How lean practices can enhance Industry 4.0?

Industry 4.0 has already begun in 2016. Its objective is to automate the production of businesses in order to increse their efficiency. Currently, process optimization is mainly done through using lean practices which help for eliminating waste or unnecessary actions. Since the outcome of both approaches is achieving a more productive and efficient process, then what would happen if we combine them?

What is Industry 4.0?

The Fourth Industrial Revolution, or Industry 4.0, or Smart Industry can be outlined as the integration of Information and Communication Technologies (ICT) within the production (Matt et. al, 2020). Its initial purpose is to automate processes within businesses, while increasing productivity, quality and flexibility and decreasing costs. Further, the technologies from Industry 4.0 enable opportunities such as synchronizing workflows, achieving autonomous processes, customizing products, and connecting to partners.

According to the European Parliamentary Research Service (2015), a few technological developments, participating in the Industry 4.0 are:
Information and Communication Technologies (ICT) to digitize data and integrate systems at all business processes, both inside companies and across borders.
Cyber-physical Systems (CPS) using ICTs to monitor and control physical processes and systems. These include embedded sensors, intelligent robots, or additive manufacturing devices, such as 3D printers.
Network communications including wireless and internet technologies that link machines, systems, work products, and people, both within the manufacturing plant and with suppliers and distributors.
Simulation, modeling, and virtualization in the design of products and the establishment of manufacturing processes.
Big data analytics and exploitation, either immediately on the factory floor, or through cloud computing.
Digital assistance systems for human workers, including robots, augmented reality (AR), and intelligent aid systems.

In general, these technologies provide opportunities to connect hardware and software systems, while improving the decision-making process and the information transparency. In this way, the decisions can be taken by smart devices which require less human input (Westrom, 2021).

The 5 principles of lean

The method of lean working has arisen from manufacturing companies, however, now it has been used widely within the whole management world (Doanh, 2017). In the book “The machine that changed the world”, Womack (2007) has set out the 5 principles of lean. They are creating a customer-centric environment of continuous improvement. The 5 principles are:

  • Define value

    Firstly, the customer value has to be identified in order to understand what they are willing to pay for. Besides this, the product/service features have to correspond to the customer needs.

  • Map value stream

    Later on, each business activity that creates value should be recognized. The ones which don’t create value are defined as “waste”. This term splits in 2 categories, depending on their necessity. The first ones are described as non-value and necessary and they should be reduced as much as possible, while the second type, non-value and unnecessary, should be eliminated.

  • Create flow

    To ensure a smooth process, it should be verified that the flow doesn’t miss any activities. According to Doanh (2017), such strategies include “breaking down steps, reconfiguring the production steps, leveling out the workload, creating cross-functional departments, and training employees to be multi-skilled and adaptive”.

  • Establish pull

    The objective of pull-based systems is to ensure that the amount of inventory and work-in-process (WIP) is as little as possible. This allows the production and delivery to begin with the placing of an order rather than having inventory.

  • Pursue perfection

    The most important principle is to convert the lean method into a way of thinking in order to continuously improve its results. It should become a part of the organizational culture so that it can achieve greater success.

How to achieve Lean Manufacturing?

Lean manufacturing allows for organizations to minimize waste while they maximize their productivity. Combined with Industry 4.0, organizations become even more efficient in all stages of the lean manufacturing process. This is because Industry 4.0 saves time, energy and resources, largely when multiple smart technologies are being brought into play altogether. Currently, the most common ways to implement these advancements are through Cyber-Physical Systems (CPS) or Internet of Things (IoT).

  • Cyber-physical Systems (CPS)

  • CPS is the connection between the real and virtual world (Roblek et al., 2016). CPS networks allow for the real-time operational data to be accessed by the users. This data on its own allows for several lean practices to be improved. These can include, for instance, automatic orders processing and the controlling through e-kanbans the inventory level.

  • The supervision of the production can be done through smart devices that automatically record the Key Performance Indicators (KPIs) and are able to track any production problems by collecting relevant data and information about the equipment. To integrate a digitalized Kanban scheduling within the production, the company’s machines should be equipped with smart products which contain data about the production process and task dependency. Also, these devices are able to trigger notifications for events such as repair actions or failure moments. Hence, the production becomes order-oriented with the possibility of executing JIT tasks or changes.

  • Another way to implement CPS networks is through a computerized production solution which seeks to install CPS along the value chain (Müller et al., 2017). This enables the information sharing between shop floors and business departments to be digitalized. Thus, processes now become leaner, more responsive and optimized. Further, the production capacity is increased, while the number of errors is lower. Therefore, the end user takes advantage of a faster delivery and more precise order completion.

  • A third method to integrate technologies from Industry 4.0 is to combine a CPS system with Radio-Frequency Identification (RFID) tags. In this way, operational information such as inventory and location is able for access and processing through a Manufacturing Executive System (MES).

  • Internet of Things (IoT)

    Another way of introducing lean manufacturing within your business is to integrate Internet of Things (IoT) solutions. The IoT represents a global network of machines and devices that can interact with each other within a complete system (Lee & Lee, 2015). The implementation of such tools optimizes the logistic processes and systems by facilitating the storage, process and transmission of more sophisticated data (Gerhäuser et al., 2008).

  • According to Perreira et al. (2019), a combination between the 5 principles of lean and IoT enables better operational processes where the supply chain has access to real-time data. The information is utilized to optimize activities which results in growth in productivity and autonomy within the supply chain. Further, the model is able to predict changes, while taking independent decisions.

What unites Industry 4.0 and the 5 lean principles?

  • Focus on the value creation

    The aim of lean is to eliminate waste in the value chain as much as possible. This means a faster and smoother link from customer order to delivery. When the enterprise, IT, machines, operational systems and devices are altogether connected, this allows for a complete view of the value chain. In this way, managers can easily detect weaknesses in the processes so they can prioritize them and improve them in the future (SAGE Automation, 2019).

  • Focus on the customer

    Customer needs can be better assessed with the help of advanced data analysis and even AI. For example, customer’s behavior can be analyzed when they’re using apps, or identifying how many customers look for a product’s origin by the label. In mass customization customers are able to customize their order to a large extent. This is enabled by integrating automated and semi-automated robots in the production line which can handle various customizations (SAGE Automation, 2019).

To conclude, the objective of Industry 4.0 is to improve the operational efficiency and productivity of companies and to increase the level of automatisation (Lu, 2017). Usually, this is done by speeding up the process from the development of the product to its delivery to the customer (Vuksanovic et al., 2016). The main touch point of Lean Manufacturing and Smart Industry is their common focus - maximizing the customer value. Currently, the key practice to achieve a synergy between both concepts is the implementation of a CPS system or IoT devices. Additionally, some researchers suggest combining them into one integrated system for an optimal result.


Doanh, D. (2017, August 5). The Five Principles of Lean. The Lean Way.

European Parliamentary Research Service. (2015, September). Industry 4.0 Digitalisation for productivity and growth. European Parliamentary Research Service

Gerhäuser, H., Hupp, J., Efstratiou, C., & Heppner, J. (2008). Constructing Ambient Intelligence (Vol. 32). Springer Publishing.

Lee, I., & Lee, K. (2015). The Internet of Things (IoT): Applications, investments, and challenges for enterprises. Business Horizons, 58(4), 431–440. Lee & Lee (2015)

Matt, D. T., Modrák, V., & Zsifkovits, H. (2020). Industry 4.0 for SMEs: Challenges, Opportunities and Requirements (1st ed. 2020 ed.). Palgrave Macmillan.

Müller, R., Vette, M., Hörauf, L., Speicher, C., Burkhard, D. (2017) Lean information and communication tool to connect shop and top floor in small and medium-sized enterprises. Procedia Manufacturing, 11: 1043-1052

Pereira, A., Dinis-Carvalho, J., Alves, A., & Arezes, P. (2019). How Industry 4.0 can enhance Lean practices. FME Transactions, 47(4), 810–822. Pereira et al., 2019

Roblek, V., Meško, M., & Krapež, A. (2016). A Complex View of Industry 4.0. SAGE Open, 6(2), 215824401665398. Roblek et al., 2016

SAGE Automation. (2019, March 14). The new lean: how lean manufacturing meets industry 4.0. Sage Automation. The new lean: how lean manufacturing meets Industry 4.0

Vuksanović, D., Ugarak, J., & Korčok, D. (2016). Industry 4.0: the Future Concepts and New Visions of Factory of the Future Development. Proceedings of the International Scientific Conference - Sinteza 2016. Published. Viksanovic et al., 2016

Westrom, D. (2021, May 6). How Industry 4.0 Is Transforming Lean Manufacturing. MachineMetrics.

Womack, J. P. (2007). The Machine That Changed the World: The Story of Lean Production -- Toyota’s Secret Weapon in the Global Car Wars That Is Revolutionizing World Industry (1st ed.). Free Press.

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