The real challenge of Industry 4.0

In the midst of “Industry 4.0 fashion”, many companies hope that the latest tool, such as innovative software or technology, can drastically improve performance in the business area where it will be used.

In fact, at the time of purchase, the typical questions are:

• What will this software add to our processes?
• How can we justify its purchase?
• How much money does it save us?
• How can we get the most out of this new technology, spending as little as possible?
• How many people could we eliminate?

Once purchased, then, you realize that there is a lot of work to be done on the existing processes if you want to get the most out of the new technology. This may seem logical at first, but the real point is that in a Lean company that innovates, the first step is always to reduce waste in a process, followed by the search for opportunities that a tool can offer to meet this primary objective.

The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.

Bill Gates

This explains why Lean companies invest so much time in software selection and customization before operational introduction. Effective processes and excellent, integrated people can only be helped—never replaced—by tools on their path toward continuous improvement.
The large amount of time spent in many companies to make new tools work, which are sometimes acquired too quickly, must make us all reflect.

Below are some criteria, taken from the book “Lean Development and Innovation: Hitting the Market with the Right Products at the Right Time” , which can be useful in choosing the tools to be adopted.

Criterion 1: Integration and ease of use

It is important to always ask whether the technologies can be easily integrated or interfaced in a single system, easily accessible from the same computer. This will first of all facilitate the use in itself, as well as ensuring a reduction of time wasted due to the search for information not present within the workstation.

Thinking in advance about the people who will use the tools will help us reduce different types of waste from the start, which we often realize after implementation. Think of the different software that a designer could use during the development of a new product, or the case in which software used by two different departments may contain useful information for both, in specific phases of some jobs (e.g. standards and guidelines used during production and design).

Easy access is a must to make information usable in the shortest possible time: in lean companies, simple tools and complex software coexist within integrated platforms designed to simplify access and ensure maximum ease of use.

Criterion 2: Process support

Technologies must support the process, not drive it. Sometimes we are lured by the sirens of “technology sales” consultants, who push us to buy the latest technological innovation so as not to be left behind.
Before making choices, it is necessary to take these two aspects into consideration:

• Technology evolves much faster than the processes themselves: today’s state of the art will be outdated tomorrow. We could renew the entire range of tools and software in the company every year, but I don’t know how much it suits us.
• Every time we change a process to pursue a new technology we face instability, confusion in people, waste of time and resources. This is why it is advisable to carefully evaluate the impact of introducing new tools in the organization.

This does not mean that we should not take advantage of the opportunities that technologies offer us, on the contrary. It means that it might be better to shift the focus to the result we want to achieve through the tool, rather than being focused on the tool itself.

If the same result can be obtained with a simpler or even already existing tool, with much less effort, why waste precious energy?

Among the many possible examples, I can think of the use of project planning and management tools.
Sometimes complex computer systems are used, from complicated Excel files to specialized Project Management software, even in cases where the result could be achieved with much less effort and much more effectiveness with “poor” systems.

Criterion 3: Support to people

In a company based on excellence of its products, driven by the talent and technical expertise of its people, technologies should be at the service of the people themselves to maximize their value and talent, reducing waste of time. Tools and technologies can never replace human skills, but they should be seen as excellent complementary allies. Often many reworkings in product and process development activities are due to lack of synchronization between the activities of people from different departments.

An example: a designer changes something in a design that has an impact on a production equipment or another design of another designer but, due to the absence of systems able to promptly warn about changes made by others, the modification goes unnoticed, except to force corrective solutions, a posteriori, causing disservices and rework.

Criterion 4: Support for standardization

The whole framework of Lean Thinking is based on standardization. This principle should not escape even the tools used. Both to verify that they are consistent and integrated with other existing systems, and to verify that they effectively support the company’s standardisation of skills and processes. Design tools, for example, should promote ease of use and communication both within the company and externally when using supplier resources.

Sometimes, on the other hand, some tools promote the standardization of operational processes, as in all cases of process standards creation. The development of tools that promote standardization in the company is a very important phase, which we carry out together with customers when the objective is to make the organization more and more autonomous in order to have results independent from the people involved, Levelling performance towards a common standard and stimulating continuous improvement.

Criterion 5: Support for organizational alignment

An important element for any project and organization is to have common goals and alignment of vision. When these are missing it is inevitable to suffer the enormous waste due to the bad communication and the multiplication of different directions put in place by individual people.
Some Lean tools are excellent for the alignment process. Here are a few examples:

1. Concept Paper
   Document containing all the information relevant to the development of a new product: objectives, teams, market analysis, cost targets, trade off curves, etc. The concept paper, once approved, becomes the reference document for all members of the product and process development team.
2. Hoshin Kanri
   It is a tool to support the process of elaboration and sharing of the corporate strategy, also called “Strategy Deployment”. The tool itself is a simple A3 sheet in which are masterfully synthesized, and linked to each other, the following aspects of the business strategy:In Lean companies generally has an annual cadence and is done “cascading” the different levels of company hierarchy to ensure a strong sharing of vision and objectives.
   • the company’s strategic objectives in the medium to long term;
   • the tactical objectives in the current year, with quantification of expected results;
   • the projects needed to achieve the expected results;
   • the operational processes and key indicators by which progress will be monitored throughout the year;
   • the responsibilities of the individuals involved for each of the projects and objectives.
3. Obeya System
   A tool that ensures alignment between people during a project, aiming at simplifying communication, making it visual and accompanying it with a number of elements that facilitate social integration.

Criterion 6: Organizational learning support

Many companies spend real assets to acquire tools for Knowledge Management, but despite the massive investments, Many still have serious difficulties in making organisational learning a real and solid reason for competitive advantage vis-à-vis competition.
In reality, the hidden strategic lever in every company is the tacit knowledge, the deep know-how possessed by people, rather than the forms of explicit and formal knowledge.

When pursuing the more people culture tool, the risk of not getting much out of Knowledge Management investments is very high. The focus should be on tools that help companies change the way things are done, to bring out hidden tacit knowledge. Examples of tools that can support organisational learning include:

1. Hansei
   The practice of continuous improvement which consists in looking back, objectively evaluating the results achieved and thinking about how a technical or organizational process can be improved.
2. A3 Report
   A3 size sheet used by Lean companies to support the communication process within a project and as the basis of the continuous learning business process. It can be used to make a progress report on a project, to prepare a proposal for a new opportunity, or to solve a problem.
3. Know-how database
   A centralized system that collects and makes available to all the knowledge stratified in the company on products and processes. In a Lean company this database is always built and maintained by direct users, who thus transmit and update the fruits of their own knowledge. The division into specific sections allows to assemble different portions of know-how in the same place: Standards, Guidelines, Engineering Checklist, A3 Report, hansei, list of common parts etc., are all contained and updated in this database.
4. Engineering Checklist
   It is a list of questions, usually based on mistakes already made by someone, which aims to avoid repeating the same mistakes. They serve as a guide each time a new product or process is developed. Creation and updating by the specialists directly concerned. They can become huge and valuable containers of knowledge accumulated over the years. In the end they resemble a checklist for aircraft pilots: they cannot replace it, but they can quickly ensure that there are no vital errors.
5. Evaluation Matrix
   These are the matrices used in decisions during product or process development, particularly downstream of the Set Based Concurrent Engineering process.
6. OPL (One Point Lesson)
   In perfect “A3” style, it is a matter of condensing on one page an entire procedure on a very specific subject to be taught in any business area. The aim is to minimise the time needed to understand the content, using images rather than words, focusing on clear, essential and effective messages. OPLs are generally placed near the point where they will be used: office, plant and wherever they will be used.
7. SOP (Standard Operating Procedure)
   Tool that helps to standardize all the processes in the company. It is a Lean re-edition of traditional procedures. The difference lies in the type of processes represented, always zero waste goal, and in the mode of representation, aimed at an easy understanding and extended use to anyone who may need it. This tool therefore has a dual function: standardisation and organisational learning.