Oct 11 2015

Lean and Industry 4.0 – Opposites or Complements? | Wiegand’s Watch

This is a translation of Bodo Wiegand’s latest newsletter, about Lean in Germany, followed by my comments:

Lately, I was at a company where the CEO told me “Mr. Wiegand, Lean is over –  all the talk now is about Industry 4.0”. Well, I hadn’t  seen this coming. Then:

  1. Lean would have been just a passing fad like many management theories.
  2. This company would already be Lean, with all the processes to be designed without waste.

So if Industry 4.0 takes over from Lean, we can say goodbye to the philosophy of creating value without waste, because that’s what Lean is about: creating value without waste.

I do not think that’s right. Nor do I believe that there are companies that are so Lean that no waste is present in their processes. And I’m not talking only of the actual value-added processes, but also of the minor and sub-processes, for example in the administrative, service or maintenance areas.

Let’s look at the administrative areas. There, the average value added in Germany is 50%. By Industry 4.0  can only optimize the value-added areas, and slightly if at all.

The conceptual model of Industry 4.0 is: create the Internet of Things, network all machines and products,  and involve people. Then you’ve got the perfect, low-waste production system. It works — perhaps– if all the products, all interfaces and all processes are coordinated and aligned.

We should have learned this from past experience, for example, with SAP. About the year 2000, there was a run on SAP, based on the belief that we could use it to optimize and streamline the indirect work. it was not even close. When I model my old non-optimized processes in SAP, it doesn’t get any better than before.

Neither more nor less, we need to align our processes to Industry 4.0, and that means not only production processes, but also the production support processes, such as administration, order processing, maintenance, and service.

Therefore Lean and Industry 4.0 complement each other; they are not alternatives. Just as many have now realized that Six Sigma without Lean or Lean without Six Sigma make no sense, but that the two complement each other.

So first I look, at what processes I acdtually need  and in which form. Then I stabilize the required processes and make them reliable with the help of Six Sigma. For industry 4.0 I need absolutely reliable processes, and it means that, to introduce Industry 4.0, I need Lean and Six Sigma.

But it is still not enough. There’s still more that is missing.

We must recognize and accept that the machine does certain things better than we can. Take the example of the autopilot on the plane. Because we have become accustomed and accept him.

But don’t we feel strange about a machine driving our car? OK, the computer won’t use a cell phone while driving, and won’t be distracted by anything else. But driving a car is multidimensional, and actually too complex for a computer, or isn’t it?

No, ladies and gentlemen, apparently, it isn’t.

As we speak mini-satellites are being tested in space, which communicate with cars,  manage traffic and can predict situations. We just can’t throw an old-timer in, right? And therein lies the problem. I need safe processes and I need a person who understands the machine and knows when to take over.

And I need people, who develop machines and products with which we can work more efficiently and effectively with the Industry 4.0  model. In other words,  I need Industry 4.0, Lean, Six Sigma and people as part of the overall system. Only then will we be able to use Industry 4.0 to make production processes more efficient and more powerful, and realize our dream of business on demand and the associated batch size of 1.

We still have a very important part of the industry 4.0 not yet considered: the product. Only when the products of Industry 4.0 have standard interfaces and are configured with modular structures, will the desired effects occur.

Only with modularity can variability and complexity be controlled. If we believe that we can model and control seemingly ever growing complexity with Industry 4.0, we are making a big mistake. Only when all address together people, machines, products and processes can the Industry 4.0 mode  be realized and help effectively support the Lean philosophy of “creating value without waste.”

Only then will we be able to truly reap what we have sown.

Michel Baudin‘s comments:

I have commented last July about the Internet of Things (IoT) in manufacturing and Industry 4.0, but Wiegand’s points require further elaboration.

First, the “many who have now realized that Six Sigma without Lean or Lean without Six Sigma make no sense, but that the two complement each other” do not include Toyota. If you go beyond keywords to what “Lean” and “Six Sigma” cover, it is clear that they don’t belong in a list together. Under “Lean,” you find a complete approach to the management and technology of manufacturing; under “Six Sigma,” the use of statistical design of experiments to achieve process capability, and the black belt system to implement it. It is comparable neither in scope nor in achievements.

Also, just because the German government starts a research funding program called “Industrie 4.0” to usher in a “4th industrial revolution” based on IT in manufacturing does not mean you have to believe it  will happen. The history of IT in Manufacturing provides plenty of reasons to take the stated goals with a grain of salt. This program may yield useful technology, but the grand vision painted in its promotional materials strains credulity.

The parts of Industry 4.0 — including “Cyber-physical systems” controlling physical processes through virtual copies, the Internet of Things on the shop floor, and cloud computing for services — partially exist already in some form in some factories. What is far-fetched is the notion that their integration will constitute a revolution on a par with the advent of steam power in the 1750s or the assembly line in the 1910s.

At best, these technologies are just enablers. As Wiegand points out, using them to automate obsolete approaches will yield no benefits. They will only be useful to the extent they are used in support of improvements in operations.

 

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