Becoming lean has been a goal of most companies over the last few years. Why is lean so popular? Lean delivers what companies really need in today’s highly competitive world – shorter lead times, improved quality, reduced cost, increased profit, improved productivity and better customer service. Still, not all businesses and manufacturing enterprises operate with Lean Best Practices.
What is lean? Lean is a western adaptation of what started out as the Toyota Production System. Viewed by many as models of efficiency and productivity, Toyota has achieved remarkable success through a singular focus on adding value. A simple enough concept, indeed, but difficult in practice because it takes a change in perception and focus that at times may seem counter intuitive.
- To become Lean, a company must take a hard look at processes and practices to identify those things that truly add value for the customer and eliminate those that do not.
- The continuous pursuit of waste elimination is the essence of lean.
- Production processes and production activities can be directly addressed in this value vs. non-value campaign.
- Lean can and should extend beyond the plant. Indirect activities such as logistics, administration, engineering, and warehousing, as well as other non-manufacturing activities can benefit as much from lean thinking.
- Eliminating waste and fostering continuous improvement are what lean is all about.
- Lean is not an overnight quick-fix strategy for production improvement – lean is an unending commitment.
As lean thinking has evolved and the concepts broadened, lean advocates have come to recognize that Enterprise Resource Planning (ERP) and lean work together very well – each supporting and enabling the most important objectives of the other. Lean purists point to several basic ideas that are the foundation of lean.
In fact, leaders in ERP technology development, including Epicor, a global leader of innovative business software solutions for the manufacturing, distribution, retail, hospitality and services industries, advise enterprises to recognize the world is getting…leaner.
5 Lean Best Practices [contextly_sidebar id=”TXnZTss0fyDyWdjoKQ8IcYnOwFpaQfU7″]
Lean is not a one-time project, nor is it ever complete. It is common practice to set initial goals when first entering a lean transformation project, but it is essential that achieving those goals is not seen as an end point. There’s always more to do – more improvements to attain, more efficiencies to discover, more refinement of processes and procedures to eliminate waste and improve return on lean investments.
The 5 lean principles of value definition and specification, value stream mapping, uninterrupted flow, customer pull and the pursuit of perfection are all supported and enhanced by comprehensive information control and the management tools that an end-to-end enterprise software suite delivers.
The 5 Lean Best Practices are:
The nebulous Lean definition of waste – anything that doesn’t add value – allows plenty of opportunity for enterprise systems to contribute to the cause. In the most general sense, it is difficult to act on or improve what you don’t know or can’t see. ERP systems are the central nervous system of the organization. They carry the definitions, the data, a record of the activities of the organization, and provide the measurement systems for determining where opportunities for improvement lie – and for measuring progress of efforts to reduce and eliminate waste.
In addition, most ERP systems also provide the ability to model and test alternatives – so-called ‘what-if’ scenarios – that help focus efforts on the highest payback activities. More specifically, processes and procedures are embedded within the ERP system’s routings and workflows. This existing documentation allows organizations to clearly see what happens today and provides the mechanism for implementing new and more efficient procedures.
Lean is not a one-time project, nor is it ever finished. It is common practice to set initial goals when first entering a lean transformation project, but it is essential that achieving those goals is not seen as an end point. There’s always more to do – more improvements to attain, more efficiencies to discover, more refinement of processes and procedures to eliminate waste and improve return on Lean investments.
Enterprise systems, as previously mentioned, contain the definition and documentation of processes and procedures – the “as-is” state before any changes. As improvements are made and the changes entered into the system’s files, these new definitions serve to enforce and perpetuate the improvements.
Comparative measurements document the effect of the changes on lead-times, costs, and efficiency. After the initial objectives are achieved, the system captures the input needed for the next round of improvements; the definitions within the system identify current activities and offer a place to start identifying and eliminating waste.
Streamlined Sales & Customer Service
Customer service has to be a focus of any organization and lean efforts can and should not only strive to remove waste from customer-facing processes, but also deliver better customer service at the same time. When waste is removed from customer service processes, delays, inconvenience, mistakes, and costs also are eliminated. The resulting streamlined processes inevitably make it easier and more rewarding for the customer to do business with the company.
Most enterprise systems today give as much focus to Customer Relationship Management (CRM) as to internal operations. Some actually go as far as to embed CRM functionality within the ERP solution. CRM capabilities simplify the order management process by aggregating information from across the business and making it readily available to customers and customer service agents. Integrated pricing, configuration, order validation, availability checking, credit checking, and the smooth the order handling process – delighting the customer and saving time and effort on the part of customer service agents, engineers, warehouse personnel, and accounting personnel.
Orderless Production Flow
While lean principles can certainly be applied and are very valuable throughout the entire organization, most people think of lean in the context of the plant floor. The most vivid examples – at least to date – come factories where work is made to flow smoothly through the plant with absolute minimum delays, handling, inventory, downtime, scrap, and rework.
The stereotypical lean plant optimizes production flow. Flow manufacturing – continuous flow, demand-based flow – is characterized by production lines and/or cells in which work moves piece-by-piece through the process, not in batches. Essentially, the flow of work is controlled.
Special routines in the automated production planning process, in a system supported, orderless, demand-based flow manufacturing situation, adapt the usual planning process to smooth work flow and keep production lines and cells evenly loaded and operating at peak efficiency. This is especially important where demand and product mix fluctuates, and/or there is a mix of
long-running contracts and smaller short-notice orders. These planning tools extend to proper sizing and timing of material deliveries with electronic release signals to vendors for timely delivery of needed supplies and parts.
Lean principles can and should be applied to activities that reach beyond the walls of the plant and office. On the demand side, the better the forecast, the better you are able to plan and produce what customers want, when they want it, with minimal inventory and expediting. The key to a better forecast is to mine the information and knowledge that resides with sales people, distributors, agents, representatives and, yes – customers.