Digital Kaizen and Why It Works

4 minutes, 5 seconds read

Level: Beginner

What you will learn:

  • Digital Kaizen defined
  • Similarities and differences in traditional and digital Lean
  • Solutions to support digital Lean
  • Challenges to avoid

Every company faces some type of problem, and these problems may evolve over time. Yet companies that effectively adopt a Kaizen framework for improvement may find that over time they’re able to drive less significant improvements.

For example, a report on digital Lean from global management firm A.T. Kearney indicates that early Lean manufacturing initiatives often saw 10% to 15% increases in productivity based on waste reduction, while today a 2% to 3% productivity boost might be considered an accomplishment. Why is that?

Well, one reason is that most Lean changes and Kaizen improvements have been focused on maximizing visible, factory floor initiatives. Yet many organizations, from manufacturing companies to construction firms, are moving to a more digital realm. By moving to digital Kaizen and Lean, organizations find they examine production challenges in a completely new way.

Digital Kaizen explained

Traditional Lean, as A.T. Kearney’s report defines it, focuses on continuous improvement – or Kaizen – as driven by a goal of better meeting customer demands. It focuses on eliminating production inefficiency, error-proofing processes, and engaging production staff.

Digital Lean, on the other hand, focuses on improving the manufacturing setup by changing workflows and examining process steps throughout the value stream using new digital tools.

This reason for this, the report explains, is that today’s value chains and production lines have become digitally linked. As a result, it is critical that companies look beyond the activities taking place on the shop floor alone. Taking a bigger view to focus on data and digital analytics gives companies new insight into potential production improvements.

Comparing traditional and digital Lean

Traditional Lean focuses on reducing waste based on the current situation and what can be seen. Digital Lean, however, uses advanced tools to simulate alternate time sequences and analyze processes’ invisible factors and parameters. As the Digital Lean report puts it, simulation tools can test hypotheses in a digital world before ever applying them to the production line. These types of tools might include 360 degree simulation and holistic modeling.

In addition, today’s Internet of Things-connected technology means that many companies now suddenly have at their fingertips massive amounts of data. By using digital tools to analyze this data, organizations can find new ways to improve processes throughout their organization and supply chain — and find new benefits.

Share a greater impact

Continuous improvement, for example, becomes much easier when using an innovative digital platform. Through the use of modern dashboards, managers can boost collaboration and monitor Kaizen teams’ performance, the impact of tested initiatives, and the people making the biggest difference at a company. These tools also can help teams to capture and share the entire improvement process, from identifying a problem to experimenting and implementing a solution.

Achieve bigger breakthroughs

Management consultant Arthur D. Little identifies three phases of Lean adoption. During the Lean Exploitation phase, companies commonly achieve performance growth of up to 8%. During the Lean Excellence phase, improvements tend to stabilize at about 1%. It takes a shift to digital Lean to see a further step-change in improvement.

Types of digital solutions

Arthur D. Little identifies five types of digital technologies that can lead to new levels of Kaizen improvement:

  1. Cognitive tools use pattern recognition based on big data to automate tasks. For example, big data analytic tools or autonomous transport systems.
  2. Connected tools incorporate machines, tasks, and more through the collaborative use of information. For example, smart machines.
  3. Virtual tools improve productivity by transforming physical conditions into virtual spaces. For example, augmented reality.
  4. Human centered tools design new workplaces through the use of collective knowledge. For example, virtual workplaces.
  5. Value-added tools define new business models through the use of new core technologies. For example, 3D printing.

Challenges to avoid

Digital Lean can help companies realize a radical performance increase of up to 50% – or more. However, this demands that companies coordinate their efforts and prevent initiatives from happening in silos.

In addition, companies must adopt technology with a plan for how to maximize its benefits across the entire value stream. Finally, companies must have access to reliable, high-quality data to maximize these digital benefits.

Of course, it’s also important to continue to apply principles of Kaizen to any digital transformation. By identifying problems early and often, companies can maximize their potential for benefiting from digital Kaizen.

Next Steps

For More Information:

Digital Lean: The Next Operations Frontier

Digital Lean Management

6 Continuous Improvement Tools and Techniques

PDCA Cycle: A Critical Tool for Driving Any Kaizen Process

Role of Kaizen in Digital Transformation


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