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How ERP Systems Can Support and Enhance Lean Manufacturing

How ERP Systems Can Support and Enhance Lean Manufacturing


May 17, 2017
Manufacturing and Distribution

ERP and Lean Manufacturing

Lean manufacturing is designed to reduce waste and tighten workflows, so it stands to reason that IT infrastructures that emphasize managing highly detailed data and processes rather than eliminating “unnecessary” steps are met with some skepticism. The seeming paradox was hotly debated when manufacturing resource planning (MRP II) came to the forefront in the late 1980s and, despite the evolution of enterprise resource management (ERP) solutions, some lean practitioners and corporate decisionmakers still cling to outmoded ideologies.

The reality is that modern ERP systems can and should coexist with lean manufacturing principles since both, in essence, offer the same benefits to a business—reductions in lead times and inventory, better quality control, and improved customer service. The main difference is in approach; lean dictates manufacturing strategies, whereas an ERP system provides the analytical depth and relevant, real-time data to support manufacturing decisions.

While a business can implement lean initiatives without aid of an ERP system, doing so may not optimize key processes:

  • Production: Lean is designed to eliminate waste across the board, from labor to raw materials and equipment capacity. ERP can support these efforts by accurately predicting production trends, allowing manufacturers to review analytics and accurately project anticipated production spikes, staffing needs, machinery run times, and needed inventory.
  • Quality Control: An ERP system is a 24/7 assurance that lean guidelines are maintained, particularly that of continuous improvement. The ongoing gathering, monitoring, and evaluation of data not only identifies quality anomalies, it builds context around the issue and allows lean practitioners to drill into cause-effect relationships and align actions and desired results in continuous improvement fashion. Repair/replace decisions can be made on initial metrics, and new data can be pulled once adjustments are made to study impact, monitor progress, and immediately react to defects or other warning signs before a run is ruined.
  • Customer Service: Customers are increasingly involved in the manufacturing process, from collaborative design through product customization. As a result, their expectations surrounding delivery speed and value are very high, and they have no tolerance for mistakes—they can and will go elsewhere if expectations aren’t met. An ERP solution does the heavy lifting for manufacturers when it comes to details. It automates tracking and makes any information the customer wants or needs—like delivery dates or current invoices—readily accessible. By taking care of the data points and customer relationship building, ERP supports lean initiatives by freeing manufacturers to focus on and efficiently produce quality products.

Whether you’re running lean or considering lean implementation, an ERP solution can enhance your efforts by providing the data needed to support minimal-waste process decisions on the floor. Reach out to a Wipfli expert today to discuss how you can align lean manufacturing and your IT infrastructure.

Author(s)

Suzanne Koss
Suzanne Koss, CPIM
Partner
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