Posted by : bpburnwal on Nov 10, 2003 - 02:48 AM General

Say "lean manufacturing" right now, and people listen. At the recent APICS show, a session titled Six Sigma Simplicity with Lean and ERP not only had a standing room-only crowd, but a few attendees--myself included--pulled up chairs in the hallway to catch this informative session. It's also the case that a survey of manufacturing executives that MSI recently conducted found lean was the No. 1 operating philosophy.
The basic reason for all the attention is simple. The stock market, and--to some extent--the economy, are making a comeback, but senior management is pressuring manufacturing executives to squeeze more costs from production operations. Manufacturing executives, having deployed material planning, supply chain planning, ERP, and a range of other systems over the years, are looking for ways to meet this mandate without deploying costly new systems. Meanwhile, China and outsourcing loom as enticing alternatives. In this climate, anything that promises a "leaner" enterprise is going to have appeal.

The aforementioned APICS session included many insights, but is noteworthy here for its overall take on lean. Rather than a pure "flow manufacturing" approach in which flow lines and mixed-model production replace orders and schedules, the session took a broader approach in which lean means the elimination of waste.

For most manufacturing executives today, this broader view of lean predominates. There is nothing wrong with this, of course. After all, who doesn't want to eliminate waste? Flow manufacturing purists would contend, however, that this broader view diverts attention from the potential of flow manufacturing. Rather than trying to make incremental improvements using orders and ERP, manufacturers would be better off devising flow lines and pacing work to actual demand, the purists would say. Trouble is, not every manufacturing environment is well suited to flow, and then there is the issue of whether flow actually drives inventory out of an entire supply chain, or simply pushes off inventory to suppliers.

My intent here isn't to debunk flow. Companies that achieve true demand flow can make huge gains, as is well documented. But I do believe it's time to accept that a broader approach to lean is valid. Much can be done within the parameters of constraints-based planning and various "to-order" modes of manufacturing to be more demand-driven.

The ERP vendors, meanwhile, are showing keener interest in flow. Vendors are acquiring products and establishing organizations to address the interest in lean, as reported in this month's news section. Whether the vendors are moving quite fast enough is an issue that AMR Research's David Caruso weighs in on in his column (page 40). Caruso brings up some valid points about whether the ERP market as a whole can react quickly enough to develop special-purpose solutions for lean. However, there is considerable interest in a broader approach to lean, using existing enterprise systems, and driven by lean practices and methodologies.

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