For the first time since January 2016, ISM’s manufacturing index fell below 50% in August. It fell even lower in September to 47.8%, marking the first contraction of manufacturing activity in the economy after 125 consecutive months of growth.
Manufacturing now faces serious challenges as new orders, production, and employment start contracting and the risk of a long term slowdown looks more real than ever. Almost every team and plant is now being tasked with taking cost out of the equation, and the path to getting there isn’t immediately clear.
Suffice it to say, now seems like a difficult time to explore new initiatives that require a significant upfront investment for a long term ROI. Industry 4.0 tools and systems offer substantial benefits, but if it takes large sums of money and years to realize those benefits, is now really the time to explore them?
The answer is yes. Now is the exact time when Lean initiatives that leverage industry 4.0 technologies can help to recapture cost and generate almost immediate ROI in your operations.
You Don’t Have to Be Caught Up to Leverage Industry 4.0
First, let’s get the most common myths about digital transformation out of the way.
The top-down approach to technology implementation demands an iterative, long term approach. Plants still operating on the standards of Industry 2.0 without significant automation can still benefit from the industry’s newest technologies, when applied strategically.
But it’s difficult to get there when these initiatives historically start at the top. A typical ERP integration, for example, takes anywhere from 6-18 months. It’s a sweeping, transformative process that touches almost every sector of an organization. Plant managers and executives see software and assume it will follow the same path. In reality, though, companies that do the following can break through much faster and realize cost savings almost immediately:
- Retooling an organization to adjust to modern channels and resources.
- Shifting the focus to execution to act quickly and generate value immediately.
- Addressing the broken managerial model to leverage the front line for immediate benefit.
Consider that 90% of your organization is on the front line. Why then don’t more companies invest there first? Not only is it incredibly impactful, but it also offers a lower barrier of entry and a much faster return.
The Lean 4.0 Approach to Digital Transformation
Top-down methodologies are time-consuming and often end in failure. In today’s economic climate, with uncertainty looming, fewer companies can afford to take that kind of leap.
Lean 4.0 provides a better path, ensuring:
- Faster time to implement new tools and test for results
- Greater ease of use that makes scalability much simpler
- A quicker deployment that leads to immediate ROI
By leveraging Lean Tools in an Industry 4.0 context, including 5S, Andon, PDCA, Kaizen, and GEMBA, companies can realize immediate changes. All of these Lean tools are about eliminating waste, and the biggest source of waste is unused human creativity. A connected worker platform is designed to unlock the hidden factory and the tremendous brainpower of your workforce, turning them into knowledge workers.
Generating Fast ROI with Lean 4.0
Large companies are now able to run pilots in just days with select industry 4.0 tools that target individual issues on the front line. This allows them to:
- Address defects and improve quality on a short runway in a scalable way.
- Streamline efficiency and reduce waste in several forms: material, labor, and creativity.
- Boost productivity and improve training to ensure a high quality of standardized work.
- Save time and money while improving transparency in routine efforts.
Fiat-Chrysler Automobiles was able to eliminate paper checklists, implement real-time data collection and maintain full control of units wherever they are by implementing a connected worker platform. Kiekert Mexico eliminated several cumbersome manual processes, automated data collection and reporting processes, and reduced waste in several processes to improve efficiency. These pilots took mere days to implement and evaluate to determine value. Compared to multi-month transformation efforts, the results were incredibly quick and the ROI was substantial.