Lean transport and industry 4.0, competitors or synergy

My intention in sharing this material with you, my experience and demystifying the Lean or Industry 4.0 concept applied to a fractional cargo transport company. After all, they are competitors, complement each other, is there synergy?

Lean Six Sigma applied to freight transport and transport logistics can bring great benefits to the operation. Even more so when methodology is combined with systems and technology.

If the fourth industrial revolution is full of automation and artificial intelligence of all forms, the third revolution had the use of scientific and statistical methods for its management in general. There are countless ideologies, such as hundreds of methods and thousands of tools that have exploded both in the academic field and in the empirical field, that is, in the day[1]to-day of companies.

When we think about these methodologies, two jump to the eye and even gained a mega-known merger: Lean (appeared at Toyota in a devastated Japan after World War II) in the form of the famous Lean Production and Six Sigma, which is the model of high Motorola's level of statistical process control and continuous improvement, which had an operational and commercial boom in the 1990s and 2000s.

Maybe you know the famous courses that several institutions apply this methodology: the “Belts”! White Belt, Yellow Belt, Green Belt, Black Belt… Which, as in martial arts (white belt to black belt), categorize the degree and level at which the student is in Lean Six Sigma knowledge.

These courses became famous in the academic field, but mainly in the extensive field: there are several websites and platforms that have these courses in various ways, including applied to specific sectors.

On the one hand, Lean brought a lean systemic view, in a more qualitative way of the process (although it uses statistics and quantitative methods) applied in numerous tools that are considered its pillar, such as: Kanban (demand organization and signaling system) , Just-In-Time (nod of production and replacement only to what is necessary to meet demand), Kaizen (methodical system of continuous improvement), 5S (complex method of physical organization of the process) and among other countless tools. Lean is established in a series of implications and tools made for a long time and this is important: it took Toyota decades to reap these results financially. But when it came (especially in the 1990s), it came with incredible growth, making it one of the top automakers in the world.2

On the other hand, we have Six Sigma, which brought total control of process statistics, as well as DMAIC, which is an organized method of 5 steps for a continuous improvement project that is established with: Define (define the problem situation), Measure (measure the operation data of the current problem), Analyze (analyze the data measured qualitatively and quantitatively), Improve (create improvement actions based on the analyzes and apply them) and Control (control the process with kpi's). In this field, many statistical analysis tools such as cause-effect charts, Pareto diagrams, histograms, box

plots and so on… All of this to reach Six Sigma, which is the sixth level in terms of operation and error. , which is equivalent to 3 errors per 1 million processes (a level that very few companies reach). And few companies can replicate this at such a high level, as it requires deep knowledge of the Six Sigma process, as well as insistence on the application of continuous improvement. Nowadays, logistics has been presented as one of the most important areas for business success. Proof of this is the impact that freight transport has on the shopping experience of consumers, who expect to receive their products quickly and safely.

In this sense, Lean Manufacturing is revolutionizing the work of carriers, allowing companies to achieve increasingly better results with their customers

When it comes to transport management, Lean Manufacturing guides the implementation of logistical operations based on an ideal demand, this means that deliveries can be made on time and with the least possible expenses, since only viable actions in the present tense are carried out, that is, nothing more than necessary is transported.

In this way, the Lean methodology can help companies solve problems related to one of the main logistical bottlenecks, which is cargo transportation.

Because it is a set of practices based on a single philosophy — which provides for the continuous improvement of processes —, the biggest challenges of Lean Manufacturing are related to adapting the organizational culture.

Carriers need to break some paradigms and make the necessary changes so that all operations and tools are in tune with the Lean methodology.

In addition, the level of excellence of the processes and the reduction of costs proposed by Lean Manufacturing require that transport companies invest in monitoring results and in the constant evaluation of the workflow.

To get around these challenges, carriers need to invest in good practices, which can increase the quality of the consumers' shopping experience. I believe that to get around these difficulties, the first step to overcome the challenges imposed by Lean Manufacturing is to ensure that the master the bases of the lean methodology of process management.

Therefore, it is necessary to invest in training the team of managers and employees, exploring individual and collective skills and encouraging the team's autonomy in solving problems.

Then, managers must develop action plans, without giving up the continuous analysis of results, implementing the operations that will result in the simplest, safest and most economical way of carrying out all processes.

At that moment, investment in technology and workflow automation can offer many advantages to companies, in my experience I implemented sorters, mats and facilitated the achievement of the proposed strategic objectives.

However, it is necessary to keep the focus on consumer satisfaction and on improving the shopping experience, promoting the evolution of the distribution and delivery chain.

With technological advances, routes can be traveled more easily, which reduces costs and also reduces the time spent on displacements. There has been a great development in the transport industry in the last decade, due to globalization combined with the evolution in communication systems.

The relationship between transport systems and globalization is explained by modernization in various segments of society, originating from the transformation of techniques related, mainly, to industries.

I am often asked what the future of Lean is, by employees, friends and colleagues, where we have a great revolution happening again known as industry 4.0 that is gaining strength and advancing by leaps and bounds around the world, the question is where lean and industry 4.0 will converge, and create a synergy. As transporters, who are the last link in the supply chain, we can accompany industries.

In increasingly competitive markets, many organizations already integrate the preferences and specific needs of each customer into the product. The customization of products emerges as a trend in the manufacturing and services process. This deserves the attention of businessmen, since intelligent industries will be able to assess and meet the personalization desired by each consumer.

Another issue that will be shaken by the Fourth Industrial Revolution is the reliability of production, research and development in the fields of security in Information Technology and the interaction between machines. Technology will constantly develop to enable organizations to adapt to this new industry model, which is increasingly closer to the reality of organizations and people.

Taking this opportunity to share and try to contribute with my vision that "Lean" is a Culture, a model of thought that changes the behavior of employees and organizations, in the search for waste reduction and continuous improvement. I understand that we cannot survive and grow in an increasingly competitive and intelligent market if you do not use techniques and tools that allow continuous improvement in your processes.

Industry 4.0 is not related, as many say, to the pure and simple automation of processes, but to the intelligent way of working throughout the production and service chain, intelligently taking advantage of all available resources.

"Lean" professionals, engaged in the continuous identification of process innovation, with the application of the most appropriate "lean" tool, such as SMED, POKE YOKE, PULL SYSTEM, VALUE STREAN MAPPING, 5S, KANRI BAN, among others, have as their greatest challenges understanding which one should be applied when and where, if they can be abstracted in the segment or market where it operates, be it an industry, a hospital or a carrier company.

The carriers of the future must homogeneously combine all digital technology with an assertive concept of intelligent work, processes and tasks that do not admit obvious and untreated losses in the work environments. There is no room for professionals who do not have lean thinking to work with this new technology.

With the application of the lean culture and concepts derived from the Toyota Production System (TPS) and the technologies and digital applications provided by the 4th industrial revolution, they will, together, make it possible for us to approach the ideal of the truly “lean” transport company, focused on the customer value and eliminating waste.

Below are some technologies, applications or concepts that can create a great synergy with the concepts in our segment of carriers LTL[1]

Integration of systems between customer and supplier for communication about product design, with immediate online feedback.

Use of current data processing capabilities (Big Data Analytics) to capture and process the Voice of the Customer

In defining and implementing a value chain without waste in operational and office processes

Use of 3D Simulation for the design and validation of processes, before their physical implementation.

Digital documentation of processes (methods, materials), with real-time visualization, and interactive use, at workstations, elimination of paper prints.

Activities today can take place in a decentralized system, where they begin to work together, making wireless communication, both directly and via the “cloud” on the Internet — the Internet of Things (Internet of Things or IoT). This effort is so that the processes that are carried out today based on human knowledge become more autonomous and intelligent.

Direct communication systems with the equipment, allowing data processing in real time, and with dynamic learning, use in transfer and delivery vehicles, and internal handling equipment of the terminals.

"Carriers need to break some paradigms and make the necessary changes so that all operations and tools are in tune with the Lean methodology" 

Use of operating anomaly detection systems, with dynamic trouble shooting capabilities. (It is a diagram indicating the different possible problems that a product, process or operating system can present)

Use of detection and recording systems for stoppages, micro-stops, loss of performance, etc., for real-time calculation of performance indicators (OEE...)

In the automotive sector, for example, with the emergence of autonomous trucks and connected vehicles, the industry will be very different in five to ten years, electricity technology will be more accessible and more modern, allowing vehicles to travel long distances without recharging.

Use of 3D simulation simulating an electronic spaghetti diagram to define the best sequences/routes for internal movement of processes and consequently the best layout of the terminals.

Sequence management and batch size according to desired delivery dates, load, process performance calculated in hours.

Real-time definition and management of the delivery route in synergy with geolocation tools to be followed by the product (management of queues).

Use of electronic signals (E-Kanban) to order internal handling processes, to replace consumed materials or to prepare materials that will be consumed (within the company or with external customers in collection processes).

Provision of interactive information, in real time, at workstations, applying the concept of visual, virtual, with goals, ANDON and productivity management of all employees by process within the terminal.

Electronic and online operational management, for everyone involved with the processes

Use of drones to deliver light cargo, courier or fast food, today we have some companies in the world already testing the model, one for example and the Japanese RAKUTEN, as well as autonomous vehicles we can see this technology better developed and adapted to the need delivery to end customers.

Based on all the benefits shown above, I think that the intensive use of advanced digital technologies alone will not be enough to guarantee the efficiency of the logistics terminal units, and that Lean will not lose its importance in the future, rather contrary. On the one hand, the Lean concepts of customer focus, added value, waste elimination, quick response, among others, will continue to be more current than ever. On the other hand, the digital technologies and applications of the 4th industrial revolution will certainly facilitate the application of Lean principles and concepts.

In order for transporters to accompany the Smart Factories, it will require intelligent, prepared professionals, extraordinary leaders, servants, strategic ones who transform ordinary people into high-performance professionals.

The world has changed and we need to keep up with this change, however, the moment requires commitment to knowledge, belief that it is possible to do better, mastery of concepts and tools for continuous improvement and an open mind to the new.

Using operational simulations, through Artificial Intelligence and algorithms, simulation analysis helps to overcome limitations of the Lean deterministic method, making it more sustainable. On the other hand, the knowledge acquired with the use of Lean, such as mapping flows and causes and effects, are quite valuable in a simulation. Combined, the two methodologies can offer consistent results, which strengthen the technological advance.

Based on the trends contained in the book Exponencial Organizations, by Singularity University, it is important to mention that, in this evolutionary process, each company must have its own “Industry 4.0” strategy, defined according to its business, market, maturity and ability to integration. The technologies and solutions to be used must be strictly necessary, otherwise they could lead to an unnecessary increase in the complexity of the processes. And we must always bear in mind that adding a layer of technology (because it's in fashion…) to inefficient processes will not make them more efficient, but will certainly increase the cost of the operation

We can say that although processes evolve, people's needs will remain the same: to receive goods quickly, correctly and in perfect condition, the way they left the factory. This means that the logistics structure will always have to be strongly linked with the industry, our challenge is to accompany the shippers who for years have already applied state-of-the[1]art technologies and Lean concepts in manufacturing and logistics proces

I conclude by saying that Lean and Industry 4.0 concepts are congruent, forming a good marriage, and what a beautiful marriage.