Industrial, Machinery Component Manufacturers Use ERP and Lean To Get Results

Dec. 10, 2007
Inventory reduction, better cycle times and on-time shipments

Aberdeen found that industrial equipment and machinery companies that combine Lean manufacturing with ERP produce significantly more cost reductions and schedule improvements. Best-in-Class make judicious use of selected Lean methodologies and distinguish themselves by using 24% more modules and functionality available in their ERP systems.

Findings in the report concluded that:

  • Best-in-Class achieve 96% inventory accuracy, manufacturing schedule compliance, and complete and on-time shipments
  • Best-in-Class have 120% to 320% more reductions in cycle times measuring bid preparation, manufacturing and order to shipment
  • Best-in-Class produce seven times (733%) more reductions in inventory levels than Laggards
  • Among those going Lean, Best-in-Class are 82% more likely to do Value Stream Mapping to remove waste from both manufacturing and non-manufacturing processes.
  • Seventy-four percent (74%) of Best-in-Class implement work cell manufacturing and 61% employ Kaizen (continuous improvement teams) and adopt the 5Ss (sort, set in order, shine, standardize and sustain).

"In the manufacture of industrial equipment and machinery, it is critical to provide visibility across the enterprise to all phases of the project or contract from the initial bid preparation process to the submission of the proposal, as well as the management of the processes involved from the award of a contract, project, or order, to final delivery," said Cindy Jutras, vice president and Group Director, Aberdeen. "For these companies, the manufacturing processes often represent the lion's share of both time and effort, but also must be well-coordinated with all other front and back office functions."

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