ERP technology: The key to lean manufacturing operations

The lean methodology is well on its way to becoming the industry-standard approach to mass production and replication.

In the years following the Second World War, Japanese industrialists Kiichiro Toyoda and Taiichi Ohno of Toyota Motors looked on from afar as Henry Ford's once dominant automotive empire wilted beneath the weight of increasingly complex production machinery, according to the Lean Enterprise Institute. The American innovator had invested in more powerful equipment and expansive workflows in an effort to cut costs. He had ultimately succeeded but sacrificed efficiency along the way. Throughput times and inventory were building. Worse yet, the newer shop-floor assets offered little flexibility from a fabrication perspective, which presented a very real problem for Ford, who was now navigating a maturing market populated by consumers looking for variety. The novelty of the barebones automobile had worn off – buyers wanted the bells and whistles.

Toyoda and Ohno saw an immense opportunity. They reasoned that by designing processes that prioritized workflow efficiency and organization over mechanical strength, they could roll out new automobiles at an accelerated pace while maintaining high quality standards and facilitating the operational scalability needed to succeed in the modern marketplace. This strategy, later deemed lean manufacturing, transformed Toyota into the one of the largest, most successful corporations in the world. Today, the organization owns more than 15 percent of the automotive market share, putting it second only to its American rival General Motors, The Wall Street Journal reported.

Other follow suit

According to Manufacturing Global, numerous firms have followed in the footsteps of Toyota, including Nike, John Deere and, the inspiration for Toyoda's and Ohno's efforts, Ford. In 2014, analysts for the Aberdeen Group surveyed more than 170 industrial leaders across multiple sectors and found that 60 percent had discrete or documented lean processes in place.

The lean methodology is well on its way to becoming the industry-standard approach to mass production and replication. Businesses on the outside looking in should start developing adoption plans and implement the backend technology needed to support the scaled-down, versatile workflows that characterize this strategy. Enterprise resource planning technology should be at the top of every implementer's list, as these platforms are key to effective lean manufacturing operations. How?

The lean manufacturing methodology promotes efficiency above all else.
The lean manufacturing methodology promotes efficiency above all else. 

ERPs facilitate waste reduction
Waste is the ultimate enemy of lean manufacturing operations. ERP solutions help reduce misspent resources through data-based forecasting, according to the consulting group WIPFLi. Shop floor personnel can use production insights to right-size their resource allocations based on demand, reducing the likelihood of costly waste. Businesses can use the same methodology when it comes to staffing by equipping managers with ERP access and allowing them to assign shifts with pinpoint precision.

ERPs support efficiency
Traditional paper-based processes do not jibe with lean manufacturing strategies, which are designed to emphasize efficiency at all levels of the operation. ERP solutions give organizations the ability to digitize outmoded workflows and embrace more nimble administrative methods, Industry Week reported. With such web-based automated processes in place, production and shipping teams can quickly and easily access customer orders, and ultimately get quality products out the door under deadline.

ERPs promote transparency
Of all the core ideas that define the lean manufacturing methodology, few carry as much weight as the notion of continual improvement. True lean adherents implement expansive workflow refinement programs that run non-stop.

ERP platforms can provide the framework for such initiatives via transparency-enabling data-mining features. Shop floor stakeholders can easily log into ERP portals to view production data and look for areas that require remediation. This capability alone makes the technology a great tool for any manufacturer considering embracing the innovative ideas that Toyoda and Ohno formulated decades ago.

Is your manufacturing firm interested in making the move to lean processes? Connect with Accent Software. As a Microsoft Gold Partner, we offer vendor-vetted Dynamics 365 implementation services. Contact us today to learn more.