Best-in-Class manufacturers know that successful implementation of lean manufacturing relies heavily on the right IT solutions.
Recent research by Aberdeen Group on the interaction between lean and IT revealed that manufacturers are twice as likely to cut costs by adopting lean scheduling software applications and integrating them with enterprise resource planning (ERP) systems.
The outcome of such an approach has been shown to provide genuine supply chain visibility — a tool that empowers lean decision makers.
According to the survey, best-in-class decision-makers in a company need to know a range of factors, referred to as ‘actionable data’. These include the need to know the current state of the production plan or schedule, the state of execution against the plan, customer demand and the status of work in progress.
The research suggested that these decision-makers can measure the benefits of lean manufacturing implementation by looking at delivery time and how well demand is connected to execution. They can also consider how improvements in scrap levels affect the level of quality.
Another measure is throughput time improvement, which tells how well execution matches the schedule. Other benefits to look at are the reduction in manufacturing cycle time and how this improves the process.
Aberdeen Group surveyed companies in North America, Europe and Asia/Pacific in the automotive, aerospace, industrial equipment, metals and process sectors. Its report lists the top 20 per cent best-in-class implementers of lean, and compiles a list of recommendations for others wanting to maximise the effectiveness of a lean approach.
The first recommendation is to standardise lean scheduling and practices across the organisation, based on the findings of a continuous improvement team.
Second, decision-makers must be allowed to make effective judgments. Lean software applications are to be adopted and tightly integrated with ERP.
Finally, there is a real need to regularly measure on-time delivery, work in progress and scrap.
There are various solutions available. Preactor International, for example, has been delivering advanced planning scheduling and finite capacity scheduling solutions to many manufacturers running lean initiatives.
So as Aberdeen’s research shows, lean scheduling is far from being a hindrance to lean manufacturing. It not only facilitates best-in-class manufacturing, but also provides a link between lean and the need for an interconnected IT approach to manufacturing.
Moreover, the valuable role that lean scheduling plays and its close link with ERP enables manufacturers to be lean as well as retaining complete global visibility of the manufacturing process.
Multi-ERP system developer Infor offers pre-built integration between its Optiva PLM solution and Infor ERP LX (formerly SSA BPCS) for mid to large-size multi-mode manufacturers.
The company makes the point that coupling LX with Optiva eliminates the need for costly custom coding for process manufacturers. It also says that users will then get streamlined design, linked straight into ERP, helping to drive product innovation while ensuring regulatory compliance across facilities and regions.
Behind the scenes, it also means better change management and the ability to scale up production of new formulas, materials and packaging.
By providing this integration, Infor delivers a combination that allows manufacturers to streamline the processes involved in bringing new products online, while reducing overall costs and time to market. It also enables customers to quickly respond to market fluctuations and consumer demand.
Most importantly, users will get an integrated process covering quality and compliance, right across departments and locations.
Infor cites a company running a cost-reduction project and requiring a new raw material. The system will help it source a low-cost option and ensure the reformulation meets regulatory requirements before putting the product into production.
Also, because this work takes place in R&D, companies can develop products without interfering with standard operations which, Infor insists, will improve first-batch success rates, reduce downtime and cut costs associated with manual interfaces.
Integration was a key consideration for high-performance racing engine manufacturer Ilmor Engineering. The Northants company currently has over 85 IRL engines in production, each of which requires a complete component ‘life’ history unique to that engine — which adds up to 3,000 components per engine.
In addition, there are two distinct yet interconnected functional areas within Ilmor — engineering and design, and manufacturing — each with its own challenges, including using the bill of materials in a different way.
The key questions from the engineering division are: ‘What part is it?’ and ‘Is there one in the stores?’ The manufacturing division’s biggest challenge is supplying the demand from engineering.
On one hand it’s unacceptable to be unable to supply a part when a customer requires it. On the other, given the continual nature of change, Ilmor cannot over-order a particular item because it would then be left with high levels of redundant stock.
Ilmor’s extensive customising of its old in-house system had already given it an insight into what it required from a business system, so the company quickly identified three solutions which claimed to handle the complex manufacturing requirements as well as providing solid accounting functionality. However, on closer inspection only Exel’s EFACS ERP software measured up.
The first significant benefit came in the first month in accounts. For the first time, the accountant could set up a system with the codes that he actually wanted, which made sense to the company.
The balance sheet was completely accurate and unlike the previous system with its two-week wait for vital information, this was now available instantly and showed real-time visibility of Ilmor’s financial position.
The company has already implemented shop floor data capture via barcode readers that automatically update EFACS with each completed process step.
The next main area of development is to put to use the full power of the software’s planning and scheduling functionality to provide more accurate visibility and utilisation of the company’s machining capacity.
Choosing the correct IT solutions is crucial to the successful implementation of lean manufacturing. Charles Clarke explains