Enterprise Software and Lean Manufacturing

Posted by Gerry Poe

lean, kaizen, value stream mappingWithin the Enterprise Software world, lean manufacturing represents a cultural change at all levels of a company. The prime objective of lean manufacturing is to eliminate waste, whatever form that takes. The most obvious examples in the production area might be excess materials in storage, work-in process, and finished product waiting for buyers, but it can also be unnecessary movement of staff and many other processes that do not ‘add value’ to finished items such as setup time.

The objective is to deliver orders on-time with minimum inventory with the shortest lead time and highest possible utilization of resources adding value.

Most lean manufacturing initiatives start with a process called Value Stream Mapping. This really is a formal way of analyzing how we produce things and identifying tasks or areas where no value-add takes place. The process then moves onto what is termed ‘lean thinking’. This is about looking at average production rates for each product (Takt Time), load leveling (Heijunka) and process redesign to attack the waste problem.

Process redesign will often use techniques such as Kanban to provide an easily understandable and visual method of controlling the movement of materials and controlled by demand order pull rather than what has been called MRP push. Kanban can be central to lean initiatives but, in reality, it is just one step along the road to the ultimate lean environment which is Make (or Build) to Order or MTO.

Why is this? The ultimate test of how lean you are is to ask the question –

"If you stopped accepting orders today and then waited until the factory stopped how much inventory would you have left"

If the answer is 'zero' then you are truly in a MTO environment but if you relied on Kanban systems, only final assembly or dispatch are MTO. All upstream processes are Make to Stock. Kanbans are simply a better and more visual way of controlling inventory. It is not the leanest you can be and, while demand is pretty stable they work very well, but they are less well able to deal with variable demand.

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Tags: ERP Software, Lean Operations, Lean Manufacturing

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