The rise of ERP (enterprise resource planning) back office management systems and the simultaneous emergence of lean manufacturing principles have both provided a powerful boost to manufacturing output in the late 20th and early 21 centuries. But in several ways, the benefits of one tend to conflict with the requirements of the other. Are there methods manufacturing firms can adopt in order to overcome this conflict and make the best of both?
How Does ERP Conflict With Lean Manufacturing?
ERP software platforms were originally developed in the late 1980s and early 1990s in order to provide manufacturers with a way to coordinate complex ordering and processing activities on shop floors. Before these systems were developed and implemented, most firms ran their departments on separate software platforms, which prevented teams and departments from unifying their operations and sharing data access. ERP systems eliminated this problem and effectively streamlined production, reduced error rates, and greatly improved overall productivity.
But much of this improved productivity came from data sharing and needs-forecasting. For example, marketing and sales could now share data regarding customer demand, and this data could easily be accessed by product development teams. So changes to products could be made based on future sales predictions.
Lean manufacturing, which has also made strong inroads into modern manufacturing processes, is a philosophy based on needs-based ordering, production and inventory management. When lean principles are in effect, supply happens only in response to demand, and raw materials and replacement parts are ordered only when required by moment-to-moment sales data. This minimalist approach effectively cuts waste and cost, but it doesn’t allow ordering systems to anticipate future needs.
How Lean and ERP Can Overlap
Some manufacturing experts refer to the conflict between lean and ERP as “push versus pull” manufacturing. But are there ways to combine the benefits of both systems without unnecessary orders or critical supply problems?
Many manufacturers are adopting new software systems called “middleware” to bridge the gaps between lean and ERP. These systems work by separating and channeling the unique strengths of each model. With middleware in place, ERP utility is confined to record keeping purposes only, monitoring materials used and orders processed. While ERP’s planning and coordinating functions are curtailed, lean manufacturing can be applied on the shop floor, controlling the flow of operations and signaling requests to suppliers.
Can middleware help your manufacturing firm bridge the conflicts between ERP and lean? For answers to questions like these, contact the Little Rock staffing and small business strategy experts at CSS. We can show you ways to cut your expenses, increase your productivity, and drive your business forward.