Feb 12, 2023 . 5:49pm

Takeaways from the discussion of Lean and Industry 4.0 and what is next for Operational Excellence Research

For decades, the principles of the Toyota Production System and lean methodology have been the foundation of operational excellence for industry and academia. But just as disruptive technologies such as the internet of things, artificial intelligence, adaptive manufacturing, and other capabilities which constitute Industry 4.0 gain traction, so the effectiveness of traditional lean strategies is being called into question. 

Managers are left wondering what the future of operational excellence and lean looks like in the era of industry 4.0 and what it means for research.

A group of renowned experts discussed these questions in a highly anticipated panel discussion. Moderated by Professor Giuliano Marodin of the University of South Carolina, the panel featured Professor Jeffrey Liker of the University of Michigan, Professor Rachna Shah of the University of Minnesota, Professor Peter Hines of South East Technological University in Ireland, and Professor Daryl Powell of the Norwegian University of Science and Technology.

What is the role of technology in industry 4.0 and lean?

Some may argue that relying on robots to solve problems takes away from the critical thinking and problem-solving at the heart of Lean. After all, Lean is all about continuous optimization and improvement, which requires focusing on identifying and fixing the unique problems that arise within an organization. So, tackling problems head-on is critical for successful Lean implementation, and no technology can replace that.
As Daryl pointed out, the Lean philosophy and Toyota production system are based on the idea of a thinking-people system. People drive technology forward, not the other way around. There's no point in collecting data if your process is fundamentally flawed, and there's no point in automating waste.

Balancing Lean and Resilience: The Importance of Learning in Operations Management

In addressing the question of how Lean and resilience can coexist, Rachna added a new layer to the idea that Lean is a people-thinking system by incorporating learning. In Lean operations, aligning with and adapting to external market conditions is key to success.

For example, having a system in place that prioritizes both thinking and learning will result in more effective inventory management and greater operational resilience. The notion that lower inventory levels are always better, regardless of the stage of the supply chain or external factors, can be detrimental. It's okay to accept some local inefficiencies for greater overall efficiency.

Jeff highlighted that the Toyota production system encompasses a variety of concepts, including built-in quality, just-in-time, people, and supplier integration, which work together as a single adaptive entity. Implementing just one aspect of this system may not bring desired results or may even harm the organization, making it more fragile and less resilient.

Is the Advancement of Industry 4.0 and Digitalization Always Detrimental to the Workforce?"

Daryl offered a thought-provoking perspective, suggesting that the true measure of the success of a Lean transformation is the ability to provide solutions to more customer problems using the same resources rather than tackling the same number of problems with fewer resources. This creates added value rather than displacement of the workforce.

Can Technology Deliver a Quantum Leap in Operational Efficiency?

Two illuminating examples can shed light on the issue. Regarding the research conducted with Velux, a window manufacturing company, Daryl discussed the study titled "Developing a learning-to-learn capability: insights on conditions for Industry 4.0 adoption."[1] Velux deployed a cutting-edge IoT system with sensor-equipped tablet displays to enhance operational efficiency and reduce downtime. Yet, after six months, operational efficiency remained the same. The conclusion is that technology alone, without a culture of problem-solving and continuous improvement, is limited in its benefits. It is people who analyze the data, identify problems, ask questions, and ultimately find root causes that drive the learning organization.

A visit to one of the leading Industry 4.0 facilities provided another example. The host organization displayed a dynamic value stream map fed by real-time IoT data from the shop floor. However, amid the digital achievements, a flashing light on the floor caught the attention of a man who was scratching his head, trying to diagnose a machine malfunction. As the tour continued, more people arrived to help solve the problem. This highlights that digital tools offer valuable insights and perspectives but cannot fully replace on-the-ground observations and gemba walks. Some issues may occur outside of the digital tool's focus and, if overlooked, can ultimately impact the efficiency of value delivery.

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