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Keeping Lean and ERP Apart
Adopting a strategy of keeping ERP largely outside lean-driven plants has worked successfully for TRW's European Foundation Brakes Division, which comprises eight plants in five countries. The division manufactures brake calipers, drums, boosters, antilock braking systems and electronic stability-control systems, as well as various suspension components.
Looking inward within each plant, the TRW brake division in Europe depends on its lean initiative. But when it comes to dealing with customers and suppliers, ERP provides the information.
"Everything inbound to and outbound from the plant is fed into ERP," says Michel Berthelin, portfolio director, Foundation Brakes.
The reason TRW has adopted this approach is simple.
"These systems tend to conflict," Berthelin explains. "ERP is based on MRP, which works with infinite capacity and ignores the issues we humans have."
As a result, "We are basically running our ERP for anything outside the plant.
"The ERP reflects the orders from the customers," Berthelin says. A logistics planner in each plant, aided by an automated calculation, takes the customer-order data from the ERP and manually levels the demand to produce a similar number of parts of every product every day. This demand leveling is done once a week, reflecting new demand data and projecting a new average production for the upcoming weeks.
"We level demand over four weeks for our internal processes and our supply base, so that no one sees the spikes in the demand," Berthelin adds. In this way, the ERP provides the raw information about customer orders, but each plant builds its own level calculation of demand from that customer-driven data. The level demand, in turn, determines what the plant builds daily.