Friday, September 6, 2013

Going Lean with an ERP

Chances are your company has already embarked on lean initiatives. Many companies have realized that waste is the opposite of value. Because of this they work to optimize in order to remain profitable and competitive. But what value can an ERP bring to your lean initiatives? First, let’s assess our lean practices.

How many of these rules do you follow?

1.       Do not over-purchase

2.       Do not over-produce

3.       Simplify processes and procedures

4.       Minimize wait-time

5.       Optimize human movement in moving material

6.       Measure and Improve continuously

What is your score on the practices above? 3 out of 6? Maybe more or maybe less? Did you know that an ERP system such as Dynamics AX can help you achieve the above practices right out of the box?

ERP systems are built with lean in mind, and can really aid in a manufacturer’s lean efforts.

What can an ERP do specifically?

Reduce waste: An ERP will increase your flow of information through its routings and workflows. The planning module will minimize inventory while making effective use of transportation and warehouse facilities. It will also eliminate waste or delays in the supply chain by becoming a link to your trading partners. This means that your warehouse will be able to capitalize on the available space provided by trade and logistics, while your supply chain eliminates excess inventory and shortages through supply chain management.

Increase your Business Intelligence: An ERP system contains documentation of your processes and procedures. It will record and implement any changes placed into the system. This will deliver the most up-to-date information while providing info on changes in relation to costs, lead-times, and efficiency. Built in Business Intelligence tools will monitor performance indicators and notify management of changes whether they are good or bad. BI tools will also allow for the analysis of data that, in turn, can reduce waste.

Increase Collaboration: Use the knowledge that resides in your sales people, representatives, distributors, agents and customers. AX in conjunction with MS Office provides electronic collaboration tools to make doing business easy. Trading partners can forecast accuracy; ensure quality service and timely delivery.

Are you the lean super star of your business? Are you leveraging the lean capabilities of your ERP software? Make sure your ERP system keeps with your lean practices.

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