E-Commentary -- Lean Efforts Get Software Assist

Contrary to popular belief among companies that have embraced lean manufacturing, at last there is some software that can help. As I wrote in this space in July, some ERP software firms in recent years have added lean modules. Unfortunately, none were smitten enough to support lean manufacturing tenets from the ground up. "The ERP systems don't do a good job of the nitty-gritty of lean," observes Jim Johnson, vice president and CIO at Guide Corp., a leading manufacturer of automotive lighting systems headquartered in Pendleton, Ind. "They'll do some kanban tracking, but they don't have enough depth in ERP at the lean level." Lean guru Tim Costello, a member of the board of governors of the Shingo Prize, considered the lean community's equivalent of the Malcolm Baldrige Award, adds, "The software companies have tried to deal with lean with illusion, not substance." For this reason, many manufacturers have chosen instead to run their lean-based factories' scheduling and inventory control using Microsoft Excel spreadsheets. The trouble with this approach is that the spreadsheet data, for the most part, stands alone, unconnected to the company's ERP system, or at best, connected in some less-than-integrated manner. Yet the company's sales people are dependent on the ERP's inaccurate data when they want to place orders, check production schedules and figure delivery times, etc. "We were prepared to write the software ourselves, because I didn't think anybody could do it," Johnson says. "Then I stumbled across Factory Logic on the Internet." Guide, which uses QAD for its ERP system, has been using Factory Logic's Streamline at plants in Louisiana and Mexico -- with a combined output of about $200 million in sales -- for two years. "We're really controlling the plant floor with Factory Logic," Johnson says. "Our schedulers use it to monitor our kanbans all the time and also to create an hourly schedule for the plant." There are no screens or monitors on the plant floor, but production schedules are posted hourly. For sure, the big reason Guide turned to software for help with lean was complexity. The company supplies nearly 50 General Motors Corp. plants with headlights and other parts and makes more than 1,000 different parts, including aftermarket products. Says Johnson, "What really drove us this way was our volumes -- we needed a system to control the thousands of kanbans that we might have active at any one time." In other words, lean is great when you're only building a handful of different products with a modicum of parts, for a few customers. But try managing hundreds or thousands of different parts, components and finished products, and the sheer complexity of it all screams out for technological help. "Streamline can look at every part and let you know every day the optimal inventory level you need," says Costello, who also sits on Factory Logic's board. The Streamline data coming from the lean activity on the plant floor is so good, in fact, that Guide is using it to override the data in the ERP system. "You can feed the lean schedule back into the MRP [ERP] system, in effect, to override what ERP says," Johnson explains. That data, in turn, is used to drive the plants' material requirements out to suppliers. "It's better than doing it with ERP," Johnson adds. Doug Bartholomew is a former IndustryWeek Senior Technology Editor. He is based in San Francisco.