Improving Operational Excellence - It's not Lean or ERP-Part 1

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Author Lora Holman

Director of Marketing More ...

Could this be the Hatfield & McCoy's feud of manufacturing technology today?

Did you catch the series on The History Channel – Hatfields & McCoys? It's the true story of a legendary family feud – one that spanned decades and nearly launched a war between two states.

Comparisons can be made to this long running feud in the arena of manufacturing technology. On one side is the ERP/MRP "family." On the other side (and across the proverbial state line) is the lean thinkers "family."

Both are committed to operational excellence believing they have the best interest of the manufacturer's business in mind. Prevalent however is a black and white perspective that can spell disaster if a business narrowly chooses either or.

Can't we work across the aisle? Why can't we all just get along?

Here's part one of an interview with Eric Wagner, Manufacturing Consultant & CPIM, Partner at Agility Business Solutions, Inc.  Check back soon for the follow-up!


Questions:

  1. What is the #1 question that you get after your presentations on the Lean/ERP topic?

    Eric: "How long does it take to implement (lean) and can I get rid of ERP? That's actually two questions. And before I answer those questions, I ask them: 'To what degree are you in need of or willing to implement lean practices?'. When they want to know how long to implement lean, I explain that we find it most successful to first pick one work cell or vendor to nail down implementing the best lean practices, policies and procedures in a 30 day pilot. Then once we get the details of change and adjustment down from this first test pilot, we can roll it through other areas more quickly."

    "Now to answer the second part of that question – can I get rid of ERP? – we help the client to understand how they need ERP for planning. If the client's process of manufacturing their product(s) requires any sort of lead time to acquire the raw materials, they need ERP. So if their customer's demand for delivery is a shorter window of time than the lead time to get the raw materials to make the product---they need ERP. Whereas lean is for execution."

  2. How did the battle between ERP and Lean get started?

    Eric: "MRP was one of the first aspects of manufacturing to get computerized. As more manufacturers were driven by a need to meet customer demand on shorter lead times they implemented MRP systems. KanBan (as a tool of Lean Practices) was around before that first gaining acceptance in automotive. To this day ERP software products are not written integrated to Lean tools like KanBan."

  3. What happens to a business when they implement lean only?

    Eric: "You get the benefits of reduced lead time, simplified reporting, and better execution, yet you forfeit the overall control and integration of other aspects of the business like accounting, sales orders, and inventory. As a result, you may see a build up excess inventory, reduced inventory accuracy, and lack of visibility across the business. Again – KanBan (as a tool of Lean) is not connected to suppliers. This is why you need the planning tool of ERP."


Microsoft Dynamics AX is a robust ERP and Lean manufacturing enabler. The latest release, Dynamics AX 2012, combines the powerful planning and execution features required of comprehensive ERP integrated with the features of Lean to assist the "blended" manufacturer. Contact Agility Business Solutions, Inc. to learn more.

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