How Can Integrating Lean Practices With Digital Tools Secure Your Factory of the Future?

Why Are So Many Manufacturers Struggling to Scale AI Solutions on the Production Line?

Analyze insights from the BCG report Shaking Up the Factory Floor with Digital and AI. Discover why relying on tech alone leads to failure and learn the six-step framework for merging traditional lean methods with advanced analytics to achieve a scalable, data-driven manufacturing process.

Stop relying on outdated manual inspections—read the full summary below to access the six critical pillars that will ensure your digital transformation delivers actual value rather than just complexity.

Recommendation

AI and digital technologies have the potential to dramatically transform factory work and boost efficiencies for manufacturers, yet according to Boston Consulting Group research, many are failing to seize these new opportunities. Learn why achieving value at scale using digital and AI technologies, requires focusing on “people and processes” — not just technology alone. Gain insights into how best in class companies must integrate lean approaches with new digital and AI tools, while ensuring you have the resources and clarity of vision required to scale your transformation and achieve your desired “factory of the future.”

Take-Aways

• Update manufacturing processes with digital and AI tools, aligning lean practices and advanced analytics.
• To seize financial and nonfinancial benefits of new technologies, clarify your vision of the future.
• Scale your lean digital and AI transformation by reflecting on six key areas.

Summary

Update manufacturing processes with digital and AI tools, aligning lean practices and advanced analytics.

Despite the potential benefits of incorporating AI and digital technologies into factory settings, many manufacturers are failing to seize opportunities. According to a Boston Consulting Group survey of nearly 1,800 manufacturing executives worldwide, across seven industries, 89% of companies have plans to incorporate AI into their production networks, while 68% have already started doing so. But only 16% of companies have managed to reach AI related targets. In fact, nearly every executive reported facing challenges when it comes to scaling AI solutions.

“New generations of workers are accustomed to real-time digital interfaces. The paper and pencil approach of many lean practices is decidedly less engaging, and lack of engagement jeopardizes the sustainability and quality of lean systems.”

There are numerous benefits to harnessing the power of digital and AI technologies on the factory floor. Workers can use data driven insights to boost productivity, communicate more effectively, and implement more effective solutions. AI can also improve the quality, safety, and reliability of production processes, using predictive analytics, while helping companies reduce waste. Companies hoping to leverage the vast potential of these technologies should embrace lean practices, which help frontline workers boost efficiency. However, traditional lean approaches alone aren’t enough — You must integrate lean practices with new digital and AI tools that provide workers with advanced data analytics that support better problem-solving and decision making. For example, in a traditional lean manufacturing process, a human worker would detect issues and bugs via visual inspection, but today’s workers can use digital inspection apps and AI predictive algorithms to detect anomalous machine behavior.

To seize financial and nonfinancial benefits of new technologies, clarify your vision of the future.

Resist the temptation to rely on “off-the-shelf” technology solutions from multiple vendors, as doing so can result in poorly integrated systems with confusing interfaces and overlapping functionality. Also be wary of the fact that solution developers often lack firsthand knowledge of your shop floor operations, which can lead to misaligned technological solutions. Manufacturers must also navigate the additional challenge of integrating various solutions and datasets from multiple sources into a single cohesive platform that produces actionable analytics.

“To capture the potential of technology deployments, a manufacturer should start by developing a clear vision of its factory of the future.”

To overcome the technological challenges of implementing AI and digital solutions into a factory setting, work to clarify your vision of your “factory of the future.” Start by defining the processes you’ll rely on, then integrate these into a supportive technology stack. Successfully using AI and digital tools to drive your distinct vision can help you achieve financial benefits, such as improved cost structures, increased productivity, and enhanced output quality. Roughly 70% of manufacturers surveyed reported a reduction in missed OTIF (on time, in full) targets, after incorporating digital and AI tools. Manufacturers saw non-financial benefits as well, such as improved customer satisfaction, worker safety, and engagement.

Scale your lean digital and AI transformation by reflecting on six key areas.

To unlock value at scale, consider these topics as you embrace your AI and digital transformation.

• Vision. Define your user centric future factory vision, and the organizational capabilities you need to develop to achieve this desired future state. Identify digital and AI use cases that best reflect your vision.
• Talent — Take steps to upskill staff to ensure digital and AI literacy, while identifying or training champions to help accelerate the adoption of new technologies.
• Orchestration — Technology and business leaders, deployment teams, and third parties must collaborate effectively, aligning their actions to prioritize your desired initiatives and identify potential challenges.
• Data infrastructure and architecture — Reflect on the investments you’ll need to make to achieve your long-term vision, such as creating the data infrastructure required to hold AI algorithm training data.
• Data governance — Ensure the availability, security, and accuracy of data with robust data governance.
• Scalability — You should have consistent access to clean data sets and the required data infrastructure across your production network, enabling you to implement a best-in-class lean production system.

About the Authors

John Knapp, Kasey Phillips, Ian Sullivan, Alex Yurek, Denis Doerbandt, Kaushik Shubhank, and Melissa Hartwick are professionals at Boston Consulting Group.