What Would Continuous Improvement Look Like in The Industry 4.0 World - PWC Belgium

5/8/2019 What would Continuous Improvement look like in the Industry 4.0 world?
| PwC Belgium
| Belgium
What would Continuous Improvement

look like in the Industry 4.0 world?
With the advent of Industry 4.0, the question arises whether ‘old’ methodologies
are slowly becoming obsolete or offer a synergy, when applied together with
new technologies.
In this article, we explore the concept of Industry 4.0 in combination with the

Continuous Improvement methodology. When speaking about Continuous
Improvement, this article mainly refers to the Lean Six Sigma methodology,
which aims to guide the design, improvement and optimisation of processes and
products.
What is Lean Six Sigma?

The term ‘Lean Six Sigma’ is a concatenation of the terms ‘Lean’ and ‘Six
Sigma’:
Lean originated in the Toyota production system. Since the 1950s, it has
transcended its initial scope and spread worldwide as a method for
Acceptwaste,
improving any standard process through identifying and eliminating cookiesin
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5/8/2019 What would Continuous Improvement look like in the Industry 4.0 world? | PwC Belgium
Six Sigma was designed at Motorola in 1980s. General Electric made this
method central to its business in 1990s, so we know it largely thanks to Jack
Welch, the GE CEO. Today, it is the standard methodology for identifying
and eliminating the root causes of defects through reducing variation in
business processes and production.
Although the name of the combined method suggests the simple addition of the
individual methodologies, the resulting methodology is more than that. The
synergy enables companies to improve and standardise processes by
addressing the root cause of the problem by eliminating waste and reducing
variation. There are many Lean tools, such as standard work that can help
reduce variation, and there are many Six Sigma tools that can eliminate waste.
As a result, the synergies of the combined Lean & Six Sigma methods are
marvelous.
As we observe, over time, the term ‘Lean Six Sigma’ is gradually being replaced
by the term ‘Continuous Improvement’ as it is not only used to solve urgencies
but is also employed to implement incremental improvements to optimise
working processes.
Most of the projects executed as Continuous Improvement initiatives follow the

Define - Measure - Analyse - Improve - Control roadmap.
Define Measure Analyse Improve Control
Define
Define
Define project charter including problem
statement and goals
Collect customer data and translate to

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customer requirements
By entering this website, you accept the use of such cookies. For more
Map out the process components and

boundaries
Develop project management tools to track

performance
Define team roles and responsibilities
Analyse and mitigate project risks
Measure
Measure
Identify cause and effect relationships
between process inputs and outputs
Identify the type of data and measurement

scale
Understand Operational
Definitions of Inputs
Use graphical methods to depict

relationships and distributions
Analyse and interpret measurement system

capability
Calculate performance metrics of process
Determine the business case by completing

a cost benefit analysis

Analyse
Analyse
Identify Root Causes Accept cookies
Prioritise potential root causes
Validate root causes by interpreting

statistical significance using hypothesis
testing and other exploratory analysis
Identify quick wins
Confirm that the sample size and power are

appropriate
Improve
Improve
Plan, organise, and evaluate any
experiments if applicable
Select and apply tools for eliminating waste
Select the desired solution
Pilot the solution and confirm attainment of

goals
Plan full-scale implementation
Check risk management
Update any changes to performance metrics

or the process
Update the business case
Control
Control
Select appropriate tools for statistical
process control and interpret findings
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Develop a control plan to ensure ongoing
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Develop or update standard operating

procedures and training plans
Document project findings and lessons

learned
Identify replication opportunities
Finalise business case
What do we mean by
'Industry 4.0'?
On the other side of our discussion, we have the
reality of Industry 4.0 that we live in. This loose
concept groups a number of technologies that are
reaching a level of maturity enabling them to be
implemented and accepted not just in industry
(contrary to what is suggested by the name) but in
many processes in modern society.
As technology is evolving faster than ever before, it

offers new business opportunities. Think of new
consumer products like smartwatches and
autonomous cars. However, besides the consumer
market, these technologies also allow current
manufacturing and transactional processes to
implement improvements, impacting how they go
about their daily activities.
At PwC, we acknowledge the following emerging Accept cookies

Bytechnologies as the
entering this website, youkey elements
accept ofsuch
the use of Industry
cookies.4.0.
For more
1. Industrial Internet of Things 6. Virtual reality offers new means to

means equipping elements of the teach, show and share learnings and
manufacturing environment experiences.
(complementing manufacturing
equipment) with remote sensing 7. New user interfaces brings a new
technologies that allow more data and communication method to the
information to be collected. industry work floor. Through chatbots
or voice control, employees can
2. 3D printing offers manufacturers a control and operate devices and
quick and affordable method to machines etc.
produce prototypes and to showcase
new products much faster than with 8. Robotics offer us a way to perform
the classical prototyping methods. the same task again and again, with a
high degree of repetition, not by
3. Drones offer a bird’s eye view as employing a human but by using a
they enable oversight over large program.
areas, and they can be implemented
in dangerous or unreachable areas. 9. Artificial intelligence enables the
processing of big data and it offers
4. Blockchain can offer the solution the possibility to obtain new insights,
with full traceability, where trust and for instance in patterns that are
reliability are missing in our current currently out of reach. AI also helps
processes. identify connections between what we
measure and how we should respond
5. Augmented reality can support to the results.
workforce by showing real-time
measurement results, tasks etc. It can 10. Cloud computing allows data to
guide a worker when starting up be processed remotely (in a cloud)
unfamiliar processes or dealing with and gives us access to a lot of
new situations. computing power and memory
without the need to set Accept
up anycookies
infrastructure.
A new reality of Continuous Improvement

It is true that Industry 4.0 is inspired by the latest and most useful tools that
technology can offer today. However, we believe that there are great synergies
between Lean Six Sigma and Industry 4.0 and, ultimately, both fall under the
umbrella of Continuous Improvement.
In this section, we discuss the possible synergies arising from the amalgamation
of Industry 4.0 and Lean Six Sigma.
Synergies between Lean Six Sigma and Industry 4.0
How can Continuous Improvement benefit from Industry 4.0?
In the context of the Continuous Improvement methodology, Industry 4.0

provides us with new tools and solutions to support industries in their efforts to
implement this methodology, as visualised in visual above. The technologies
offer new oxygen for continuous improvement as they provide more ways to
collect and analyse data and implement actions. They expand the existing
toolbox, which creates new ways of looking at issues/opportunities.
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Thus, Industry 4.0 tools and techniques can be one of the final solutions at the
end of a Continuous Improvement initiative. For example, we could identify and
eliminate wasteful activities in a process and then, in order to further reduce the
variation and lead time of that process, implement Robotic Process Automation
(RPA). Thus, we would first have to analyse the process from a Lean Six Sigma
perspective and then implement RPA. If not, we would end up automating waste
in a process. That said, do not get us wrong, we do not suggest waiting for a
few years and implementing only basics now if current maturity is low.
Industry 4.0 concepts could be tested and even implemented in parallel with
underlying processes aimed at improvement, or in quick succession, but that
would require even more significant change management efforts than usual. The
most successful approach in this case would be based on series of sprints
where we combine process improvement and new technology in short bursts of
improvements.
Various Industry 4.0 tools and techniques can be used in the various DMAIC
phases, as is shown below.
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How can Industry 4.0 benefit from Continuous Improvement?
Many believe that the new technologies somehow replace the “old style”
business improvement. However, many Continuous Improvement skills will
become crucial in the future to make the right decision for the process, not from
the technology perspective alone.
Today, while there is a very strong focus on STEM (Science, Technology,

Engineering and Math) skills, we should not forget about the "softer" Continuous
Improvement skills, such as change management, project management and
process assessment.
For example, one of the projects that we have done for a client, a chemical
company, consisted in assessing the feasibility of applying 3d printing
technology in their processes.
We organised a brainstorming session with the client, used ideas generated by

the client’s team to prioritize the key areas of potential use of the technologies,
and selected the proofs of concept (POCs). All this required a structured
approach that could not be applied without using the problem-solving
framework derived from the Continuous Improvement methodology.
Moreover, further implementation of the POCs will not be possible without

applying the same rigid concept of DMAIC in order to ensure successful
implementation and correctly estimate the business potential – from both a
tangible and an intangible perspective.
How does it work in practice?

How Continuous Improvement can pave the way toward a mature company
while embracing Industry 4.0
Standards and routine Accept cookies

Basic principles
By entering of operations,
this website, such
you accept the useasofstandard procedures,
such cookies. For moreimplementation of 5S (Sort,
Set, Shine,
information, Standardise,
please Sustain)
read our cookie and using the elements of visual management
policy. are cookies
Decline
essential for any organisation.
Without this level in place, it is nearly impossible for any company to be successful in a
competitive market.
People
No continuous improvement is possible without involving and engaging the people within
the organisation. While the momentum comes from the leadership (top-down), it is every
employee in the company who should eventually implement and sustain the process. This is
why the change management approach is fundamental to the implementation of Continuous
Improvement.
It may be argued now that ‘People’ should be at the very foundation of the pyramid, but we
at PwC believe that, in fact, the implementation of basic standards should be done in
parallel and so go hand in hand with people development.
Problem solving
This layer is event-triggered. Any organisation is faced with some kind of issue at any given
time. The way in which an organisation reacts to these issues is critical. Normally, it is this
layer that constitutes the core of Continuous Improvement, as it is all about identifying and
solving the problems in a structured way.
Typically, the problem solving is done using one of the two frameworks: DMAIC (explained
above) or PDCA (Plan, Do, Check, Act). The logic of these frameworks, however, is the
same and is made up of the five components shown in the ‘Problem solving’ layer.
Maturity in each of these steps is critical to understand how the organisation is capable of
overcoming issues.
Innovation
As problems repeat themselves or have a significant negative impact on a company’s

performance, innovation (such as Industry 4.0) can offer a radical and thorough solution.
However, just having technologies available is not enough – the employees have to be ready
to use them.
Since successfully implemented technologies inevitably reshape all the lower layers of the
pyramid, from the very basic standards up, it is a never-ending journey, hence the wording
“Continuous Improvement”.
Performance
The simplified structure shown above leads to the sustainable results. In our view, it is not
possible to reach sustainable and ever-improving performance without implementing the
previous layers first.
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Conclusion
In this article, we explored the synergies between the ‘old’ Continuous

Improvement methodology and the new technologies of Industry 4.0. Then we
shared PwC’s view on how these two technologies can work in practice.
Our experience shows that the two support each other. First, Industry 4.0 brings
more tools, opportunities and solutions where the Continuous Improvement
methodology is applied. Next, one can use the Continuous Improvement
methodology when selecting and implementing these new technologies. What is
more, we see Continuous Improvement as the umbrella, covering Lean Six
Sigma and Industry 4.0.
How this can be put into practice depends highly on the maturity level of the
company. In short, Continuous Improvement can pave the way, create the
necessary buy-in, and prepare the company for the innovation brought by the
Industry 4.0 solutions.
At PwC, we leverage our broad Continuous Improvement experience and

knowledge combined with the newly acquired perspectives on Industry 4.0 to
bring even more value to our clients. Accept cookies
This article was written by: Alexander Silantyev, Akanksha Tyagi, Julie Dejonckheere, Lieselotte
Theuns
Contact us
Peter Jochen
Vermeire Vincke
Partner, PwC Director, PwC
Belgium Belgium
Tel: +32 9268 Tel: +32 9268
8064 8055
Email Email
Alexander
Silantyev
Manager, PwC
Belgium
Tel:
+3227107407
Email
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5/8/2019 What would Continuous Improvement look like in the Industry 4.0 world?

What would Continuous Improvement

In this article, we explore the concept of Industry 4.0 in combination with the

What is Lean Six Sigma?

Most of the projects executed as Continuous Improvement initiatives follow the

Define Measure Analyse Improve Control

Collect customer data and translate to

Map out the process components and

Develop project management tools to track

Define team roles and responsibilities

Analyse and mitigate project risks

Identify the type of data and measurement

Use graphical methods to depict

Analyse and interpret measurement system

Determine the business case by completing

Validate root causes by interpreting

Identify quick wins

Confirm that the sample size and power are

Select and apply tools for eliminating waste

Select the desired solution

Pilot the solution and confirm attainment of

Plan full-scale implementation

Check risk management

Update any changes to performance metrics

Update the business case

Develop or update standard operating

Document project findings and lessons

Identify replication opportunities

Finalise business case

As technology is evolving faster than ever before, it

At PwC, we acknowledge the following emerging Accept cookies

1. Industrial Internet of Things 6. Virtual reality offers new means to

A new reality of Continuous Improvement

Synergies between Lean Six Sigma and Industry 4.0

How can Continuous Improvement benefit from Industry 4.0?

In the context of the Continuous Improvement methodology, Industry 4.0

How can Industry 4.0 benefit from Continuous Improvement?

Today, while there is a very strong focus on STEM (Science, Technology,

We organised a brainstorming session with the client, used ideas generated by

Moreover, further implementation of the POCs will not be possible without

How does it work in practice?

Standards and routine Accept cookies

As problems repeat themselves or have a significant negative impact on a company’s

In this article, we explored the synergies between the ‘old’ Continuous

At PwC, we leverage our broad Continuous Improvement experience and

Careers Industries Media centre Offices Services

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