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LEAN and ERP - Aligning Principles for Success

 

erp and lean enterpriseLEAN and ERP - Aligning Principles - Utilizing LEAN enables your company’s processes and procedures to align with ERP (enterprise) operations while reducing cost and increasing profitability.

LEAN initiatives can be hugely strengthened with a synergistic utilization of ERP.  Specific LEAN initiatives will eventually fail without considerable attention to specific ERP systems and processes.  In short, LEAN addresses how processes should work and ERP makes sure the processes work consistently.

Conversely, systems that operate without embedding long-term improvements essentially miss the point. A frequent problem with ERP implementations is, the question, “What are we trying to achieve?” is met with vague answers.  So, then, some specific ERP implementations require the guiding strategy of specific LEAN principles to fulfill their business improvement objectives.

Benefits and features like Process Workflows, Enterprise Architecting, Advanced Planning and Scheduling, Inventory Forecasting and Optimization are just a few standard, off-the-shelf, systems you should expect in a ‘modern’ ERP Suite.

LEAN Manufacturing is a powerful approach used by manufacturing companies to drastically improve manufacturing processes. The same approach is yielding business benefits outside of manufacturing; such as in LEAN Logistics.

Manufacturing was also the original spawning ground of MRP and MRP II which later evolved into the now ubiquitous ERP (Enterprise Resource Planning) that we find in virtually every type of corporate entity.

In the business world of 2011, it is appropriate to ask how LEAN and ERP interact – if at all – and specifically whether they are mutually supportive, mutually exclusive or independent concepts altogether.

Workplace Organization: 5S - The five “S”s of workplace organization are “sort”, “sustain”, “stabilize”, “scrub” and “straighten”.

  • Sort: Sort out what is needed and what is not needed. When in doubt, throw it out.
  • Sustain: Make the 5 S’s a way of life; this requires discipline.
  • Stabilize: Make cleaning and checking a routine practice.
  • Scrub: Keep machines and work areas clean.
  • Straighten: Arrange essential things in order for easy access.

The focus of 5S activity is to organize the workplace in order to make it more productive. After 5S, one expects to see a place for everything, and everything in its place.

More LEAN Principles and Activities:

Value Stream Mapping Value stream mapping is a method to describe the flow of material and information through the production system. By graphically portraying the process, one is able to see where value is added and value is lost.

Quality at the Source The guiding principle is that quality should be built-in, not inspected-in.

Total Productive Maintenance (TPM) TPM is the philosophy and practice of preventing the loss of productive machine time due to breakdowns, minor stoppage, idling, operating at less than planned cycle times, changeovers / setups, unacceptable quality, etc.

Visual Management Visual management systems enable anyone to immediately assess the current status of an operation or process at a glance, regardless of their knowledge of the process.

Set-up Reduction The objective is to reduce the time lost during machine setups and product changeovers.

Batch Size Reduction (one-piece-flow) Product should move (flow) from operation to operation only when it is needed, in the smallest increment, one piece being the ultimate (one-piece-flow). The LEAN philosophy tries to reduce batch, lot or mass processing as wasteful.

Cellular Manufacturing Cellular manufacturing focuses on a product-centered sequence of operations instead of operations-centered. The layout is usually a U-shape or a semi-circle. Equipment is movable and is placed closely together for quick feedback between operators. Workers in manufacturing cells are typically cross trained to perform multiple tasks.

Standardized Work Standardized work is the documentation and application of the best practices of a manufacturing process. It may include photographs and/or drawings. It ensures that production operations are performed the same way each time. It is developed together with the operators and is posted at the workstation.

Work balancing (TAKT-time) - Work balancing maximizes operator efficiency by matching work content to TAKT time. TAKT time is the rate at which customers require the product.  TAKT time is computed as: Available work time per day Daily required customer demand in parts per day

Production Leveling / Smoothing - The objective is to average both the volume and sequence of different model types on a mixed-model production line.

Point-of-use Systems - Point of use storage reduces material handling requirements and makes it easier to determine raw material needs due to smaller shipments from vendors. All material is stored where it is going to be used in the process.

Kanban - Kanban is a pull material replenishment system, based on the principle that material is pulled through the production process based on actual usage of material. Kanban uses visual signals, usually a card, to move material through the value chain.

Kaizen – (Kai (To modify, to change make better) + Zen (Think, make good, make better) = Kaizen). The secret to Kaizen is to create an atmosphere, a culture, of continuous improvement by focusing people on problems. The objective is continuous improvement through incremental steps.

Utilizing SYSPRO enables your company's LEAN processes and procedures alignment to best ERP practices and operations while reducing cost and increasing profitability.  Benefits and features like Process Workflows, Business Intelligence, Enterprise Architecting, Advanced Planning and Scheduling, Inventory Forecasting and Optimization are just a few standard, off-the-shelf, systems in our SYSPRO Software Suite.

SYSPRO is how 5S is applied daily forming a single source solution that does not require external applications to run your business.

For more information and to arrange for a personal tour of SYSPRO ERP for your company:

 

erp and lean syspro

 

 Up Next: Which System Controls Flow, ERP or LEAN?

References:

SYSPRO: Lean and ERP Document , Http://www.syspro.com

Bartholomew, Doug. 19 July 1999. Lean vs. ERP. Industry Week.

CIO Magazine. 2006. The ABCs of ERP. Retrieve from ttp://www.cio.com/research/erp/

Davis, Brain. April 2005. The ERP route to lean. The Manufacturer.

Gemba Research. 2006. Lean Implementation Expertise. Retrieve from http://www.gemba.com/

Goldsby, Dr. Thomas & Martichenko, Robert. 2005. Lean Six Sigma Logistics. J. Ross Publishing, Florida.

Guide to ERP software. 2006. Enterprise Resource Planning (ERP) Software Overview. Retrieve from http://www.findaccountingsoftware.com/

IFS White Paper. March 2004. Going lean, step by step with IFS applications. IFS R&D.

Nakashima, Brian. September 2000. Lean and ERP: friend or foe? Advanced Manufacturing.

Pritchard, Stephen. December 2002. Can lean manufacturing and ERP co-exist? The Manufacturer.

Sweeney, Judy & McGovern, Joyce. 2005. East Meets West—Lean Manufacturing and ERP Are a Better Fit Than You Think. . Retrieve from http://www.amrresearch.com/

Seradex Manufacturing Software. 2004. Lean Manufacturing – Seradex ERP Solutions. Retrieve from http://www.seradex.com/

The Hands-On Group. 2000. ERP & Lean: How “Lean Manufacturing” Makes ERP Credible!”. Retrieve from http://www.handsongroup.com/

The Hands-On Group. 2000. Transition to Lean: Top Management Implications. Retrieve from http://www.handsongroup.com/

About SYSPRO ERP Software Suite:

SYSPRO software is an award-winning, best-of-breed Enterprise Resource Planning (ERP) software solution for on-premise and cloud-based utilization.  Scalable for rapid growth, SYSPRO is acknowledged by industry analysts to be among the finest, best-in-class enterprise-resource planning solutions in the world. SYSPRO software’s “power” features, information visibility, analytic/reporting capabilities, business process and rapid deployment methodology are unmatched in its sector. While SYSPRO customers represent all industry segments, rich extensions for food, medical devices, electronics and machinery/equipment companies and attention to customer satisfaction/success make SYSPRO the first choice for growing companies.

SYSPRO, formed in 1978, has earned the trust of more than 15,000 companies globally for its suite of pragmatic, yet visionary software that enhances the competitive thrust of small/mid-sized manufacturers and distributors. SYSPRO’s adherence to developing technology based on the needs of customers is among the reasons why SYSPRO enjoys one of the highest customer retention rates in the industry.

 

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