For a long time, the idea of implementing ERP and getting lean seemed like they were worlds apart. ERP was robust and embraced all aspects of the business: analyzing sales trends… forecasting inventory… pushing materials through production… managing the many aspects of the business. Meanwhile, lean was small and responsive… material is pulled through production… just-in-time inventory planning becomes paramount… paring things down to their simplest proportions and keeping things moving constantly are key.
And yet. When you look at lean coupled with ERP—as so many companies do today – you begin to see the synergies. Streamlining processes (via lean), then automating them (via ERP). Stripping complexity down (lean) and then using the improved process repeatedly throughout your workflows to eliminate redundant steps and waste (ERP).
Take kanban. These are visual signals used to resupply inventory. They’re an important early step in the lean process, and especially effective in single plant locations. ERP supports kanban by turning these visual signals into electronic trigger points, and they work just as effectively across multiple locations.
A key principle of lean is the just-in-time inventory noted earlier. You want just enough material to meet demand and keep flow moving. It’s all about eliminating waste.
Well, with ERP, you can analyze individual workstations or shop floor cells. You can investigate and analyze the impact of, say, setup times or machine changeovers or maintenance, and their effects on the overall schedule plan.
In the same vein, your ERP reports provide you with the data you need to compare your current inventory levels to your sales demands, and adjust accordingly – and quickly. That’s critical to keeping inventories low, just-in-time and always moving.
In similar fashion, ERP can identify and track waste, the bane of lean. You can’t improve something unless and until you can measure it, and with the right ERP setup you can track your most wasteful production areas, and know where to focus your efforts to eliminate it.
In other words, ERP allows you to analyze all of the many factors that come into play on the shop floor, and throughout the business. It can provide the raw information you need then to begin to identify mistakes, inefficiencies and waste – on the way to getting lean.
We’re big believers in the combined power of lean and ERP. In our view, they go together like a hand and glove – and together, they are the single most important factor in improving performance and profitability among firms that are growing – and those that want to grow.