of both concepts and enjoy operational excellence for years to come.

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