LEAN Manufacturing is a powerful approach used by manufacturing companies to drastically improve manufacturing processes. The same approach is yielding business benefits outside of manufacturing; such as in LEAN Logistics.

Manufacturing was also the original spawning ground of MRP and MRP II which later evolved into the now ubiquitous ERP (Enterprise Resource Planning) that we find in virtually every type of corporate entity.

In the business world of 2007, it is appropriate to ask how LEAN and ERP interact – if at all – and specifically whether they are mutually supportive, mutually exclusive or independent concepts altogether.

The whitepaper concludes that some LEAN initiatives can be hugely strengthened with a synergistic ERP implementation and vice versa, whereas in other cases the two efforts should really be viewed as separate initiatives and managed independently from each other. This is, however, not an open ended “it depends on what you want” answer; we conclude that specific LEAN initiatives will eventually fail without considerable attention to specific ERP aspects but that other specific LEAN initiatives and specific ERP functionality have little in common.

This conclusion is based on the key point of departure that LEAN is essentially a philosophy that is applied to improve the way processes work but that nowadays those processes in business rely on systems to support the actual operations. In short, LEAN addresses how processes should work and ERP makes sure the processes work consistently.

It also works the other way round: Systems that operate without embedding long-term improvements essentially miss the point. A frequent problem with ERP implementations is that the question “What are we trying to achieve?” is met with only vague answers. Thus it concludes that some specific ERP implementations require the guiding strategy of specific LEAN principles to fulfil their business improvement objectives.

Thus LEAN and ERP can and should be mutually supportive in some situations but there are also many combinations of LEAN initiatives and ERP implementations where the connections are tenuous and attempts to put a single “umbrella” over them are inappropriate.

To put structure to these conclusions the white paper documents fourteen methods used in LEAN implementations and summarised the functionality typically found in modern ERP systems into nine major components. Our conclusion is that the interaction between LEAN and ERP takes place at the intersection points of the resulting “LEAN-ERP” matrix. The whitepaper presents a table which displays an “x” where we concluded that LEAN initiatives and ERP should be closely integrated and blanks where the authors believe they should be considered independent endeavours.

To download this whitepaper, click here
http://www.downloads.syspro.com.au/ar.cfm?ad_id=ad028  

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