Phil Coy @leaniac
Managing Director of Strategic Services
Let’s face it, ERP products are massive affairs. They have to be in order to support the breadth of functions across an enterprise and business requirements across industries. The selection of an ERP product sets a course for an organization, not for a few years, but for a decade or more. Despite the hundreds of hours spent by an ERP selection team with representation from every area, the depth of review often comes down to a comparison of checklists.
Lean is likewise a strategic initiative that will span every area of an enterprise and sets a long-term course for an organization. Companies who are either early in on their lean journey or just contemplating lean need to know that their ERP can facilitate their adoption of lean instead of becoming an obstacle that must be either ignored or worked around.
“Legacy ERP systems have a reputation of being an obstacle to lean processes… Successful manufacturers will adopt modern technologies that have built-for-purpose features that directly support modern lean methods.”
– Melissa Cook, Former Senior Director and Global Manufacturing lead, Microsoft Dynamics
You can find dozens of ERP products with the checkbox for lean manufacturing checked. But what does that really mean? Here are some key questions that may help to separate ERP products that have been engineered to truly support lean principles and practices vs. those that have some lean window-dressing that barely hides the fact that they are based on traditional MRP.
1. Does the lean manufacturing solution rely on MRP?
Lean planning and scheduling is based on pull signals, leveled heijunka schedules, and flow. A solution that requires MRP is suspect. A dead giveaway is if you hear that some functions have to run overnight or in batch or some results aren’t available immediately.
2. Does the lean manufacturing solution support visual management?
Visual management is at the heart of lean. Are there graphical views that show status, material availability, capacity, and loading of work cells, and visual kanban boards that can be shared across the enterprise?
3. Are kanbans supported with real-time updating?
For some ERP products, a kanban is just another type of production order. A complete solution will support one-bin, two-bin, and multi-bin fixed quantity kanbans with either all visual management or very simple e-kanban management. Automatic kanban sizing should be provided based on demand or usage history.
4. Are there visual tools to level demand?
Leveling demand to smooth out the peaks and valleys of customer requirements allows for more steady state operation especially for high mix/low volume value streams. Leveling provides the opportunity to sequence work to reduce the impact of changeovers and establish a cadence for manufacturing aligning to takt time.
5. Are pull signals fully integrated for make to order business models including pull through feeder cells to final assembly?
Dynamic pull signals using kanban cards should be immediately available based on real-time updates immediately at customer order entry and fully integrated into capable to promise determinations. Make to order requirements should be able to be immediately passed back from final assembly operations to create kanbans for feeder cells. And without having to run MRP first.
6. Does an operator in the process have a simple way to view work coming up, to complete work assigned, and easily reference drawings, visual method sheets, or standard work?
If we define value as what the customer is willing to pay for, all of ERP is waste… more precisely non-value add but necessary. Every operator should be able to quickly and visually review workload, complete work assignments with a single click, and have reference information needed immediately available at his or her work place.
7. Does the lean manufacturing solution support a value stream approach including support for process-oriented product families?
Identifying value and the flow of value creation creates a horizontal view of an organization as opposed to the traditional functional silos. Product families of like processing are essential support for the complexities of high mix/low volume value streams.
8. Can the lean manufacturing solution be easily reconfigured (without IT) to immediately implement improvements from kaizen events?
To support continuous improvement and a bias for action, process changes from kaizen events must be able to be immediately put into place without requiring any outside IT help. The lean manufacturing solution must be robust enough to address a wide variety of lean techniques and flexible enough to support continual incremental change.
Finally, no ERP products as yet support all of the functionality required to be a complete solution for lean transformation but that will surely come. In the meanwhile, if lean is your strategic direction, be sure that the ERP you choose will help to facilitate your lean journey.