Operational excellence and digital strategy. Lean manufacturing and Industry 4.0. Call it Lean 4.0. That is the marriage that will unlock value for enterprises.
Somewhere in your organisation there is an operator who raised a problem six months ago and never heard back. Not because nobody cared. Because the chain of people that had to solve it broke somewhere along the way. This article is about why that happens, and what a production line can teach us about fixing it.
Start on the production line
Picture a simple assembly line that builds bicycles. Frames come in at one end. Station one welds. Station two paints. Station three fits the wheels. Station four does final assembly. Station five packs and ships. Every station adds something the customer is willing to pay for. Everything else is waste.
Now imagine the packing station breaks down for two hours. The welding, painting and assembly stations keep running, because that is what they are measured on. Finished bicycles start piling up in front of packing. Then they get moved to the side to make room. Then a few get scratched while they wait. By the time packing is back up, you have a wall of inventory, a batch of bikes that need a touch-up, and a few that go to scrap. One breakdown at the end of the line turned two hours of upstream work into waste.
Now imagine the paint booth sprays the wrong colour for a batch. Everything downstream has to be undone: wheels off, back to paint, wheels on again. That is rework. Or the wheel station waits twenty minutes for a pallet of rims because the forklift driver is somewhere else. That is waiting.
Anyone who has run a line knows these wastes by heart: overproduction, inventory, waiting, transport, motion, over-processing, defects. Muda. The whole discipline of lean manufacturing exists to make flow visible and to eliminate the waste that breaks it.
We have spent decades getting good at this on the shop floor. We have not applied the same discipline to the teams that deliver our digital transformation. And that is where value gets lost.
The digital value stream is a production line too
Every improvement starts with a request. Leaving the bicycles aside for a moment: in a real factory, the end user of a digital solution is most of the time the operator or the shop floor team. Or at least it should be. They have a problem: a quality deviation they cannot see coming, a changeover that takes too long, waste they cannot explain.
That request travels through a surprising number of hands before value comes back to the person who asked for it. The operator shares the need with the process engineer. The process engineer translates it for a functional analyst. The analyst finds that data is missing and turns to the OT team to add a sensor or unlock a PLC signal. The IT team builds or configures the application. The data team models, stores and exposes the data. Often an external contractor or vendor is needed for part of the work. And finally it returns to the functional analyst for testing, training and change management, before it lands back on the shop floor.
Instead of a production line, you have a chain of steps that all have to happen, and a chain of people who each have to do something. And the same wastes appear, just harder to see because they hide in tickets and mailboxes instead of on a pallet.
Inventory is the backlog of requests waiting for the one OT engineer who can add the sensor. Rework is the solution built on a misunderstood requirement, discovered at go-live. Waiting is the three weeks between the analyst finishing the spec and IT picking it up. Over-processing is the beautiful dashboard nobody on the line asked for. Defects are bad data flowing into good reports.
We would never accept this on the bicycle line. We would map the value stream, balance the line, put the right people at the right stations and make flow visible. Digital delivery deserves exactly the same treatment.
It is not a straight line
The picture so far looks like a conveyor: request in on the left, solution out on the right. Reality is messier. The analyst tests a first version and sends it back to IT. The operator sees the first screen and realises the real problem was a different one. The OT engineer discovers the sensor gives noisy data and the data team has to remodel. Every real project runs through iterations and internal loops before anything lands.
A production line has those loops too, and lean has names for them: the rework loop, the inspection station, the andon cord that stops the line until the defect is understood. So the digital value stream is not a single pass but a set of loops inside a forward flow. It still starts at the requester and it still ends at the requester, but in between the work goes back and forth.
That does not weaken the principle. It strengthens it. Every loop is another handover, another point where the chain can break, and another reason why the people who have to close that loop must be part of the team and available when it comes around. A loop between the analyst and IT that closes the same afternoon costs almost nothing. The same loop that waits three weeks for a ticket to be picked up is inventory, and every loop like it adds weeks to the lead time from problem to solution. The value stream team does not remove the iterations. It makes them fast.
Why this is so hard
The principle is simple. The practice is not, and there are always good reasons why it does not work.
People have different priorities. They sit in different reporting lines with different backlogs and different managers. They get called away by the heat of the day, because a line is down and that will always beat a project. So people are unavailable when the value stream needs them.
The root of it is rarely one bad actor. It is misalignment in reporting lines, and therefore in priorities. A project works when someone is on top of it and the team has every skill needed to take every step. When one link is missing, because that person is not available, not on board, or busy with other work, the value is locked up in a backlog. For the operator waiting at the end, it does not matter where it is stuck. If nothing comes back, it is just another request that went nowhere. And it is almost never a single blockage, but several piles of inventory building up at different stations along the way.
People also make mistakes. In a transformation we are often still learning how to do certain things, and the technology itself breaks. Work piles up in the middle of the chain while the team fixes the basics, and the people at the back of the value stream, the ones who have to test, train and roll out, cannot even start. The last domino never gets the chance to fall.
Looking back at the projects in my career that really worked, every single one had a value stream that was fully functional from request to result. And every time one stalled, the value got stuck somewhere along that value stream. Not in the technology. In the chain.
The value stream team
The answer is not another reorganisation chart. It is a principle: when you look at a business problem, identify every single person who has to take a step to solve it, and make them one team with one goal. The person requesting the improvement and every single person who has to do something in the process is focused, available, aligned and part of the team. The team owns the full path from business problem to business solution, and it owns the technology it delivers.
That includes the requester on the shop floor, the process engineer, the functional analyst, OT, IT, data and where needed the external partner. Not as a temporary project group that dissolves at go-live, but as a standing team organised around a value driver: food waste, OEE, quality, energy. Different value drivers need different teams. The people change, the end-to-end essence does not.
People call this different things. Some call it a product team. Some call it a pod, working in an agile way or according to Scrum. I call it a value stream team, because that name says what it is: a team built around the flow of value, inspired directly by lean manufacturing. They are all faces of the same concept.
Every domino must fall
The underlying rule is simple and unforgiving: to unlock value, every single domino in the chain must fall. Miss one and the chain breaks. Flow stops, the request stalls, and the operator who raised the problem in the first place stops raising problems. That is the moment value delivery stops, and it rarely shows up in any technology KPI.
It is also the moment the project sponsors and the board room start asking where the value went. The honest answer is uncomfortable: everyone is working very hard and doing a lot of valuable work, but as long as the value does not land on the shop floor, it is all still work in progress. Just like the bicycles piling up in front of the broken packing station.
When flow is reached, the picture flips. Value moves faster from problem to solution, and the same people, with the same technology, suddenly deliver. Getting there is the big challenge most companies face. It is very hard to reach, but when it lands, it sticks. It is like adopting lean manufacturing in the first place: it takes a long time to embed in the culture, but with enough time and a relentless focus on the goal, the results finally start appearing at the end of the value chain. And that is when flow becomes addictive.
The six batteries of change
There is a second lens worth putting next to this one. In the Six Batteries of Change model from Peter De Prins, Geert Letens and Kurt Verweire, an organisation’s capacity to change is charged in six places, on two dimensions: rational and emotional, across the top, the middle and the shop floor.
At the top you need an ambitious, aligned team that trusts each other, and a clear strategic direction. In the middle you need a powerful management infrastructure that turns strategy into processes and priorities, and a healthy culture where people believe in what they are doing. At the bottom you need concrete action planning and implementation, and a strong connection with the people on the floor.
A value stream team has the best chance of emerging when all six batteries are charged. My main takeaway from Geert’s course was this: organisations that have all six batteries full have a disproportionately high chance of succeeding. The odds are not in our favour: roughly two thirds of transformations fall short of their goals, and the ones that do typically have two batteries running empty. That is not bad luck. That is a diagnosis.
Map it onto the value stream team and it becomes concrete. It needs the strategic direction to know which value driver it serves. It needs the management infrastructure to protect its people from the heat of the day. It needs the culture and the connection to make the operator a real member of the team rather than a ticket number. If any battery is empty, the chain breaks in that exact spot.
From diagnosis to action
The batteries tell you where the chain will break. They do not fix it. Two moves do most of the work.
The first is at the top: a leadership team that is explicit about the value it wants to unlock and where digital advancement sits in the priorities. That part is relatively easy. The hard part comes in execution, where it collides every day with the burning issues on the floor, which will and should take precedence. So the second move is to deliberately free up a team that holds every skill in the value stream and let it focus on one problem. Only then do you get flow. I have seen both scenarios many times, and the difference in results is staggering, yet obvious in hindsight.
When a project starts to struggle, it almost always comes down to a broken link in the chain. Someone who needed to be at the table was absent. Maybe their expertise was not considered a priority, maybe another issue pulled them away, or maybe nobody knew their input was needed. It takes many forms. But take any project that struggled, draw the value stream map for that specific problem and look at the handovers. You will see where the inventory piled up, where rework was created, and where the customer’s request got distorted on its way through the chain. It is never exactly the same, and it is never just one point, but it usually rhymes.
It is easy to say a project failed. But nobody starts a project expecting it to fail. Everyone involved starts with good intentions and is convinced that this time will be different. In reality, projects rarely fail outright. Most of the time there is simply a lot of work in progress piled up inside the value stream. Is it stuck at getting data in, or at the user experience? In application performance? Is the data there, but hard for users to work with? Or does the process not match the technology, so that the process, the technology or both need to adapt? Look at where the inventory sits. Declaring a project failed when the value is blocked at one or two steps pulls the plug on all that work in progress with it, and that can destroy more value than fixing the broken links would. Fixing it starts at the break in the chain. Nobody scraps a production line because one station stopped. You repair the station, and the flow comes back.
That takes a certain mindset. Some business cultures, the American one in particular, are known for being forgiving of setbacks and treating them as learning: fail forward, ask what needs to happen next, and move on. Any organisation can build that habit, and where it takes hold, it becomes a real strength.
The good news is that a struggling project is often the best burning platform to fix the value stream. The map is simply a tool to help. The last domino will not fall if even one domino is missing, and making the chain visible points straight at the gap, so you can get the full value stream in place and start making waves.
Keep your expectations realistic, though. Once the value stream team is in place, the backlog it inherits still has to be worked through, so do not expect all the results in a week. But as soon as the first result lands, do not break up the team. Keep it flowing. Keep the dominoes falling.
Lean 4.0
Lean manufacturing and Industry 4.0 are usually run as two separate worlds, with two budgets, two teams and two vocabularies. Some companies are starting to bring digital and operational excellence together under one umbrella. Whether or not they sit in the same box on the organisation chart, they need to be closely in sync, because they are solving the same problem with the same principles.
This is also why the conversation cannot stop at IT/OT convergence. Yes, it is an absolute necessity. But IT and OT are only two blocks in the value stream. What we really need is value stream teams converging, from business problem all the way to solution delivered.
Operational excellence and digital strategy. Lean manufacturing and Industry 4.0. Call it Lean 4.0. The value stream team is what that marriage looks like on the ground: empowered people, supported by standardised processes and enabling technology, organised around the flow of value.
Questions worth asking
For your top three business problems, can you name every person who has to act before the problem is solved? Are they on one team?
Take the last project that struggled. If you drew its value stream map, which handover would you find the inventory in front of?
Where does inventory pile up in your digital value stream? Which station is the bottleneck, and who protects it from the heat of the day?
Who owns testing, training and change management, and are they in the loop from the start or only at the end?
When a solution comes back for a second iteration, how long does that loop take to close? A day, or a month?
Does the operator who raised the request ever hear back?
Product team, pod, value stream team: whichever name you use, the question is the same. Where does your chain break most often? Tell me where it breaks and I will tell you what I have seen work.