Monday, 10 August 2020 11:30

ERP & Lean Manufacturing: Getting the Balance Right

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Lean Manufacturing looks to reduce waste in the manufacturing process, while still maintaining productivity. ERP helps to manage business processes, through the use of integrated software.

Some companies think that you have to choose between Lean and ERP, however, the two methodologies go hand in hand.

Key Objectives of Lean Manufacturing

Key Objectives of ERP for Manufacturers
  • Improve QUALITY
  • Increased PRODUCTIVITY
  • Reduce WASTE
  • STANDARDISE
  • OPTIMISE resources
  • Reduce COSTS
  • STREAMLINE processes
  • Improve QUALITY
  • Reduce COSTS
  • Better PLANNING (materials and production)
  • Reduce STOCKHOLDING
  • INTEGRATE departments
  • AUTOMATE repetitive, non-value-add tasks
  • MONITOR, ACTION and IMPROVE over time

 

ERP & Lean Manufacturing: Getting the Balance Right

Mixed Mode Manufacturing

The realities of business in Ireland mean that SME manufacturers cannot always follow a single model. Widget makers have gone to the far East by and large. Now, we have a lot of manufacturing businesses that make some products on a custom basis, some standard products with a customisable element, and some products that are catalog-based, standard build. We therefore have a range of different methodologies going on, and not all readily fit the lean methodology. We have seen manufacturing companies with some work centres applied to lean, some not. Even sub-assemblies of a product can be “lean” assemblies (where there is commonality among various products) while others are not.

 

Forget Cash: Quality is King!

Quality is where it is at nowadays. Whether you are in process manufacturing (food, pharma, chemicals – traceability and all that goes with it), or engineering, medical devices, etc. you can expect to be audited – if not from a regulatory perspective then by your customers! This is one area where ERP and Lean can help each other, as the ERP system collates the data to feed Lean.

 

ERP Can Help Achieve Lean Goals

Let’s look at core those objectives again:

  • Quality: ERP feeds lean with data.
  • Productivity: ERP produces a production schedule compliant with Lean objectives.
  • Waste: A well-implemented ERP will allow you to monitor waste – e.g. production downtime, material waste, etc.
  • Standardise: ERP will give you standardised materials listings (BOM), Routing sequence, process times, change-over times, costs.
  • Optimise Resources: ERP calculates your production schedule to optimise capacity, machine and operator availability. Other departments have the information they need in a timely manner.
  • Reduce Costs: Reduced stock-holding via MRP, reduced production cycle via scheduling and capacity planning, reduced overhead due to efficiency in all departments is all achieved via ERP.
  • Streamline Processes: This is actually the core of all ERP projects – to streamline processes throughout all departments, not just production.

 

ERP Process is an Integral Part of the Lean Project

It is important to revisit the ERP solution as part of the LEAN project. Changes to manufacturing process/flow must be reflected in the ERP design, otherwise there will be conflicts.
For example, if a Kanban system is introduced, ERP needs to know about it and be adjusted to reflect this. Likewise, machine changeover times and run rates need to be reflected accurately in the ERP solution.

 

We are not all Toyota, and remember: Toyota use ERP as well!

 

To find out more about how ERP can work with your Lean Manufacturing project, get in touch with us today here or by phone, 01 244 9580.

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