ERP for Lean Manufacturing

A manufacturer must diligently combat waste at every step of the value chain. When you let errors fall through the cracks or fail to deliver orders in a timely manner, you’re letting competitors get ahead. To stop slipping, you need to incorporate lean manufacturing methodologies into your operations.  

But don’t expect to become a lean manufacturer using outdated technology. A modern ERP solution is the key to unlocking greater productivity. We’ll explain how to leverage ERP software to become a lean manufacturer, but first, let’s establish definitions of both lean manufacturing and ERP.  

What is Lean Manufacturing?

Lean manufacturing is a method developed by Toyota to cut production costs and maximize efficiency. The goal of lean manufacturing is to eradicate waste, or anything that doesn’t add value to the end product. More specifically, lean methodologies work to eliminate eight forms of waste, or DOWNTIME: 

Defects: Errors in products or services resulting from poor quality control or misunderstood customer needs 

Overproduction: Manufacturing too many products that aren’t ready for sale 

Waiting: Delays that prevent employees from proceeding with supply chain operations 

Non-Utilized Talent: Employees who aren’t appropriate for or fully plugged into a role or process 

Transportation: Unnecessary resources delegated to move materials and products  

Inventory: Unutilized materials and products that are sitting in warehouses 

Motion: Insufficient workplace layout or machinery that causes employees to spend too much time moving around 

Extra-Processing: Exerting more time and effort than needed to deliver valuable products and services 

One method of maintaining lean manufacturing principles is pull production. In pull production, nothing is made until a customer has placed an order. To execute pull production, Toyota created a Kanban scheduling system to help employees on the shop floor visualize each stage of the manufacturing process, streamlining workflows from order to delivery.  

In short, lean principles help businesses become more cost-effective and productive by minimizing waste as much as possible.  

What is ERP?

Enterprise resource planning software, or ERP, consists of a broad array of interconnected business applications designed to manage back-end processes, such as finances and production scheduling. Without an ERP system, organizations often experience delays and errors as they attempt to manage data with Excel spreadsheets or sticky notes. In other cases, businesses develop information silos as each department utilizes a separate system. Maintaining disjointed software instances requires manual data entry throughout several platforms.  

ERP eradicates these issues by serving as a single system of record (SOR) for back offices. By creating a central hub for inventory data, quality metrics, financial reporting and other information, ERP facilitates transparency and efficiency. Additionally, the software automates processes, triggering approvals and workflows to streamline your supply chain. Dashboards with built-in analytics and business intelligence (BI) also improve operations by helping users identify roadblocks and new opportunities for growth. 

Comprehensive features, extensive insights and process automation make ERP an essential tool for modern enterprise success. 

Bringing ERP and Lean Methods Together

It’s not hard to connect the dots between ERP and lean manufacturing. ERP software empowers users to minimize downtime by providing visibility, so businesses can locate sources of waste. As a central hub for your information, the solution also upholds data integrity. No more time wasted on manual data entries that often result in errors.  

IT teams will enjoy greater productivity as well. Rather than worry about performing maintenance and upgrades on multiple enterprise systems, they can focus their energy on one solution. Furthermore, by automating processes, ERP speeds up lead times, helping you deliver orders on schedule. 

The very nature of ERP is conducive to weaning out waste, but to fully embrace lean manufacturing tactics, there are some specific functions that you should be on the lookout for. Epicor distinguishes itself from other ERP vendors by including features specially designed for lean production, such as Kanban tools. 

Epicor’s Kanban functionality provides all cells and suppliers with up-to-date visibility of future demand. Parts can be flagged to be moved or manufactured at the part, warehouse or individual bin or cell location level. Automated material flows authorize supplying cells to produce a predefined quantity of an item that is being pulled. Real-time purchase Kanban automates material replenishment. Additionally, lean metrics evaluate production activity, so you can constantly keep tabs on your manufacturing performance.  

Wrap Up

With Epicor ERP, users can apply lean manufacturing techniques throughout their enterprise. ERP effectively targets multiple forms of waste, empowering businesses to maximize their efficiency and add value to their products and services. 

After over 20 years of providing manufacturing and distribution solutions, Datix understands the importance of leveraging every opportunity to cut costs and enhance productivity. Our consultants have earned Epicor Platinum Partner status by executing dynamic ERP solutions from start to finish to help each of our clients optimize their operations. We’ve also distinguished ourselves as experts in CRM, eCommerce and integrations, making us a one-stop shop for software solutions and services.  

Make downtime a thing of the past. Contact Datix today to become a lean enterprise!  

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