Here is a case study of a company that is using both Lean and ERP to support their journey of continuous improvement.
In 2008, the management team decided to start two initiatives: Lean education for the entire organization and the transformation of the information system to a new ERP system. Many people asked how can you do both at the same time? The answer: They are compatible. They both are all about improving processes and decision making capability.
The company brought in consultants to facilitate both initiatives. Ultra Consultants were retained to give leadership to the ERP Project Management initiative, and a Lean consultant started Lean 101 education.
As both initiatives progressed, the team begin to attack the most cumbersome processes. Identified as a highly wasteful process in the ERP study, the team looked at the quote to shipment process. After developing the as is process map, they were able to identify significant waste. The team redesigned and implemented the new process. As a result of the change they are saving over 3,000 man hours per year. By simplifying the process they were able to make the people involved in the entire process interchangeable.
The company is not a large organization but they were able to use the same key personnel for both initiatives. Management believed that the lower volumes created by the slow economy was a perfect time to make productivity improvements.
The second lean project included a re-design of a major assembly line. They re-positioned the line, adding some of the sub assemblies which will allow them to eliminate an entire operation. They are changing the other sub assemblies to feeder lines using Kanban flow.
The team has completed its selection of the new ERP system and has started the ERP implementation. The next Lean project will use the capabilities of the new system to re-design the RMA process.
This is another example of Lean and ERP working together on a path of continuous improvement.