Most organizations understand that lean manufacturing techniques can transform the way companies deliver products to their customers and manage their supplier relationships. However, we’ve seen a big performance gap between those manufacturers that simply use a few lean tools like 5S on the shop floor versus those that have built an entire culture based on lean thinking. Many companies tidy up their shop floors and organize tools but fail to get the real benefits of lean manufacturing principles.

What Lean Looks Like

In our work with automotive, electronics, aerospace and other industrial manufacturers, we’ve found that the most successful companies employ the following approach:

  • Train everyone in the organization on kaizen (continuous improvement) techniques, including shop floor and office workers
  • Recognize and reward even small ideas
  • Implement technology that supports lean processes such as kanban, standard work, poka yoke (mistake-proofing) and total productive maintenance.
  • Encourage people to try new things in search of improvement by acknowledging successes and failures.

Why the Gap?

In many cases, the differences in the degree of lean integration stem from the functionality of the ERP software the companies use. Technology that truly supports a lean approach enables leading companies to outperform their competitors by continuously measuring, monitoring, and responding to key production metrics in real-time. They are constantly looking for ways to improve every aspect of their operation and have the data to drive the decisions.

Advances in ERP systems including improved analytical tools and access to real-time production or “work-in-process” data deserve closer examination.

Modern ERP systems that are purpose-built for manufacturing will include features not found in the prior generation of solutions. These include barcoding, integrated, shop floor management, quality, labor tracking, OEE reporting, and much more.

Manufacturing software that enables a journey to lean offers:

  • True visibility. In lean, “if you can’t see it you can’t lean it”. ERP systems must deliver a real-time solution that lets a company easily see operations with a high degree of clarity.  For example, if a batch of parts or material is scrapped, customer service and purchasing people should be notified promptly and automatically so they can take appropriate action.
  • Support for documenting improvement ideas with workflow for evaluating and implementing the ideas and measuring the results.
  • Support for a comprehensive problem-solving process that enables all participants to communicate about root causes, corrective, preventive actions and so on.

On the Way

Customer expectations continue to escalate, driving the need for additional variations to existing products, faster launches for new products, and decreased order cycle times. This requires increased flexibility in existing plants, with suppliers, and across the entire supply chain.

For those well on their way to lean, an effective ERP system is a solid foundation from which manufacturers can manage lean transactions across core value streams that extend from the customer, through production, and back to the supplier.


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