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Vol 31 - No 04 - June 2005 Branch news : Thames Valley - The Role of ERP in Lean Manufacturing A group of about 30 IOM members and guests were welcomed to the premises of Microsoft in Reading to hear sessions given by Neil Richards and Updesh Dosanjh of WCI, World Class International – an excellent turnout on the night of a small, insignificant football match (C vs.L)! Neil first asked us our expectations of the evening – simple! The role of ERP in lean manufacturing. He explained to us the evolution of WCI, from its small start as World Class Manufacturing, to the medium sized outfit that it is today, offering process design, web technology, managed services and more. He reminded us of the five steps to lean, as outlined in Lean Thinking, emphasising that we need both efficiency and effectiveness in our operations, that value is all about whether the customer is willing to pay, and of the value added ratio. Neil then proceeded to describe a 5-day transformation project: Day 1 was spent analysing the current flows, so that the value added could be clearly identified. A map was drawn of the flow through the plant, the lengths of the paths were measured and a value stream map was constructed. It showed 9.12 minutes of added value during a lead time of 12.5 days, in an environment working 2 shifts per day. The MRP system transactions were included on the map. On Day 2 the process was re-designed to create more flow; the physical proximity of machines was designed in; flexibility was sought; balanced flow was an objective; and where possible processes were brought together. The planned lead-time was reduced to 0.6 days. Day 3 was implementation: get in the cranes; hands-on activities for all; engage all of the necessary workers in the process. On Days 3 and 4 some world class techniques were introduced – applied common sense (ACS), reliability of process, fast changeovers and housekeeping along the lines of 5S. During Day 4 the company started to operate with the new process and uncovered a couple more ideas: merging two processes into one; and people saying “I have always wanted to do that, but was not allowed to - now I can!”. Finally, on Day 5 the findings of the project were presented, the event celebrated and the benefits achieved demonstrated – WIP down by 80%; space required down by 20%; set-up times down by 40%; lead time down by 95%; distance travelled down by 90%; transactions booked in the ERP system down from 82 to 2. Of course, the minimal use of the ERP system led to tensions in the company. They started to pull with Kanbans, rather than push with the ERP system. The production was now planned on a finite capacity scheduling board. It was simple enough not to need to use software; the team could plan its own rate of production to meet the demand. Clearly an excellent transformation, as we have seen before in the successful implementation of lean thinking. Neil then threw 3 conclusions at us, which I suspect were there to provoke discussion and argument on the subject: 1. Lean and ERP do not mix one little bit; 2. Manual systems are sufficient; and 3. Task number 1 in a lean transformation is to throw out the ERP system. This, of course, is an extremely black and white view, and I, for one, could not agree with any one of the 3 conclusions. A vigorous discussion ensued! Various ideas were put forward, none of which I would disagree with. ERP is more about planning, whilst lean is more about execution; manual systems are OK when systems are simple, but many companies have huge complexity and ERP systems tend to be necessary to cope; ERP can be about the long, the medium and traditionally the short term; lean is about the short term; with just lean thinking, how do you plan for the medium and long term?; every company should be using elements of lean; not every company needs the whole shooting match; learn what ERP and lean are all about and implement the bits that apply to the successful achievement of your business objectives. After much discussion, and a short break, it was time to move on to the 2nd part of the evening. Updesh talked to us about one example of a new generation of ERP systems, that he suggested help lean and ERP work together. The view is different from 3 years ago. Now WCI has an ERP practice. Whereas a while back they would have suggested that computers are evil. We need solutions that are SMART – lean and ERP working together. Traditionally only a small percentage of the ERP system functionality has been used; or it was used the wrong way; or it was deemed too difficult; or people did not even know the functionality was there! The same issues exist today that have always been there and that successful implementations have addressed – get the right people on board from the project launch, and they will stay on board, and not jump ship later. Updesh went on to describe some of the functionality that is required in this new breed of ERP systems. It needs to be a toolkit - use the bits you need. All the bits should fit together immediately, as soon as you need them. It should be easy to implement. There should be no fixed way of doing things. (Run the business the way you want to, not the way the software dictates?). It just works. Plug and play. As simple as lean. It must be adaptable, agile, ambitious and connected. The processing speed must be faster than shop floor production, so that it can keep up with lean manufacturing. It must be global. (That’s why its called ERP?). Some of this functionality must support lean, he said. It must be possible to update the schedule very quickly. As the customer order comes in, it updates the schedules – no need to wait to run MRP! Updesh agreed that this is not a change you can make overnight. Start off with a more traditional approach and then migrate when you are ready. Minimise the risk to the company by adopting a conservative approach. He said the ERP system must support visual Kanban management. These have traditionally not been controlled in ERP systems. In these new systems, the Kanbans should be visual; data should be simply collected to maintain the status of the Kanbans, using the traffic light principles of green, amber and red. But, of course, for all this to work we still need accurate base data and a cheap, effective way to collect data. Superb connectivity is what is required, to customers, to suppliers, to mobile workers, and the whole concept should be web based or web focused. You have to be able to connect with customers that you don’t yet have, to people who don’t yet work for you and to handle business processes that you have not yet created! Geoff Relph gave a vote of thanks to WCI, Microsoft, and Julie Tayler and the HQ team. We dashed back to watch the end of a 0-0 draw. Which was most exciting, ERP and Lean, or the footie? I know my answer! Robin Goodfellow, MIOM Manufacturing Business Excellence PS My view of all this, for what it is worth, is that UK manufacturing must achieve ERP and Lean working together in beautiful harmony. Failures to implement either or both successfully have largely been due to lack of understanding, born out of lack of education and training. If we are to do this successfully, we need to ensure the project team first fully understands the principles of each and proceed from there. “If you think education is expensive, try ignorance”. We come across too much ignorance. True? Related Topics:
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