Five Ways Industry 4.0 Aligns with Lean Manufacturing

Guest Author: Scott Renner, Director, Industrial Manufacturing, Oracle.

Lean manufacturing environments are poised to gain the most with advanced industry 4.0 technologies like industrial internet of things (IIoT), artificial intelligence (AI), and big data analytics. After decades of the Lean vs Material Requirements Planning (MRP) wars and differing opinions on technology’s role in shop floor control, the new era of manufacturing intelligence is changing the game for both.

Problems with Lean

A company’s manufacturing philosophy provides no immunity to the recent changes in the marketplace. Customers want more customization, connectivity, quality, and value. In many ways, these market dynamics play directly to the strengths of lean manufacturing. But many lean operations lack the analytical data from both the value chain and the production process.

The lean company’s disposition is to eschew investments in technology when other techniques can make improvements. Without question, lean manufacturing has had much success in the refinement of production processes over years of Kaizen. But market pressures are demanding even more agility and cost reduction.

Enter Industry 4.0

The cultural identity and philosophy of lean manufacturing is very compatible with embracing digital transformation. The ability to reflect on current processes and continuously make improvements that ultimately deliver value to the customer is at the very heart of the business value around advanced technologies.
There are five major dynamics of lean manufacturing and industry 4.0 that directly align:

1. Value-Chain Visibility: The hyper-connectedness of Industry 4.0 enables data-based decisions that illuminates complex interrelationships and supports continuous improvement.
2. Customer Centricity: An inward challenge in reducing waste in many lean operations is to ask if a customer values an activity. Collecting and analyzing data from digital market channels informs what the customer desires and enables close interaction through the order conversion process. This helps to smooth out demand and production balance.
3. Continuous Improvement: A primary tenant in lean manufacturing is the constant improvement of process and product, driven by classic waste categorization. Most transformative improvements involve multi-variate problems that are often separated by time and space. Today’s analytical tools identify non-intuitive correlation and root cause to these complicated problems.
4. Agility: The basic structure of lean manufacturing is to be demand driven where the customer directly generates the pull queues for production. Industry 4.0 promises to take agility to the next level with decentralization of production, manufacturing and customer co-location, and simplified and autonomous work that has integral and self-guided instructions.
5. Data-Driven: Many lean manufacturers manage operations by the Six Sigma process and focus on process control and improvement through statistical methods. Digital technology super-sizes the importance of data collection and ability to identify correlated and causal conditions in the manufacturing process.

The Marriage of Lean Manufacturing and Industry 4.0

Unlike traditional MRP execution systems, industry 4.0 combines the physical and the digital world, in real time. This real-time, omnipotent intelligence creates the ultimate platform for the breakdown of work for flexibility and productivity, thereby balancing and optimizing production by communicating part to part - forming the ultimate Kanban system.

For a better understanding of how Oracle is helping companies effectively leverage industry 4.0 technologies, visit our industrial manufacturing, automotive and high tech industry sites.  To hear about a lean manufacturing success story, view this Lean Manufacturing Case Study Webcast.