Getting It Right: Unifying Manufacturers and the Best ERP System

Manufacturing Insights Blog

In this blog post series, Solution Engineer Ed Sosnowski explores lean/continuous improvement (CI) practices with ERP.

Ask yourself this question:  Is your ERP system helping drive improvement in your organization – or just creating more waste?

Too many times, the answer is the latter, leaving many ERP providers asking for your patience and forgiveness as they try to get it right for your particular company’s needs.

Why is this the case?

Many continuous improvement (CI) professionals often feel they have to “trust but verify” the data that is available from their ERP – because in almost all cases, the data is unreliable and inaccurate due to the fact that it isn’t real-time. CI folks have thus learned to rely on visual tools to make what is happening in a process very apparent in order to bring abnormalities to the surface for everyone to see – tools that provide relevantreal-timeactionable data.

Take a pace board, or hour-to-hour board, for example. Using a simple whiteboard, each hour an operator writes down her actual production versus the standard. In the right hand column, she would write down the biggest downtime issues that occurred. Her supervisor visits the hour-to-hour board a certain number of times each hour to check progress, and to work with the team if there is significant variance from standard. Simple team-based problem-solving like the “five why’s” can be used to establish the root cause and determine an immediate response as well as permanent corrective action.

Meanwhile, as part of an engineer’s standard work, he may be held responsible for visiting the same board, reviewing downtime issues and resolving permanent corrective actions. This act of visiting the floor brings them to the place where the action happens and also gets them to interact with operators to obtain clues they would not otherwise obtain sitting behind a desk.

You can see the value of this very inexpensive tool…but sadly, this is the exact opposite of what manufacturers get with most ERP systems. Instead, they’re saddled with systems that are not user friendly (particularly for the people who are adding value to the parts they make) and inventory levels that are not real-time and even backflushed at the end of a shift or late at night, or worst of all, ones that allow for negative inventory levels.

Scheduling is not real-time, there is a complete lack of visual cues, downtime/efficiency reports are days old – and the final insult, an ERP vendor pricing structure based on the number of user IDs, which encourages people not to use the system and spawns disparate Excel and Access databases.

But fear not – there really is a better way.

Manually solving problems as in the hour-to-hour board example can be effective if engrained into the culture of daily standardized work, but it doesn’t establish long-term trends and read across problems to other areas within the plant (or other facilities, for that matter). Likewise, there are shortcomings from trying to solve problems with computerized data alone. Manufacturing is complex and requires the best of our people and our technology – and only when we marry the two approaches can we experience serious, exponential improvement.

I challenge you this week to think about the hour-by-hour chart example. Is your approach to ERP marrying disciplined standardized processes with technology?  If not, challenge your CI experts on how you can to get the value that was promised out of your ERP system – and most importantly, drive value to your customer.