Improvement of Value Stream Mapping and Internal Logistics through Digitalization: A study in the context of Industry 4.0

Abstract: Traditional value stream mapping (VSM) is used to identify non-value-added (NVA) activities in lean production systems. However, VSM lacks flexibility and responsiveness due to its static nature, which limits its usage in complex and flexible production environments. Furthermore, in a production system, the internal logistics and production value streams are interconnected to each other. Therefore, they face the challenges of same nature such as poor material handling, lack of flexibility and lack of responsiveness. These challenges are disseminated from poor integration of internal logistics and production value streams. The lack of flexibility in VSM is discussed in previous research works to some extent but its lack of responsiveness has not received much attention. Similarly, poor material handling and lack of flexibility of internal logistics system are discussed extensively in previous research works; however, the lack of responsiveness of internal logistics has received very little attention. Furthermore, poor integration of internal logistics and production value streams has not received any attention in the previous research works. To overcome aforementioned challenges, this thesis emphasizes on combining digital technologies (e.g., RFIDs, sensors, barcodes, simulation and intelligent interfaces) with VSM and internal logistics system. However, there is very limited research that addresses improvement potentials in VSM and internal logistics system through digitalization. Therefore, this thesis aims to fill this gap by investigating the improvement potentials of digitalization for both value stream mapping and the internal logistics. In this regard, firstly the core challenges in value stream mapping and internal logistics system are identified. As a second step, possible improvement opportunities are identified in these two areas to increase the productivity of the production system through the adoption of digitalization. A qualitative research approach is performed in data collection methods such as observations and interviews. Furthermore, an empirical study is performed to provide an overview of the current production value streams and internal logistics system at a case company. The study concludes that the combination of VSM with simulation and real time data collection is vital to increase the flexibility and responsiveness of VSM. The improved flexibility and responsiveness of VSM will make it efficient to identify non-value-added activities. It is also discussed and demonstrated that the integration of internal logistics and production value streams can be improved through implementation of digital technologies such as AGVs, RFIDs/barcodes, IoT, data analytics and intelligent algorithms in the context of Industry 4.0. The improved integration of internal logistics and production value streams can improve the productivity of the production system to a large extent.