How IIoT Benefits From The Lean Startup Mindset

Digitalization is an important field of the push towards Industry 4.0, also known as Industrial Internet of Things (IIoT).

In manufacturing, this area was mainly addressed by various MES solutions in the past.

However things have changed and big monolithic systems are out of fashion. With the emergence of (I)IoT platforms and the microservice software architecture style, agile approaches to the digitalization of manufacturing are the way forward.

Of course, this is somewhat provocative, because MES manufacturers have also recognized the trend and are making their software offerings more flexible.

Ultimately, it also boils down to the question of whether a company prefers to make or buy its software products. And again, this is not a black and white decision, but a decision that has to be made in each individual case.

This article focuses on the „Make Case“ and shows how the Lean Startup Mindset in combination with modern software development will lead to superior results in digitizing industries.

The Lean Startup Mindset

Eric Ries first published The Lean Startup in 2011, and it is not too much to say that it revolutionized the way products are built.

At the core of the idea stands the Minimum Viable Product (MVP). As the name suggests it is the earliest possible product to present to your customers, hopefully early adopters

The goal is to learn as quick as possible about your business hypothesis, especially in an environment of extreme uncertainty like startups often face.

The approach is inspired by Toyota‘s famous Lean Production, which cuts waste from manufacturing processes. Just as Lean in production, the Lean Startup aims to cut waste from the process of setting up a new business.

It is doing so by proposing the so called Build-Measure-Learn Feedback Loop.

Build-Measure-Learn Feedback Loop
Build-Measure-Learn Feedback Loop, Own Illustration

Finally, the goal is to iterate through this cycle as fast as possible. Growing to a learning organization on the basis of validated learnings.

Lean Is Coming Home

Maybe you have already asked yourself what startups and product developments should have to do with digitizing your factories.

Well, it is about the mindset. Eric Ries states in his book, that the methods can be applied to big companies and new projects as well.

So, let‘s transfer the idea of the Lean Startup back to where it all started: The Manufacturing domain. I‘ll try to give an example.

A lot of companies I know have implemented highly skilled central engineering teams. These can be lean task forces, six sigma, standardization or digitalization teams.

They often consist of production engineers, sometimes also enriched with software and hardware engineering.

Most of the time these teams work with classical project management. Furthermore, they do it in a strict environment, which is often not very change-affine. Never touch a running system is the credo.

Unfortunately I have rarely seen these teams perform well and there are mainly two reasons. 

First, these teams, despite consisting of the most skilled people, often don‘t address the real need of the production sites and the people within. The nasty thing about this is, that the manufacturers mostly can‘t tell their need themselves either. It is like the old joke by Henry Ford who said, that if he‘d asked his customers what they wanted, they would have said faster horses.

Second, due to the classic project management approach it takes much too long for the central teams to find this out. Wasting time, money and ultimately failing the project and thereby losing acceptance within the company. This is a doom loop.

How IIoT Benefits From The Lean Startup Mindset

I‘m convinced that the Lean Startup ideas can be applied to bring the digitalization in factories to the next level and reap the real benefits of the digital transformation.

As long as your companies hires excellent employees, they will produce excellent ideas. However, not all ideas will turn into a successful changes like a new digital tool for your operators. In fact only a few will do so.

The goal of the Build-Measure-Learn Feedback Loop is to learn as quickly as possible which ideas, hypothesis and assumptions are working and which not.

Consequently, the engineering teams should use this loop.

Leaving the ivory tower and leveraging Minimum Viable Products to collect the right data (this is not easy) and drawing the right conclusions (not easy as well). 

It is most important to get the metrics for steering right. You really should be able to say if your tool is improving quality on a certain product or is reducing cost.

In order to go out to a production site with an MVP, your teams needs allies on site. These can be operators, production managers or team leads with an early adopter mindset.

This is the starting point.

In combination with software based on microservices you will be able to ship multiple times per day. Therefore, really diving into the Build-Measure-Learn Feedback Loop.

This is how I envision a modern approach towards the digitalization of manufacturing.

Are you already working this way? I‘m happy to learn about your thoughts, please share them in the comments section or on Twitter.

Header Image Source: Pixabay, Pixabay License

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