As Lean thinking has matured and evolved Lean advocates recognise that Enterprise Resource Planning (ERP) and Lean methods work extremely well together – each supporting and enabling the most important objectives of each other. Often ERP implementation is also referred to as business transformation project so it makes perfect sense that LEAN and ERP are the perfect partners to truly refine and aid manufacturing businesses.
The Lean manufacturing principles which are resulting from the Toyota Production System (TPS) and follow the five concepts below:
One —- Identify Value
Two —- Map the Value Stream
Three —- Create Flow
Four —- Establish Pull
Five —- Pursuit of perfection
These five principles are supported and enhanced by the management tools available in an end-to-end ERP solution such as Epicor ERP.
We explain below as simply as possible how LEAN and ERP can support each other through the principles of Lean.
All the standard principles of customer management still apply within a Lean environment – delight the customer in order to retain their business and aid the creation of a competitive edge. To do this a business must understand exactly what their customers need from them and what processes are attached to customer value and those that are not. Analysis of the sales, processes and operational information that is traditionally held within your ERP system helps identify the value within your business that supports Lean thinking.
Map the Value Stream
This principle is completed by mapping all the steps involved in the customer order right down to the delivery of the product/service. There is a requirement for large amount of detail and time spent in understanding the cycle such as; Time of each step – Rework % – Lost time – Up time of machines – Number of employees involved in each task. The goal is to identify areas of wastage and areas of abnormalities that can be addressed. This data will also help the business understand where the opportunities lie within the “Value Stream.” The value stream map shows in picture format areas such as the silos, breakdown of processes and resource issues. This type of process mapping is a standard part of Aspera’s ERP implementation methodology.
So how do you make if flow better – remove the waste and non value added processes. This will lead to shorted lead time in manufacturing processes. The identified improvement opportunities will be turned into Kaizen projects normally between 6-12 months duration (Kaizen – continuous improvements). The overall results when all projects are completed a leaner value stream with shortened lead times and flows that make the business quicker and smoother. Epicor ERP delivers the agility required to support continuous improvement processes.
What do we mean by “Pull”? Pull ensures that you build just what is required and reduced or no wastage. The business is now focusing on the products that will receive revenue. So you are only manufacturing what the customer orders and not what might be sold. The more flexible the operations is, the more removal of waste and better alignment to the pull from the customer manufacturing. Planning and Scheduling within your ERP solution will aid the setting up customer orders in a planned and controlled process to suit your business needs.
Pursuit of perfection
Lean manufacturing principles is not a one time effort – continuous improvement and identifying the areas for improvement are key to ensuring your business remains the Lean machine you need it to be. Keeping the Lean principles in place coupled with the seven wastes will support the continuous improvement projects. Underpinning these two concepts will help drive the Lean culture throughout your manufacturing business. Epicor ERP is not a solution that is static, it has and should be modified as the business changes. Aspera provides the support required to ensure your ERP solution stays current.
Eight Wastes to be concerned about with Lean Manufacturing principles – what are they I hear you say? They are quite logical when you sit down and think about it and they fall under the following:
Eliminating the wastes above can be achieved through the implementation of Lean and the various tools further supported by ERP. Implementing Lean should not be completed with removing waste as the goal but implementing the principles and the pull based on the customers needs. If the implementing of Lean is from the wastes and not the principles it can often result in non-value added process made better and the business getting better at delivering what the customer may not want. Lean Principles implemented will result in the wastage reduced.
Along with the Lean benefits identified through the principles above, Aspera delivers ERP Solutions that support Lean manufacturing with key benefits: