Virtual factory management: the cutting edge of Lean

A virtual factory is an integrated model that brings together cloud computing, advanced Lean data analytics, and real-time collaboration in order to solve problems quickly and make holistic improvements.

By Leigh Kellner, AME Contributor, LeanDNA December 18, 2017

Industry 4.0, Industrial Internet of Things (IIoT), smart manufacturing. There is a lot of change happening in our industry right now! But what is something on the absolute “cutting edge” of lean? Answer: Virtual factory management powered by AI-based Lean analytics.

Technology and new processes are revolutionizing factories, just as lean itself did over 30 years ago. But they’re not here to replace Lean – what’s new and next will make lean even better. Continuously improve continuous improvement, you know? And virtual factory management is set to make waves.

What is virtual factory management?

A virtual factory is an integrated model that brings together cloud computing, advanced Lean data analytics, and real-time collaboration in order to solve problems quickly and make holistic improvements. Virtual factory management, then, allows for views of the whole factory at once to make informed decisions. Apply Lean best practices for a recipe for improvement!

In the past, the virtual factory was only a framework for planning and testing. But with emerging technology that lets all the components of a factory communicate with each other, the virtual factory is now a reality. When every machine, value stream, and person is connected, the power of Lean in manufacturing increases significantly.

How a lean strategy and virtual factory management work together

Virtual factory management combines real-time information, Lean best practices, and on-demand computing. It offers a better picture of what is going on at any time, with any machine or person. That’s a given. But the real cutting-edge potential is the ability to visualize, analyze, and take action on the data.

Tools and processes are emerging that automatically interpret supply chain data and transform it into best-practice dashboards that can drive improvements. The time used to spend chasing down data is now instead spent on analysis and improvement. The team gets to spend more effort on designing and executing projects.

The real game-changer, though, comes from what those data analysis tools can do with data. Artificial Intelligence (AI) and intelligent algorithms can actually learn from what’s happening on the factory floor, and bring the biggest opportunities for improvement to the forefront.

Think about a quality control initiative, for example. “When AI identifies an opportunity for improvement, the team gets an immediate alert. You know exactly where to take action, and can start solving the problem. Instead of hunting for the problem, the information is hand-delivered, so you can take action. Smart virtual factory management means you find opportunities faster, execute projects with an informed perspective, and can track and attribute results,” said Richard Lebovitz, CEO of LeanDNA, and past AME Southwest Region president, a leader in supply chain and continuous improvement tools.

Then, there’s the fact that everything lives within one platform. In an age where everything is online, this might seem unremarkable. But just a few years ago, the same data could only have existed as an email attachment. The team was connected, but the data was not.


Now, cloud-based systems exist that can manage a company’s entire lean manufacturing operation. Project management, team collaboration, status updates and tracking, measurement, and savings attribution can happen online, in a system that anyone can access anywhere, anytime. Data from multiple sources, like different ERP systems or factories across different physical locations, can be brought together. Everything really is at a Lean team’s fingertips.

The Lean best practices that so many smart people developed over the last 30 years can now be implemented and tracked more effectively. With more information about more of the processes in a factory that can all be accessed in real time, the opportunity to find areas for efficiency improvements increases. Now, there is a factory that can actually communicate and highlight priorities!

This level of data availability and factory communication sounds like it’s far off in a distant future, but these capabilities are here today! Virtual factory management takes Lean manufacturing to the next level.

Leigh Kellner is a content contributor at AME. AME is a CFE Media content partner. This article originally appeared here on AME’s blog.

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