Where lean manufacturing methodology meets supply chain management

Lean manufacturing is a technology as well as a philosophy. Read how manufacturers use software to apply lean methodology to supply chains to increase visibility and efficiency.

Some experts say that manufacturing firms can attain the benefits of lean manufacturing production without deploying

lean software. True lean manufacturing purists even argue that the use of software can even hamper the main goal of lean, which is to be as efficient as possible in every aspect of the enterprise, from production to operations, because it takes focus off the factory floor.

Decades after the introduction of lean concepts to manufacturing, experts still disagree over what exactly it means to be lean. We can leave this philosophical debate to the manufacturing efficiency gurus, but what is clear is this: If you have not achieved the reduced inventory, lowered costs and shortened cycle times you expected from lean, you will have to use software to attain those objectives.

Without additional software modules (such as forecasting, demand planning, or electronic kanban), a basic materials resource planning (MRP) or enterprise resource planning (ERP) system will not be enough to drive lean benefits.

"Lean focuses on execution, but you cannot get the most out of execution unless you do a better job of planning," said Anil Gupta, vice president of marketing at Bristlecone Inc., a supply chain consulting firm in Milpitas, Calif.

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You can perfect your shop floor execution according to lean principles, but if you're not making the right item at the right time, you are not going to win in the market. Execution alone is not enough. Demand planning and forecasting are areas of focus when applying technology to aid your lean initiative.

Linking lean manufacturing technology and methodology

According to a recent Aberdeen Group study, Lean manufacturing: Five tips for reducing waste in the supply chain, manufacturers that connect technology and lean methodology gain improved operational performance. The greatest lean benefits -- lower inventory costs and reduced lead times -- are obtainable only if you use software to extend visibility throughout your supply chain, according to Nari Viswanathan, Aberdeen vice president and principal supply chain analyst.

"The smaller companies are less likely to connect lean with technology, but that is beginning to change," he said. Although small and midsized businesses (SMBs) may not have the budgets of their large enterprise counterparts, they have an equal need for supply chain visibility and better forecasting.

E-kanban systems make for smoother supply chains

Beyond planning solutions, electronic kanban (e-kanban) software can be an excellent place to start. A core lean practice, kanban is a visual management system, often based on cards or bins used on the factory floor, which replenishes parts only on an as-needed basis.

"When you are operating multiple production lines and facilities, a purely visual system can break down," Viswanathan said. An e-kanban solution from a vendor such as Ultriva Inc. or Synchrono Inc. or a consulting firm such as Professional Implementation Consulting Services Inc. (PICS), offers modeling and simulation of the factory floor, helping to find bottlenecks, predicting variability, and enabling a closer connection between demand and production. The solutions often offer order management integration to the factory floor, giving visibility into actual, rather than theoretical, constraints to improve quoting accuracy and reduce the need for safety stocks.

Lean methodology in high-volume production environment

Plastic Components Inc. (PCI), a Germantown, Wis., maker of PVC accessories, uses supply chain management modules ranging from scheduling and planning to materials handling and e-kanban from its ERP vendor, IQMS. The e-kanban function is part of the vendor's EnterpriseIQ ERP solution.

PCI operates its high-volume, high-variability production environment according to lean concepts. The company runs especially lean in terms of personnel: Its press-to-staff ratio is one to one, with 42 presses and 42 employees total. "We do benchmarking with other companies in our industry, and the usual people-to-press ratio is eight to one," said Teresa Schell, director of marketing.

Operations manager Bob Allcox attributes PCI's success to the software it uses. "IQMS [EnterpriseIQ] is the backbone of our facility," he said. "We use many of the modules – [the software] is running through every aspect of our business. We have always focused on high automation and low overhead. That has kept us competitive."

IQMS vice president of sales Glenn Nowak acknowledges that not all SMB manufacturers are keen to link lean and technology. "They don't want their managers staring at the terminals as opposed to walking around the shop floor," Nowak said. Manufacturers are understandably reluctant, especially now, to buy a lot of software modules they may not end up using right away -- or ever.

The key is to start small, at a common pain point such as bad forecasts. Applying software to that scenario can make all the difference to your lean efforts. "Our customers have to drive every nickel out of their production processes," Nowak said. "And our modules help them do that."

About the author: A freelance writer located in Waban, Mass., Lauren Gibbons Paul writes frequently about lean manufacturing. She can be reached at lauren.paul@comcast.net.

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