The Five Principles of Digital Lean

Introduction

Lean Manufacturing has long held to a core set of principles. In this webinar, we'll discuss how the principles change with the move to a Digital Lean approach.

We'll discuss any recommended changes to the principles themselves and also cover how smart manufacturing / Industry 4.0 solutions can assist with the realization of these principles in your company.

Digital Lean Principles

I first encountered Lean Manufacturing back in 1990’s when I was working as a systems supplier to Toyota. I learned quite a bit about the Toyota Production System directly from my interactions with the teams over the years I worked with them. Additionally, I studied all that I could find from Taiichi Ohno and other designers of their systems. When Womack and Jones released their books in the 1990’s about “Lean Manufacturing”, they codified many of the principles I had learned from Toyota over the years. The five principles you see here are the ones they defined in their seminal work on “Lean Thinking”.

Define Value: This principle emphasizes understanding what constitutes value for the customer. It's about identifying the features and functionalities of a product or service that customers are willing to pay for.

Map the Value Stream: Once value is defined, the next step is to map the entire process involved in creating that value. This includes identifying all the steps from raw materials to finished product delivery.

Create Flow: After mapping the value stream, it's crucial to ensure a smooth and uninterrupted flow of materials and information throughout the process. This involves eliminating bottlenecks and delays that can cause inefficiencies.

Establish Pull: Lean manufacturing operates on a pull system, where production is driven by actual customer demand. This helps to avoid overproduction and excess inventory, which can be both costly and wasteful.

Seek Perfection: Lean is a continuous improvement process. It's about constantly striving to eliminate waste and improve efficiency in all aspects of production. This involves empowering employees and encouraging them to identify and suggest improvements.

Over the years since the early 2000’s, these principles have been restated in different ways, and other principles have been listed in conjunction with these. For example, I often see the elimination of waste or standardized work as separate principles. But for this talk, I’m going to focus on these “old school” principles. The discussion about the switch to digital applies just as well to the principles that are not listed here.

When we move to the principles underlying Digital Lean, we find that the principles are the same! The pursuit of these principles may change with many additional tools, but the goals and principles of Digital Lean are the same as those of Lean. Let’s take a deeper look at these principles one at a time to see how we change our approach to each one. Also, in the coming weeks, I’ll be taking a deeper dive into each principle on its own.

Principle 1:? Define Value

As mentioned earlier, this principle is all about identifying value from the customer’s perspective. This means understanding the difference between what the customer is willing to pay for and what is non-value-add.

From a product point of view, analyses such as the Kano model show us that there are product features that are expectations or table stakes, while there are some features that are high value for the customer. Meanwhile there may be things in the product that the customer does not value. It has often been difficult to determine which is which in the past. Modern solutions give us tools such as sentiment analysis that uses data from multiple sources such as social media to provide customer insights that were inaccessible in the past. Advances in artificial intelligence are making these data analytics for customer insights more accurate than ever.

Connected products can also generate insights that were never available before. For those products that are able to send back usage data, companies can see which features are being used by customers and which are not. This can provide great insight into what customers will really value in the product going forward.

Also, the closer the production can come to being truly personalized, the more the product will align with what the customer values. Modern technologies such as 3D printing and flexible manufacturing can bring this closer to a reality in many industries.

Principle 2: Mapping the Value Stream

Traditional value stream mapping is a time-consuming and labor-intensive project. Once it is completed, it becomes a valuable tool for differentiating between value-add and non-value-add activities. However, it is a static picture and often does not capture the full complexity of the product flow. This can be done automatically through digital tools! Although I have only heard of this being done in custom solutions, the capabilities are there for any company to build this. And if any vendors are reading, please contact me if you believe your solution can do this out of the box – I can point you to a number of companies that would like it!

For manufacturers – here’s how to build it on your own.

You’ll need three primary solutions – a machine monitoring solution, a solution that tracks material movement throughout the facility, and a digital twin solution to bring it together. If the product, BOM and routing information is brought in from the MES or ERP solutions, you would have everything you need to automatically create your value stream maps (within the four walls of the facility). The machine monitoring solutions will provide detail of how long each job is taking within a given process. Although, this may need to be supplemented with a video-analytics solution if you have many manual processes within your plant to track cycle times within those processes. Advanced material tracking can identify how long materials are spending between operations. And the digital twin can pull all this information together to display the live picture of your value stream map.

However, the digital map is far more useful than the static one. First off, it will it be far more accurate for analysis. Every time a product goes through the process, the times at each operation and between each step is captured and added to the analysis. This not only shows the amount of time that materials normally take, or how long they are supposed to take, but it shows how long they actually take. And the full distribution of those times. It could also act as a live management tool that could highlight deviations from the expected route – whether due to rework or manual work-arounds on the shop floor. It could highlight when materials are “stuck” between process steps for longer than expected. All in all, it becomes a fantastic management tool to visualize what is supposed to happen in the plant and also what is actually happening in the plant at the current moment.

In order to extend the analysis beyond your four walls, you’ll need to add additional data collection to the analysis. You’ll need to collect information from warehousing, logistics and across the supply chain to get that complete picture. But all the technology is there today to make it happen.

Principle 3:? Create Flow

Principle three is all about freeing up the flow of materials through the facility. Ideally, this is done by organizing production into single piece flow through automated work cells. The advanced automation and robotics capabilities in third and fourth generation manufacturing can be of great benefit in making that happen. But even where production cannot be organized in this way, the goal here is to remove bottlenecks, interruptions and delays that disrupt the flow. Establishing continuous flow is critical for efficiency and eliminates waste associated with waiting, inventory and overproduction.

The digital twin of the value stream from the last slide is of great value in identifying where bottlenecks are occurring in the production process. Simulation capabilities exist within many of these solutions to test different layouts and flows within the facility to break these bottlenecks and improve the flow.

One critical disruption to flow is when machines have unplanned downtime. Machine monitoring systems and predictive analytics can be very effective in reducing these disruptions to the flow within the facility.

Many manufacturing operations in very high-mix environments cannot organize into clean value stream cells. For these facilities, advanced planning and scheduling solutions can be very useful for optimizing the flow of materials and minimizing delays through the production process. In these cases, look for solutions that can import data directly from the shop floor and utilize that information for fast replanning when conditions change due to downtime or other disruptions.

Principle 4:? Pull

Traditional push-based manufacturing resulted in a great deal of inventory and waste throughout the manufacturing process. Just-In-Time and pull manufacturing has addressed many of those issues to reduce inventory levels, overproduction, and other wastes.

Pull has often been achieved through manual, card-based Kanban systems. While these are still effective in many manufacturing environments, they do have some shortcomings. It can be difficult to manage the purchase of materials in environments with long and/or highly variable material lead times. In manufacturing environments with very high mix and very large number of items, stocking a kanban of items can present difficulties, too. E-Kanban systems can help address some of these issues, but in some cases it may be necessary to implement other approaches. There are pull-based planning and scheduling solutions that can help for these environments.

Advanced forecasting can also play a big role. The ideal situation in manufacturing is that materials are only produced when the customer places an order. This is possible in highly repetitive manufacturing environments, but many companies are not able to achieve this ideal. AI-driven forecasting solutions can be of a benefit here – the closer the forecast is to the customer demand the closer the alignment can be with production.

Principle 5: Pursue Perfection

Finally, the fifth principle is the pursuit of perfection. Zero defects is not a realistic target, but the pursuit of ever-increasing levels of quality should be the goal. This may also be where the clearest benefits of a digital lean approach are evident. The number of supporting use cases here are legion. I’ve picked out a few for this presentation, but this is really just a small sample of what is available.

First, all quality issues are ultimately the result of excess variation somewhere in the process. AI-based analytics can help identify where that variability is entering into the process and the ultimate root causes. These analytics can be fed through the detailed machine monitoring solutions that have been discussed many times so far. Additionally, video analytics solutions can be immensely valuable to identify when deviations from standard work are occurring and highlight these in the analysis.

When deviations do occur, vision systems can help to catch the non-conforming material much more effectively than manual inspections in many cases.

Additionally, many of these solutions can be tied into poka-yoke or error-proofing efforts. Pick to light solutions have been available for years, but very interesting work is being done with augmented reality solutions to take this to the next level. In addition, there are solutions available now that project the work instructions directly onto the work surface so that even novice operators can perform the work error-free.

And again, this is merely scratching the surface for what can be done with digital lean solutions in the pursuit of perfection.

Summary

As stated in the introduction, the core principles of lean do not change with a move to digital. However, Digital Lean provides a much richer toolset to pursue those principles than were available in the past.

That’s it for today! Once again, I’ll be doing a deep dive into each of these principles in the coming weeks. Thank you for your time and attention in reading this article.

If you have questions, or would like to talk about how to apply these concepts within your company, please reach out to us at VDI.

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