4 Steps to Sustainable Competitive Advantage with Digital Lean

Posted April 17, 2019 in Cutter Business Technology Journal

The ability to effectively and efficiently digitalize an organization’s value stream is, unquestionably, a source of future competitive advantage. Identifying and integrating the most appropriate digital technologies into the value stream requires a profound understanding of all related business processes, as well as a sound understanding of what the technologies offer and their relative maturity. As with Lean management, developing the required capability and establishing the required mindset throughout the organization remains a top management issue. The more employees and managers adopt this new digital Lean mindset, the sooner efforts to digitalize will succeed in delivering step changes in business performance.

To achieve success and overcome traditional barriers, companies need to ensure that Lean principles are well integrated into their digital transformation. To do so, and to fully exploit their digital potential, companies should perform the following four actions:

  1. Use Lean principles to radically simplify the value stream. A digital greenfield design can help identify the digital potential in the value stream.

  2. Select the right building blocks based on their specific value creation potential. This requires broad and profound knowledge of state-of-the-art technologies.

  3. Avoid digital shortcuts. Such workarounds typically fail or lead to disappointing or unsustainable results.

  4. Start developing a Lean digital capability that will form the basis for a long-term and sustainable competitive advantage. This implies an organizational cultural change and requires top management attention.

Completing these actions will allow companies to achieve radical shifts in performance levels by combining digital and Lean.

[For more from the authors on this topic, see “Digital Lean Management: Unlock Potential and Achieve Higher Performance Levels.”]

About The Author
Bernd Schreiber
Bernd Schreiber is an Arthur D. Little (ADL) partner, where he leads the Global Operations Management practice, the Global Industry 4.0 activities, and is a member of the Digital Transformation & Analytics think tank. Mr. Schreiber’s main areas of expertise are strategy definition, operating model and organizational design, operational excellence, supply chain management, performance improvement, and transformation programs in a wide variety… Read More
Engin Beken
Dr. Engin Beken is a Senior Consultant with Cutter Consortium and a Principal at Arthur D. Little (ADL). He has more than six years’ experience in management consulting and the energy industry.​ Mr. Beken’s main areas of expertise are operations management and performance improvement in energy- and production-oriented companies. He has a proven track record in organizational transformation, digitalization of value chains, process management, and… Read More