Lean Manufacturing Principles and ERP System Implementation
The concept that aims to improve manufacturing practices.
Lean Manufacturing, previously known as The Toyota Way, is a concept that was previously developed solely to improve manufacturing practices. “Doing more and providing value with less human effort, less equipment, less time and less space” is what Lean Manufacturing aims to achieve. However, due to the world’s rapid and constant change in trends and needs, Lean Manufacturing soon become a concept that is commonly practiced by many other industries as well. Lean Manufacturing encourages the idea of providing value to customers through continuous improvement while keeping the costs and wastes incurred low, which is what businesses have been trying to achieve all along. Through effective adoption of Lean Manufacturing, businesses may find themselves reaping the benefits associated with the concept such as lowered wastes and costs, and increased profits and revenue. Businesses that intend to adopt and implement Lean Manufacturing will first have to understand the five principles of Lean Manufacturing.
The 5 Principles of Lean Manufacturing
Value Stream Mapping
Defining Value - The first principle of Lean Manufacturing is defining value. When we see the word “value” in Lean Manufacturing, it is essential to first know what it means from the perspective of Lean Manufacturing. Value, in Lean Manufacturing, is what businesses are able to offer to their customers and something that customers are willing to pay for whether it be a product or service. Regardless of which business industry you are in, it is of utmost importance for you to first identify what your target customer needs and want.
Value Stream Mapping - The second principle of Lean Manufacturing is value stream mapping. After defining the values of your business, next is to identify and map out the value stream. A value stream map is a visual tool that displays the critical processes that a business should follow, so as to ensure the defined values can be delivered to the customers effectively. Any processes or actions that do not contribute to providing values will be considered to be wastes and thus should be eliminated from the value stream. Waste that is identified can be categorized as no value-added but necessary, and no value-added and unnecessary.
Creating Flow - The third principle of Lean Manufacturing is creating flow. After coming up with a value stream map, businesses should then focus on ensuring the processes are able to be carried out smoothly. Delays and interruptions should be avoided as they will only bring more losses to the business.
Establishing Pull - The fourth principle of Lean Manufacturing is establishing pull. Typically, traditional businesses use a push system, whereby materials will be purchased and stored in the inventory first, which then they will be pushed to undergo manufacturing processes even if there are no sales orders created. The push system often creates a huge amount of work-in-progress (WIP) and stocks, which are considered losses. With the pull system, businesses will only start purchasing materials only when there are products needed to be manufactured due to confirmed sales orders. The pull system helps businesses reduce the amounts of losses through the reduction of WIP and stocks amount.
Pursuing Perfection - The fifth and last principle of Lean Manufacturing is pursuing perfection. Of course, businesses will never be able to reach perfection, but it is important to always seek perfection through continuous improvements, which is the main concept of Lean Manufacturing. In order to pursue perfection, businesses must first achieve the first four principles of Lean Manufacturing.
There are many ways and methods in adopting Lean Manufacturing. However, one of the most effective ways of achieving Lean Manufacturing is through the implementation of an ERP system. ERP system is a business management system that does a great job in utilizing technology so as to ensure business processes are integrated and automated. An ERP system encourages businesses to get their work done smoothly while reducing costs, which clearly fits the concept of Lean Manufacturing. If you are uncertain about how ERP system implementation is able to help your business achieve Lean Manufacturing, feel free to reach out to our ERP consultants. With our expertise and knowledge, we will be always ready to serve you, and your business.