The bottlenecks of combining lean with ERP

The bottlenecks of combining lean with ERP

Lean manufacturing and enterprise resource planning software have a long history of working in different capacities. Lean strategies have always been about minimizing waste, while ERP has been more focused on making sure that there is always stock available for customers. Both attain efficiencies in the production process in different ways, which causes a conflict when both are used at the same time. With new platforms such as Microsoft Dynamics NAV 2015, there is a greater degree of integration between the two practices to encourage the greatest amount of productivity and efficiency. However, to understand what can be attained with ERP and Lean, it’s important to understand what keeps both practices from being successful when combined.

The pull of too much
The major differences between ERP and lean manufacturing can be found at two particular pain points, according to Industry Week. They are in materials planning and production scheduling. However, both rely on basic structural principles in manufacturing that have existed for years. ERP’s strength, on the one hand, is based on analysis of sales forecasts, producing as much as customers are expected to purchase. On the other, lean relies on actual orders themselves, with a significant amount of attention and effort going towards scheduling an order so that it’s completed when the customer wants it.

The difference between these two focuses is often known as push versus pull strategy, which juxtapose each other. Push-based ERP would find that lean concepts may not take into account changes in demand, while those who utilize pull-based techniques such as the kanban system and just-in-time scheduling would see ERP as wasteful. This is not to say that both have been integrated in a company, but historically, these two systems are considered siloed from one another, with ERP delegated to specific functions that don’t heavily interfere with the production process.

Getting a better system
However, more recent ERP systems such as NAV 2015 do take into account lean strategies, giving companies a more agile method of production over time. The software gives companies an incentive to upgrade their legacy ERP systems. There are other good reasons to do that as well, according to ERP Focus. For one, techniques such as kanban are more concerned with satisfying customers than cutting costs over the long term. Many factories deploy ERP with cost savings in mind, running into contradiction with meeting demand as it comes simply because it doesn’t match the total production schedule over the next year. In essence, it becomes impossible to truly implement lean processes.

One aspect of ERP that is gaining ground with new software is single minute exchange of dies, a lean process. The process allows workers to change the setup of machinery for an upcoming order while the current one is being produced. This not only maximizes efficiency, but also creates grounds for companies to be flexible, especially if they seek to run a made-to-order operation. This process can only be found with ERP solution such as Dynamics NAV 2015. Many legacy systems would have resort to workarounds, which tend to negate the effectiveness of the practice.

Posted in: ERP Solutions, Industrial Manufacturing, Manufacturing Productivity

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