E-Commentary -- ERP Learning To Be Lean

Four years ago I wrote an article in these pages called "Lean vs. ERP." It chronicled how many manufacturers were finding enterprise resource planning systems to be a hindrance, not a helper, when it came to their lean manufacturing efforts. Since then, a number of software firms have jumped on the lean bandwagon, offering lean or "flow manufacturing" modules that support the principles of lean -- presumably without detracting from the goals of simplification and elimination of waste in manufacturing processes. A basic rub between the two, lean and ERP, was that the former had as one of its goals the tying of production levels to customer demand, while the latter bases production on sales forecasts. Also, ERP was top-down, while lean was bottom-up. This set up a classic management verses plant-floor disconnect. The result was that lean and ERP lived an unhappy coexistence, sort of the way the zebras share a wall with the lions at the zoo. Sure, there was communication, but it wasn't always the friendly kind. Lean also emphasizes setting up the production process in the most efficient manner from the start and then continually finding ways to make it more streamlined and waste-free. By contrast, ERP emphasizes planning. Lean wants to get rid of unnecessary movement of workers, materials and parts. ERP wants to track everything, so that customers can know exactly where their orders are on the plant floor. No wonder there was such friction. Lean is focused on activities on the plant floor, while ERP concentrates on data. Lean proponents recoiled in horror at the specter of scores of plant operators taking time out of their work processes to wave barcode wands at components as they passed their stations. Talk about wasted time and movement! In recent years, though, ERP software firms got lean religion. Many are trying their best to find ways to make their software responsive to lean needs and supportive of lean practices. "Several ERP vendors have created 'flow' manufacturing modules," says Michael Burkett, research director at AMR Research in Boston. He cites American Software, SAP AG, Oracle Corp., PeopleSoft Inc., Cincom and Lilly Software as companies that are offering packages that support lean principles. "Some vendors are starting to specialize in flow manufacturing." Oracle's Flow Manufacturing, for instance, helps support lean in several areas, according to Richard Rodgers, director of product management for Oracle's manufacturing group. "It's useful for demand planning, for designing facilities, for sequencing and for signaling of kanbans to suppliers," he says. "There's quite a bit of functionality in it to support these business practices." One of the key benefits of these software packages, AMR's Burkett says, is that "they give you better reporting and a lot of analytical capability to help you improve the line." He says the most helpful software is that which can "put information in the hands of people doing the work." Another advantage of software supporting lean manufacturing is its simulation capability. "Simulation of the factory is a big benefit," Burkett says. "You want to design the manufacturing process and lay out the work cells and work stations in the optimum fashion." Both Teknomatix and Dassault Systemes offer software to simulate production lines to achieve the greatest efficiency and least waste. Both packages are used heavily by the aerospace and automotive industries. Hey, no one expects zebras and lions to live harmoniously in the same cage. But lean and ERP may well end up working together to improve the manufacturing enterprise. Doug Bartholomew is a former IndustryWeek Senior Technology Editor. He is based in San Francisco.