👉 1st White Paper on the digitization of plant operational management 👈
November 15, 2022

Lean manufacturing 4.0: what impacts for the factory of tomorrow?

Over the last few decades, companies around the world have been looking to improve their production methods, seeking a balance between quality, time and costs. This quest for continuous improvement is the objective of Lean methods. If we take a closer look at the industrial world, we can see that increasingly rapid technological advances are forcing factories to adapt to remain competitive. We talk about industry 4.0. What is the link between Lean Manufacturing and Industry 4.0? How can these concepts be combined to benefit industrial players?

Lean management, industry 4.0
What are we talking about?

Before getting into the heart of the matter, here are a few reminders about the concepts we are talking about in this article.

The key concepts of lean manufacturing 

The concept of "Lean manufacturing" is attributed to Toyota. Indeed, after the Second World War, the company completely revised its way of producing vehicles to meet the growing demands of customers. With its success, this philosophy quickly spread throughout the world. 

Lean consists of optimizing the entire production chain without putting customer requirements in second place. The aim is to improve the production flow as a whole. For example, the aim is to reduce the rate of rejects, or to avoid unnecessary travel. But there's more to lean than that. The idea is to provide a sound basis for operational excellence by creating a culture of continuous improvement and empowering employees.

What is Industry 4.0

The concept of Industry 4.0 implies the use of innovative technologies within plants. This covers technologies such as Industrial Internet of Things (IIoT), cloud, edge computing as well as other key concepts such as machine-to-machine communication (M2M) and cyber-physical systems (CPS).

Indeed, the foundation of the fourth industrial revolution lies in automation. The exchange of data collected by the above-mentioned technologies serves the objective of making industrial practices more efficient and autonomous.

Read about it: 

Thus, faced with the technological challenges of the current industrial context, the so-called "Lean" methods have also evolved.

Lean manufacturing 4.0: what impact for factories?

At the crossroads between industry 4.0 and lean manufacturing, Lean manufacturing 4.0 is also called "Lean Automation", "Smart Lean" or "Lean industry 4.0". 

In order to maximize their chances of achieving operational excellence, it is in the best interest of plants to implement lean methods coupled with Industry 4.0 tools. 

Indeed, the data retrieved in real time enables ideal collaboration between humans and machines, providing a global view of production and enabling operators to make any necessary adjustments in real time.
A study by BCG, moreover, shows that companies that combine lean and industry 4.0 can achieve a 40% reduction in costs. In other words, the combination of lean and industry 4.0 can double the savings achieved compared to the application of each of them separately.

The combined contributions of Industry 4.0 and lean manufacturing 

The Lean Manufacturing 4.0 approach amplifies the benefits of each of these concepts separately. Here are some examples:

1. Deepen the customer-centric vision

In the digital age, it has never been easier for manufacturers to get a clear picture of their customers' needs. For example, advanced data analysis (including artificial intelligence) allows for trending and even prediction of future customer needs and requirements. 

Another example is mass customization. Today, customers benefit from relatively advanced customization options, made possible by the integration of automated and semi-automated robots into production lines. 

In this way, one of Lean's key concepts, "just-in-time", is reinforced by the technological levers of Industry 4.0.

2. Go further towards continuous improvement

A continuous improvement program on a production line can selectively modify a variable, test it in real time and review the results accordingly. New technologies such as simulation tools enable manufacturers to test their hypotheses first in the virtual world, before implementing them in the physical world. 

This is another way to reinforce a key lean concept through Industry 4.0 tools.

Limits of lean manufacturing 4.0

Although Lean Manufacturing 4.0 is a valuable tool for achieving operational excellence, we feel it is essential to mention certain limitations. Indeed, it is important to keep in mind that Lean Manufacturing 4.0 is a philosophy, an ideal to strive for, and not a model to be replicated at all costs. 

The superimposition of new technologies can ultimately make a production line more costly to run. What's more, it requires an increase in the skills of both operators and managers. The shortage of skills on the market is a major concern for manufacturers, who are struggling to recruit their talents. 

If in-house skills upgrades are not possible, plants have to rely on external expertise to maintain these technologies. In both cases, there are costs to consider.
On this subject: Talent management, a key strategy for manufacturers.

In summary

Lean methodologies have helped companies the world over to improve their productivity and customer experience. Now, thanks to the technologies driven by Industry 4.0, manufacturers benefit from a clearer understanding of the entire value chain to detect opportunities for improvement and, ultimately, gain competitive advantage.

It is therefore no longer one or the other of these concepts that should be considered, but rather the combination of these two visions. Lean manufacturing 4.0 is still in its infancy, especially since we are already talking about the fifth industrial revolution.