ERP for Lean Manufacturing

ERP for Lean Manufacturing

30/05/17

Our customers frequently select Aspera for our expertise in delivering ERP solutions in support of Lean Manufacturing initiatives and Lean Business Strategies.

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.

 

 

Identify Value 

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.

 

 

Create Flow

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.

 

 

Establish Pull

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:

  • Transport – movement of materials from one location to another is a waste and adds no value so why would your customers want to pay for it.  Through the Lean principles opportunities and reduction of waste in this area can mean cheaper to manufacture products and quicker timelines for production.

 

  • Inventory – pieces of product tied up in raw materials, Work-In-Progress (WIP) or finished products has a cost and the ROI can not be achieved unless you have sold the product.  Inventory items use warehouse space, packaging, transport, holds a risk of damage while being stored and maybe discontinued product.

 

  • Motion – What is meant here by motion is the larger motions made by the production workforce such as lifting heavy objects from the floor whereas if the heavy objects where are desk level the time and effort wasted would be removed.  Also another example of wastage within the motion category is that of travel between work stations.  Put together all the motion wastage is costing your business time (=money) and clearly can be improved.

 

  • Waiting – We have all been there waiting for another department or person to provide you with a delivery, fix a machine or provide information.  Beside the frustration that this can cause it also causes disruption of process flow which is not very Lean or supportive of the Lean principles.  This is treated seriously as a result and improvements to processes should eliminate this waste.

 

  • Over-Processing – incorrect techniques, equipment and working to tolerances that are too tight result in processes used that are not required by the customer.  This costs time and money.  The big machine – the one that produces faster and bigger quantities than any other machine is the major non compliant here.  With Lean, using the correct machines to keep the production and workflow producing as required is the way to go.

 

  • Overproduction – the most serious wastes.  Overproduction leads to a large amount of inventory which hides problems within your organisation.  Only producing what is required by the customer and when it is required is the solutions.  The production schedule over time should be production Just In Time rather than Just In Case

 

  • Defects – Quality errors cost money and hard to always find before they end up in the customers hands.  All products that are defective require replacing which is direct waste of resources, materials and customer satisfaction which all cost money.  Quality control systems should be examined constantly under the continuous improvement process.

 

  • Talent and Resources – Making use of people within your business in the correct positions and functions is something we tend not to address.  By listening to your workforce will help drive out talent wastage but also the other wastage within your business.  Efficient use of electricity, gas and water for example will cost and is also a burden on the environment.  So monitoring of same will help reduce your costs.  With regard to the wasted materials such as off – cuts ask can them be recycled rather than going to the landfill this will also reduce your costs and help the environment.

 

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:

  • Efficiency– Removal of manual and time consuming tasks
  • Real Reporting – Improved business Intel enables “Better Business Decisions”
  • Mobility – Conduct your business anywhere
  • Improved Customer Service – streamlined processes improve customer time lines
  • Agility – business should have the ability to change with the moving global markets
  • Improved Data Security – better user permission settings keeping all sensitive information protected
  • Collaboration – enhanced collaboration across the organisation driving improvements continuously
  • Global – Multi site, multi country and multi currency ERP solutions

 

We create partnerships and projects that succeed – with your vision – together we have the winning way to get you there…… Lean thinking ERP solutions from Aspera Call us on +353 (0)1 461 1700 / +44 (0)845 862 0864 or Contact us 

 

Learn about  Epicor ERP and Aspera Solutions