Tuesday, December 9, 2008

Planning is the Key to Success to Implementing Lean

Lean is a philosophy that is based on continuous improvement, the simplification and standardization of business processes, and the elimination of all forms of waste throughout the organization. Implementing Lean techniques can help companies to improve their operational performance and customer responsiveness and drive positive results to the bottom line.

Companies that are new to implementing Lean often times start with taking small steps, sometimes as a trial to test the process. Once they realize the early benefits of using Lean techniques they get more aggressive with their strategy and expand the program throughout the organization. The basic steps to developing the Lean plan are:

  • Review and assess Lean readiness within the organization
  • Identify the readiness issues that must be addressed to make Lean successful
  • Develop aLean strategy and metrics that will be used to guide the Lean implementation
  • Analyze and prioritize improvement opportunities
  • Provide overall Lean education and training, including change management
  • Develop a plan of action for implementing the improvement opportunities

Engaging top management is vitally important to facilitate the adoption of Lean philosophies and technologies. In order to get and sustain buy in from top management, it is important to make them realize that adopting Lean tools and concepts will help assure the long term viability of the company.

Benefits of implementing a well planned Lean effort are:

  • Alignment of operations and corporate strategy
  • Clear enterprise-wide communication
  • Increased throughput on the shop floor and front office
  • Reduced costs by the elimination of wastes
  • Increased flexibility in satisfying changing customer demands

As the famous adage goes “it is easier said than done”, companies face challenges in implementing Lean concepts. Having a systemic approach to the implementation, incorporating education at all levels along the way and focusing on change management will help assure success in the adoption of Lean tools and concepts.

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Monday, December 1, 2008

Cost Control Becomes the Number One Pressure

Cost control has been cited by Aberdeen Research as the number one pressure impacting the ERP strategy within a manufacturing company. This phenomenon is particularly prevalent in process industries where cost control has gained a renewed focus in these economically hard times. As a result of their recent survey, the top four pressures were listed by Abredeen as:
  • Must reduce costs
  • Must improve customer response times
  • Must be easier to do business with
  • Need to manage growth expectations

With the emergence of cost control as the number one business driver this year (number two last year), the following were listed as the top cost issues:

  • Rising costs of raw materials
  • Rising energy costs’ impact on manufacturing operations
  • Rising energy costs’ impact on in/out bound transportation
  • Impact of poor quality
  • Proliferation of changeover costs

ERP systems are able to assist the organization in managing these costs with the integration and data availability that are inherent in most systems today. By properly aligning business processes and ERP functionality, manufacturers should be able to gain control of most of their significant costs. Along with the standard features of an ERP system, there are special enablers that exist in many systems that can prove to be very useful:

  • Advanced Planning and Scheduling
  • Inventory Optimization
  • Material Change Management
  • Event Management (triggers and alerts)
  • Manufacturing Execution System (MES)
  • Enterprise Asset Management
  • Specialized Inventory Management features: Lot Traceability, Shelf Life Management, Actual Costing, Co and By-Products, Compliance Reporting

Peak Enterprise Solutions is able to help clients redesign their business processes and utilize the tools of the ERP system to allow them to increase the value of their business.

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