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How to use digital lean to fast-track transformation

How to use digital lean to fast-track transformation

For several decades, lean management has achieved stellar success in complex manufacturing environments in nearly all industries. Even today, lean is still the most powerful toolbox on the production floor. But now, with the advent of digital manufacturing, lean is being catapulted to another level. A recent study by global consulting firm, A.T. Kearney, indicates that traditional lean’s focus on shop floor execution has become too narrow for today’s complex, linked value chains and adaptable manufacturing environments. What’s needed, according to the study, is a digital lean approach.

A digital lean approach constitutes a combination of design thinking, lean management practices, and advanced digital technologies. It is an integral part of digital manufacturing which is, in turn, one of the key pillars of the emerging digital supply chain. Indeed, a whole suite of new methods and tools are being developed that will change the economics and push the frontiers in operational optimisation. Other pillars of the digital supply chain will be digital planning, digital supply, and digital logistics.

Traditional lean – a philosophy that helped turn around manufacturers over the past couple of decades – is based on the idea that tasks should be executed faster, better and more cost-effectively, with employees engaged as full partners in continuous improvement. Digital lean, on the other hand, focuses on optimising the entire manufacturing set-up – from changing workflows to questioning process steps and their sequences.

Some of the questions that digital lean answers include:

  • How can material flow be optimised across every step of the value chain?
  • What additional savings can be generated by making changes in the value chain?
  • How can manufacturing systems be made more robust?
  • Where do the highest failure rates occur?
  • How can potential dependencies between failures be addressed?

Digital lean allows you to systematically test hypotheses, simulate scenarios, and calculate detailed costs without the risk of pilot tests or actual implementation.

Supply network

This approach proves invaluable at three levels, in particular, when planning a digital transformation:

1. It spots redundancies in the design phase

Lean identifies complexity before digitisation even starts — this is an investment that pays off many times over. It singles out unnecessary process steps that will not add client or overall business value.

2. It simplifies the building phase and keeps it iterative

Lean practices support a simpler transformation with less displacement of legacy technologies, people and processes. This helps companies move faster and with fewer risks of surprises.

3. It optimises existing systems and operations

Applying the digital lean approach to managing infrastructure and legacy technologies makes enterprise operations more cost-effective and agile. It also helps release resources for investments for the future instead of locking them into maintenance.

While the big picture goal is to spin a digital thread connecting the virtual product design process with a compatible set of technologies for planning and testing production floor equipment, experts caution manufacturers to avoid biting off more than they can chew.

If your organisation is grappling with legacy systems — technologies, processes and even people — it can derail your progress. Many companies often do not have the necessary sophisticated change management capability to transform effectively and at the correct pace. The challenge is not only frustrating, it’s also costly. Of the US$593 billion that companies spend annually on digital projects, almost US$400 billion is wasted, according to recent data from the Genpact Research Institute.

That’s why only organisations with a sufficiently high level of operational excellence will gain any benefit from this next stage of manufacturing evolution. This level of excellence can only be attained through an incremental, maturity-based approach to operational excellence as well as the fundamental people engagement practices. 

The challenge today is determining how to harness digital technology’s power to adapt and compete. By embracing an integrative approach to lean, with digital in mind, you can simplify complex processes and increase productivity. You can execute faster and more accurately, and adapt over time. The result is a rapid digital transformation with scalable and cost-effective business process platforms tied to enterprise-wide results.

DOWNLOAD the eBook The Business Case for Integrative Improvement to find out how to make a maturity-based, integrative improvement system part of your digital transformation journey.

 

About TRACC
The TRACC framework helps organisations build standardised and integrated good practice and performance capacity across their Plan, Source, Make and Deliver functions. Simultaneously it accelerates their collaboration and alignment capacity to build world class end-to-end value chains, enabling the organisation itself to become the ultimate source of sustainable competitive advantage.

 

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