There is a concept in Lean Manufacturing called Five S.  It stands for Sort, Set, Shine, Standardize and Sustain.  The idea behind this concept is to organize your work environment (a place for everything, and everything in its place) so that you can be as productive as possible with the least amount of effort.  According to a report from management consultant McKinsey & Company, the average employee spends up to 1.8 hours per day searching for and gathering information in order to accomplish their tasks. This waste can easily be eliminated if the work environment is organized and labeled in such a manner as to make finding tools and information very easy.  Most companies that begin a Lean transformation initiative find that they can improve productivity by as much as 10% just by organizing the work environment.  Sometimes missed in this effort is the need to organize the information system like the physical work environment.

ERP systems and support documentation are a virtual workplace that requires the same concepts and disciplines as a warehouse or plant floor.  Information workers are constantly looking in their business systems for information to make critical and timely decisions that directly impact customers.  Customer or vendor pricing, product availability or specification, open invoices or balances, contract terms or ongoing communications regarding product/service development or quality issues are all bits of data or tools that your team needs to efficiently handle customer/vendor interaction.  The question is, how clean and organized is this data?

It is not unusual to find things such as pricing, contract terms or specifications stored on multiple PCs by the different individuals who champion these areas.  This information is often held on an individual’s computer drive under a filing system known only to them.  Sometimes this information is also stored on a server, but not necessarily in a file system that everyone knows and supports.  In doing an audit of a company that handles quotes worth hundreds of thousands of dollars, we found as many as 4 different versions of the same quote among the salesperson, sales manager, network file and engineering team.  And each was adjusting their version of the quote assuming they were the only ones working on it!

The same holds true for ERP systems.  I have found business systems with product family coding that was incorrect, obsolete items not identified, inactive G/L accounts not labeled, inconsistent units of measure, descriptions of similar items within a product family that bore no resemblance to each other and pricing information that was inaccurate.   Information workers often just worked around these shortcomings by looking up information on cheat sheets that might be stored on their local drive or a network file that they created but no one else knows about it.  It all just meant more wasted time and opportunities for errors.

With Spring right around the corner, now might be a good time to Five S your business systems.  Does your team have a defined location and file system for all customer and vendor documents?  Do you have a standard folder template established that can be used when setting up a new customer/vendor?  An example might look something like this:

• Customer Name_number (Primary Folder)
  • Pricing
  • Product/Service Specifications
  • Quotes
  • Quality Correspondence
  • Billing Issues
  • Agreements

How about your ERP system?  When was the last time you validated your product coding?  Most ERP systems allow you to filter by various codes.  What does your data look like?  Are your units of measurement consistent so as not to cause confusion in the warehouse when picking and receiving?  Are your descriptions clear enough that a new employee can readily identify a product?  Is all of customer pricing set up in your system and noted with expiration dates to allow order entry personnel the opportunity to enter an order rapidly without having to go to cheat sheets to verify the pricing?  Do you have customer and vendor part numbers correctly entered into your system so that invoices between the companies can be easily compared and reconciled without having to reference a cheat sheet to identity what is what?

I have worked with some companies where it literally takes longer for an order to get entered and forwarded to production, than it does to make the product.  Is your order process handicapped because of messy or missing data?  Then maybe doing a Five S initiative is just the thing your business system needs.

-Larry Lukasik, PSSI, March, 2020