Half Right… No, Not Even

Believe it or not, it’s actually been a couple months since we’ve gone into battle with the false gods of the almighty algorithm.  Perhaps they’ve been smitten a bit.  But this week one of their brave princes dared to show his face.  Yes, someone trying again to convince us that ERP is compatible with lean. 

The competitive environment that both Manufacturers and Distributors alike have experienced in recent years in the era of Globalization, Currency Fluctuation, and Market Pressures has given rise to the business impetus to run a leaner operation to remain competitive.

That’s a helluva mouthful.  Even more obliquely verbose that we can be at times.

An ERP project is an ideal area to utilize lean concepts to further understand how this can be achieved, but we must first understand the basic principles of lean and how they relate to an ERP project implementation.

Oboy… here we go.  ERP and lean.  This should be interesting.

The Organization known as APICS (American Production Inventory Control Society) has defined Lean as “A Philosophy of Manufacturing based on planned elimination of waste and continuous improvement of productivity.”

APICS isn’t exactly the keeper of lean knowledge.  In fact they fought lean so hard that a group of enlightened individuals split from APICS and formed the Association for Manufacturing Excellence over 25 years ago.  Actually, APICS was so incensed with this new "Toyota Production System" that they excommunicated those guys in September of 1984!  A year ago we even bode farewell to APICS.

While they bill themselves as"The Association For Operations Management", in fact, they are still centered on MRP.  As manufacturing becomes leaner, MRP becomes less significant, and often harmful.  APICS has not been able to see that their MRP-centered product is steadily losing value in the eyes of their customers.  Repackaging it, relabeling it and redefining the "APICS brand" will not make MRP more relevant.

But let’s get back to the original article by one of the princes sent forth by the false gods.  This prince uses the APICS definition of lean: elimination of waste.  As we’ve mentioned time and time again, that’s only half right, which once again says something about the source of the definition and the prince that invokes it.

The other half is "respect for people."  But let’s move on to explore the half of lean that the prince is working with.

One of the core values of Lean Manufacturing is known as the “5S Method.”

Uh, no.  5S is not a value, it’s a tool.  One of many tools, and one that is completely useless and unsustainable if the "respect for people" pillar is not recognized.  But the prince goes on to attempt to correlate 5S itself with ERP.  Yes, really.  See for yourself:

• Sort – Use only parts of the ERP system which benefit the company
• Simplify – Use ERP to enable integrated business processes  i.e. inventory control
• Shine – Ensure that you work with accurate and timely data
• Standardize – Document and standardize, business processes
• Sustain – Business Processes executed by ERP executed on a consistent and timely basis

Huh?  Simplify to control inventory?  Perhaps someone needs to enlighten this prince as to how inventory, or the lack thereof, is used in a lean environment.  Business processes executed by ERP are "sustain?"  Yes, since ERP software makes it very difficult to create change, to improve.  You are beholdened to the methods and processes deemed best by a group of programmers far, far away from the factory floor.  Especially your factory floor.

The author… err prince… goes on to try to link ERP with direct and indirect labor control, inventory transactions, and the like.  You’ve seen this convolution before, so I won’t dwell on it.  The final statement pretty much sums it up.

As a result of lean ERP being used in the organization, inventory moves from work station to work station in a continuous flow through the plant—and as a result, return on investment is accomplished through the use of improvement in efficiencies and reduction in inventory investments.

And exactly why is ERP needed to achieve this?  Ever considered a white board?