• Last year accelerated the fact that to survive most effectively in a volatile marketplace supply chains and manufacturing firms need to transform and become more digital.
• Robert Bodor, vice president and general manager in the Americas, and Joe Goodhart, director of operational excellence at Protolabs, an e-commerce manufacturing firm, share some tips on how companies can maximize lean manufacturing practices with digitalization.
• Because of her work, Business Insider named Vicki Holt, CEO of Protolabs, to our annual list of the 10 leaders transforming manufacturing in North America.
• Visit Business Insider’s Transforming Business homepage for more stories.

How many of you, and your companies, are more digitally literate than you were 12 months ago due to the ongoing pandemic? I’d wager there are a lot of virtual heads nodding in agreement. As painstaking as that transformation can be at times, we typically emerge better prepared for future disruptions — large or small — that no doubt lie ahead.

In the spirit of fighting disruption with disruption, I want to look deeper at how companies can remove conventional barriers with digitalization, how to leverage lean principles to optimize the value of digitalization, how software-driven manufacturing has already done so, and how the digital thread can tie it all together. 

Disseminating the deluge of data into a strategic lean approach

Supply chain teams are accustomed to driving traditional lean practices and continuous improvement. But the last year has accelerated the fact that to survive most effectively in a volatile marketplace they need to transform, and become more digital.

While lean manufacturing concepts have been around for decades, the digitalization of lean is relatively new. What I’m hearing from leaders at other companies is not only, “we want to digitalize” but in some cases, “we must digitalize.”

So how exactly do you do that? Well, you start by gathering data, and typically you can find a lot of it! You can hire an outside company that can either gather it for you or you can learn and implement the data gathering tools yourself, which can be problematic when time and agility are paramount. 

But, gathering the data is not the true challenge. The bigger challenge is disseminating the endless waves of data and getting that data to the right decision makers so it can be converted into information for identifying and solving your most impactful problems. How can you apply the data to problem-solving processes that are intended to improve business results? That’s what becomes overwhelming. We see many companies in this mode right now—they’ve installed a system and are getting tons of data, but they don’t necessarily know what it’s telling them or what to do with it. That makes it hard to demonstrate ROI on these data tools as they’re working their way through this new digital world.

Similarly, your lean initiatives may not be tackling the right problems—the barriers that are most instrumental in preventing you from reaching your targets—and as a result the promise of lean is not coming to fruition. You may have finished a project where you eliminated some random waste, but you didn’t systemically move the needle to deliver on your business performance objectives. Without data-driven insights, you are simply creating random acts of Kaizen. But no impact. Lean needs data, and data needs lean.

You need to generate data in a hypothesis-driven way, and to do that, you need to extract the right data from an end-to-end system—gathered throughout the digital thread—to identify not only where the most effective places are to drive change but what needs to change and how it will impact the entire value stream.

Operational teams understand lean and continuous improvement initiatives, and technology services teams understand digital initiatives. You need something that bridges these teams, and for Protolabs, it’s our digital thread that ties what we’re doing in software to the business need—not only at the manufacturing plant level, but throughout the entire value stream, including the customer. Ultimately, the thread drives sustainable value-added results.

How we applied digital lean to manufacturing

We know the growing pains. We’ve been there. Digitalization can be a daunting challenge to tackle, but in today’s business climate, it’s a necessary one. As a technology-forward manufacturer, the digital thread is omnipresent throughout our manufacturing ecosystem. It starts when a product designer or engineer uploads a 3D CAD model and flows those part requirements to our automated design analysis, then on to toolpathing the part design for production, where we create a digital twin of the completed part. The next step communicates to a network of manufacturing machines, and continues through to quality control and shipping. There are many steps along the way, and the digitalized systems along that path needed to be integrated with one another. It’s a complex puzzle to solve, but the byproduct is a digital thread that allows you to tether data-driven performance insights to each step in the value stream in order to systemically accelerate targeted improvements and optimize the delivery of value.  

It is the backbone that allows us to measure all manner of things about customer behavior from the early stages onward, and we can also acquire knowledge along each digital step: How satisfied is the customer with the design analysis? How likely is this design to cause rework? How long is an order taking? How much material does that take? How much labor is needed? And as we consolidate this information, we can couple it to improving the customer experience and meeting business objectives.

With these connections along the digital thread in place you know what data to collect. And, you can avoid collecting, storing, and managing data that has no real value. In lean terms, this is waste.   

The result of an end-to-end digital thread coupled with lean? An infinite loop of continuous improvement that focuses on the customer. Digital lean never ends, it’s a perpetual process that allows for the evolution and growth of your company, your systems and processes, and the value you can provide your customers.

The Venn diagram that emerges here shows the shared benefits—the value proposition, if you will—of a digitally lean system: It arms those closest to the work with the right data at the right time. It drives efficiencies and accelerates the rate of improvement. It makes a traditional lean approach leaner! It truly enables a more responsive delivery of value to your customers, which is a driving principle of lean and what most companies want to achieve.

How does this apply to real-world manufacturing? We reduced standard injection molding lead time from 10 days to 7 days by increasing quick-turn capabilities for customers. We layered in additional secondary processes like color-matching for molded parts, post-production processes on 3D-printed parts, or enhanced quality measures across manufacturing — all derived from customer needs identified in the digital thread. By advancing these capabilities in-house, we reduced the frustrations of customers who typically had to work with various suppliers. Instead, we’ve created a single-source manufacturing resource, which is valued by supply chain managers, procurement teams, and engineers. These are real results from actual digital lean strategies. And, they reinforce the principle of delivering value to the customer.

Integrating digital streams into one thread

I’ve seen firsthand the challenges that come with digital integration—we’ve experienced it in the past and continue to navigate rapid digital adoption in parallel with many others inside and outside of manufacturing.

Keep in mind that as you work to both digitalize your system and continuously improve processes, it’s often much easier to insert a proven system into your own value stream, one that has already undergone this digital transformation. If digitalizing your supply chain is a critical to servicing your customers, then integrating a digitalized, plug-and-play manufacturing system may exponentially increase your company’s performance, and do so fast. The benefits can include improved digital cohesion between systems, increased speed to market, and ultimately a fortified supply chain with greater agility against demand volatility.

In the end, it’s about forming partnerships—with other companies, tech providers, suppliers. So, I want to close with a question: What systems do you want to put in place so you can truly become digitally lean and enable quicker, more responsive delivery of value to your customers?

About Rob Bodor

Robert Bodor is Vice President and General Manager, Americas, at Protolabs, a leading digital manufacturer of custom parts. Bodor has also held roles as Chief Technology Officer and Director of Business Development during his time at Protolabs. He’s also held leadership roles at Honeywell and McKinsey & Company, and has been on the executive team of two early-stage software companies in the Twin Cities. Bodor holds B.S., M.S. and Ph.D. degrees in Engineering and Computer Science.

About Joe Goodhart

Joe Goodhart is Director of Operational Excellence at Protolabs. With nearly 30 years of operations and lean experience, he has also held leadership roles within the industries of medical device, measurement instrumentation, and health care IT. He holds a B.S., and an MBA from the Carlson School of Management at the University of Minnesota.