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Lean production meets Industry 4.0

Woman shows Bosch Production System on a tablet. Source: Sylvia Stockbauer

When lean production meets Industry 4.0 in practice, the one does not necessarily complement the other. Surprised?

As software experts in the field of Industry 4.0, we were rather surprised by this realization when we took part in a lean production training. Why? When it comes to introducing Industry 4.0 solutions, decision-makers and experts from both manufacturing and IT have certain expectations. In general, they expect that the mere possibility of storing and analyzing large quantities of data – along with expanded automation and monitoring functionalities – will deliver increased manufacturing efficiency, transparency, and flexibility as well as fault prevention. On top of this, Industry 4.0 solutions can ideally analyze data in near real time. Right across the value stream from suppliers through to customers.

Why might such a theoretically powerful combination fail?

I’ll use a few examples to show why these expectations can’t always be met.

Industry 4.0 projects as “autonomous milk runs” give rise to self-organizing, flexible materials transportation systems for supplying production stations – in place of cyclical material supply, which is defined in the Bosch Production System (BPS) as an element that helps implement lean production.

At first glance, autonomous milk runs contradict a series of BPS principles:

What is cyclical material supply?

Cyclical material supply is a method to provide the right components in the required quality and quantity, at the right time and in the right place. The parts and products are supplied and removed in a standardized manner: in a fixed rhythm, on a defined route, and in the smallest possible units (milk run). (Source: BPS Handbook 2016)

  • They reduce the transparency of internal logistics streams.
  • The resulting lack of standardized materials transportation can lead to a situation in which deviations from plan and hence faults are no longer immediately detected.
  • A switch to autonomous milk runs turns the calculation of maximum replenishment times into a complex or even impossible task.
  • Further optimization becomes more difficult and/or time consuming.

Value streams in manufacturing are generally so complex that a change at one point (e.g. software-supported optimization of cycle times) can have a major impact all along the production line.

In the case of software-based monitoring of cycle times, there can also be employment law consequences, leading employees to reject what they see as pervasive surveillance.

And finally, if data analytics and other software doesn’t provide experts with the reasons for certain outcomes – which would put them in a position to exercise smart control – then the principle of “responsibility” is compromised.

The principles and elements of lean production that stand behind the points I’ve mentioned are essential components of the continuous improvement process (CIP) in production. In turn, continuous improvement is the way to achieve sustainably waste-free processes.

How to ensure that Industry 4.0 and lean production become a powerful combination

Lean production and Industry 4.0 can synergize only if

  • production systems have been suitably designed (“first process maturity, then Industry 4.0”) and
  • IT experts understand the complexity of the production systems and can offer appropriate advice (“combine manufacturing & IT expertise”).

This is why Bosch places such emphasis on closely interweaving the BPS and software experts, a measure which also ensures that the kinds of mistakes mentioned above are avoided. The software engineers are given the tools to understand and resolve any conflicting principles that may arise. They are encouraged to implement Industry 4.0 in the Bosch production sites in accordance with BPS principles and elements – with the goal of effectively combining lean production and Industry 4.0.

Training courses exist for software experts who are helping to implement Industry 4.0 solutions in Bosch’s 250 plants around the globe that also use BPS. I myself was able to take part in one of these training courses and work on a project to reorganize a simulated product line according to consumption control principles in three stages. This was done using classic lean production approaches: we implemented the pull principle with kanban cards, optimized cyclical material supply, created transparency of goals, etc.

Why Industry 4.0 software engineers need lean production knowledge

In our example, the software experts have learned and observed the guidelines in order to maintain the requisite transparency, personal responsibility, fault prevention, and standardization when new Industry 4.0 solutions are created and introduced. This includes the following measures:

  • Automatic software-controlled rescheduling requires confirmation by the relevant production expert. As part of this measure, the software notifies the expert with information about the reason for the required rescheduling.
  • Replacement times must be guaranteed despite automation.
  • The production processes must already be mature and understood before Industry 4.0 is implemented.
  • Gemba walks remain a key part of improvement work. You can only get a proper overview on the shop floor. Software must support this.
  • Transparency must be ensured at all points of the changeover when introducing the new software. This may involve running manual and digital systems alongside each other for a defined period of time.
  • The digital data must be prepared such that the production worker is able to immediately identify deviations and recognize the causes.
  • Some data analytics expertise must also be available on the shop floor. This can mean that the data science experts in the Industry 4.0 project should initially accompany the acquisition of this expertise with respective trainings for the production site experts.

What has your experience been? How well do lean production & Industry 4.0 complement each other?

More on Industry 4.0

Get more information on lean production and Industry 4.0: Why value stream thinking is a common denominator.

Customer case study: Learn how OSRAM is putting Industry 4.0 into practice.

Where does Industry 4.0 stand? We are checking the facts.


  • 16. January 2017 at 11:43

    Dear Stefanie,

    Well Said ! and I agree that the success of Lean – Industry 4.0 is only possible by ensuring that our manufacturing processes are mature enough to handle the Industry 4.0 solution. The cross- awareness of the implementers (Manufacturing & IT personnel) is also a critical factor as pointed out.

    I have a LinkedIn post on the same topic and I see great value in sharing your blog along with it. ( Hope that this is fine.


    Jerin jacob

    • 16. January 2017 at 15:47

      Thanks for your thoughts, Jerin.

      Great to see that 1) “first process maturity, then Industry 4.0” and 2) cross-training of manufacturing & software/IT expertise both seem to be critical factors for you as well.

      You are welcome to share more of your findings on successfully applying I4.0 from your expert perspective in a producing company. Right here is great 🙂

  • 6. January 2017 at 13:59

    Couldn’t agree more. We see this collaboration as the foundation to achieve new levels of improvement.

    • 9. January 2017 at 9:13

      Thanks, Andy.
      Good to see that there is common awareness to closely align I4.0 activities and lean production.

  • 29. November 2016 at 11:45

    Dear Stefanie,

    I completely agree with your insightful article. I myself believe that standardized processes shall be the pre-requisite before applying Industry 4.0 techniques otherwise there is high probability of bringing chaos into the factory.

    However, to synchronize the technological wave of Industry 4.0 and Lean Management, I believe that before training ‘software experts’ responsible for Industry 4.0, there should be defined clear vision and as well as target set between the Lean transformation and Industry 4.0 change agent (responsible person). What are your thoughts about it? How do you think this would be possible? Or the Lean transformation agent and Industry 4.0 agent shall be same?

    Hibtulla Bharmal

    • 29. November 2016 at 17:01

      Hi Hibtulla,

      Thank you very much for your interesting comment. I completely agree with you that it´s essential to have a clear alignment of lean production and I4.0. That´s exactly the way how this is handled at Bosch: We are on the way to fully align everything that´s supposed to be implemented in the context of I4.0 with the BPS principles. Although we already see some topics collide as described in my Blog post.
      Training the software experts is supposed to have them basically understand the lean production principles – since most of us are not manufacturing experts.
      Our BPS “agents” have initiated to align with I4.0. So in an ideal world I4.0 “agents” have a deep BPS understanding and manufacturing expertise. But in real life it is hard to find such persons companywide for every plant, business division, etc. Therefore we have to make sure that those two topics, namely BPS and I4.0, are developed in close coordination and mutual understanding. The basis for this common understanding can only be a common vision and target set of “where to go”. So I totally agree on that.
      How is this handled in your company?

    • 8. December 2016 at 12:22

      Hi Stefanie,

      In our company, we are undergoing Lean transformation and I believe we are at a very good level compared to the manufacturing standards. Our processes are stable and have shown drastic improvements in cost, time and flexibility. Ofcourse there is high variance in Lean maturity level in different plants around the world and as a headquarter responsible person I am trying to reach all the sites. Regarding I4.0, we are in the process of developing a business model with an external help and also being an Automation and Electronics engineer and now an Lean expert, I myself am deep in this subject and I am working on small projects to show the benefits of connectivity and scale these projects in future to all the plants.

      Hibtulla Bharmal

    • 30. November 2016 at 7:06

      Hi Hibtulla,

      here’s one more hint from my side on top of Stefanies comment.
      We from Bosch.IO (formerly Bosch Software Innovations) also offer a coaching for customers who want to start with I4.0 initiatives but not necessarily know where to start.
      This offering starts from guided tours in our plants to see and learn about the power of I4.0, followed by a workshop to identify beneficial usecases for the customer. When the usecase (goal) is defined we are capable to let our customers benefit from the broad knowledge base regarding I4.0 in our Bosch plants and from our experts.
      Depending on the status quo of the individual customer we start with Lean Management approaches to stabalize the value chain and processes as base for attending our customers in integrating their I4.0 usecases.
      And as you say: the relevant stakeholders in the customer environment (like Lean Management and I4.0 “agent”) are involved and part of the process!
      What do you think about this approach?

      Kind regards,
      Denis Court

    • 8. December 2016 at 12:26

      Hi Denis,

      I completely agree with your approach. As a Lean transformation change agent, I consider learning from different industrial solutions and benchmarking with other companies is the best possible approach to become the ‘leading’ organization and ultimately focus on the needs of the customer.

      Thanks for the valuable insight.

      Hibtulla Bharmal

    • 27. February 2017 at 7:29

      Hello Stefanie,
      This topic really very new to me quit interesting in my view but total production as well as various functions involved in that process can relay on software is that right way?

    • 3. March 2017 at 23:53

      Hi Vamsi,
      This article doesn’t say that various functions solely rely on Software applications but it says that the combination of Industry 4.0 and Lean production directly couldn’t give the best results,moreover it was a kind of failure leading to reduced results.Hence,according to article,before applying automation using software, the software experts needs to be trained and given proper tools to get an idea of the actual production process.Therefore,I can say,the essence of the blog is mostly in contradiction to what you said in the question.

    • 6. March 2017 at 7:17

      Hello Vamsi,
      the essence of my article is supposed to be that
      1) you can´t displace lean production (know-how, principles, ..) with I4.0 (solutions)
      2) you still need profound lean production know-how when applying I4.0 solutions
      3) you need mature processes before optimizing or extending their effectiveness with I4.0
      4) people (vs software intelligence) always need to stay in the lead of processes (transparent production)
      All that needs to be self-evident for production experts.
      Hope that further clarifies.