Leaning Out Manufacturing Processes with ERP
The realities of competition in today’s global marketplace have made Lean manufacturing a megatrend. This shouldn’t be surprising. Lean delivers what companies need to survive and thrive: shorter lead times, better quality, lower costs, higher productivity, and improved levels of customer service and satisfaction.
It also shouldn’t be surprising that what was often seen as a conflict between Lean and ERP is increasingly understood as a synergistic alliance: the bottom-up methods of Lean and top-down perspective of ERP together can form a powerful, holistic approach to making organizations and their processes more efficient and effective.
A white paper by industry analyst, Dave Turbide, details five ways ERP can help manufacturers implement leaner processes:
- Reduce waste. As the “central nervous systems” of manufacturing organizations, ERP solutions carry the definitions, data, and records of enterprise activity. They provide the measurement systems for knowing where opportunities for improvement lie, and for determining the progress of efforts to reduce and eliminate waste.
- Facilitate continuous improvement. ERP systems contain the definition and documentation of processes and procedures—the “as is” state before any changes. As improvements happen and changes are made in the system’s records, these new definitions enforce and perpetuate the improvements.
- Identify sales and customer service opportunities. Lean initiatives strive not only to remove waste from customer-facing processes, but also to improve customer service. When waste is eliminated from these processes, the things that imperil customer satisfaction (e.g., delays, hassles, mistakes, and costs) are history, making it easier for customers to do business with the manufacturer.
- Increase orderless manufacturing and Kanban. To meet the challenges of increasingly turbulent work environments (due in part to more volatile markets), ERP systems can support flow/Kanban production by issuing signals to match demand and optimize resource utilization while meeting schedules. This expands the benefits of flow/Kanban across the manufacturing enterprise.
- Extend through collaboration. Collaboration tools built into or integrated with enterprise systems help extend Lean principles beyond the traditional “four walls,” supporting both the demand and supply sides of the business. Initially, it may seem that ERP may not fit the ten technical elements of Lean, but in fact it can support and extend them.
“Good enterprise system support is an essential component of virtually any Lean initiative,” concludes Turbide.
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