Lean and Industry 4.0 mitigating common losses in Engineer-to-Order theory and practice: an exploratory study

Abstract

Companies employing an Engineer-to-Order (ETO) manufacturing strategy often develop, design and produce complex goods in single or small batches based on an individual customer order. The increased complexity caused by project business multiplies the engineering, cost, and change management efforts that are often required, resulting in lost productivity and more non-value-adding activities. To improve efficiency and reduce losses, ETO organizations strive to implement Lean practices and Industry 4.0 (I4.0) technologies, but the relevant literature in ETO industrial context is more exploratory and contains less empirical data. Building on the preliminary work categorizing the common losses in ETO organizations, the study examined how these can be reduced by Lean and I4.0 practices. Current literature was analyzed, and empirical data was collected using a survey questionnaire and semi-structured interviews with 16 companies from the construction, shipbuilding, and machinery and plant manufacturing industries. The scientific literature was compared with the empirical data to find out whether Lean methods and I4.0 technologies are known in research but not applied in practice and vice versa. As a result, there are several practices from both domains applied in practice to reduce losses, but the analyzed literature indicates few successful implementations. Future research should aim to provide more empirical data on the application of Lean and I4.0 practices to mitigate losses in companies with an ETO strategy and provide best practices and guidelines.