Lean mindset companies define their work as driving value to customers. Yet many digital initiatives such as ERP implementations push work to people with business software dictating what to do and when to do it – restricting problem solving to the system instead of the people.
Todays global ERP solutions offer robust, fully-functional supply chain management capabilities. And they need to. Customers, both consumer and commercial, expect a lot from a business and its ability to supply materials and products. The demand side of the supply chain has become, well, more demanding. Perhaps its the fact that customers have product and company information available at all times via social networks and mobile technology. Or it could be the speed at which consumers receive their items from online retailers, who have made same-day delivery routine. The consumers in these B2C relationships start wondering why they cant have similar response in their B2B transactions at work.
Everyone knows that an organization has reporting requirements within their accounting departments, but an organization should think beyond financials and recognize that compliance is relevant to so much more.
Many of us think of S&OP and think of days in meetings and unending discussions between the functional groups in the business. Many will agree it is a powerful tool. Many will also contend the benefits might not justify the tremendous cost of the exercise. Others might also look at expensive software for sale at high prices that could simplify the process but still would not yield the necessary benefit.
Inventory management is central to getting the results you need from your ERP. At the same time, your ERP helps provide the good inventory management you need.
Inventory management allows you to properly plan your replenishment orders. Your inventory quantity is accurate so when the signal to buy or make more is received, you have confidence that you need to take action. Your ERP allows you to categorize parts which will help easily order the right quantity. One item is ordered only when there is a specific demand in exactly the quantity to meet the demand. Another item is lower cost and easily procured. Your goal here is fewer transactions so you order enough to satisfy all the demands seen in the next three months. Optimizing replenishments means fewer transactions and that leads to better inventory accuracy.
Supply Chains have never been more dynamic than they are today. Their complexity has increased leading to risks associated with geography, compliance – even natural disasters. This occurs on the vendor and the customer side. It follows that as complexity increases, so do costs. When these risks are not appropriately managed companies can lose customers, profits and reputation.
Supply chains have gone global for a number of reasons. They may be seeking cost savings or they have capacity issues. Companies may outsource certain tasks seeking subject matter expertise or to allow themselves the ability to focus on core capabilities. Whatever the motivation there are times when it seems like the sky is falling but there are some best practices for supply chain risk management that can reduce the companys vulnerability.
Miriam and Gerry are receiving clerks. They are no different from millions of us who work hard and are underpaid. Their job only has visibility when something has gone wrong. Many days they will work hard all day and none of the higher-ups even know they were at work.
Organizations of every kind want to get lean. Adding value, eliminating waste, and automating are some current buzzwords. ERP, on the other hand, is sometimes considered a necessary evil or even a creator of waste. But these two disciplines can get along quite nicely as complementary tools in our toolbox.
The best definitions of lean consider it to be an endless cycle. We identify value and define it in terms of value to our customer. We map the value stream; we identify all the activities that create value and place them along the stream of our processes. We create flows where our products and services move easily from one step to the next. We establish pulls; nothing is completed and passed along the stream until the downstream operation is ready to receive. We seek perfection, practicing every step until it is automatic and eliminating any unnecessary steps. Then we do it all over again.
Are you looking for ways to improve the profitability of your company? If so, using lean management and manufacturing practices may be just what you need.
Lean management (or lean in general) combines processes, methodologies, measurements, and training to increase profits and minimize process breakage. The whole idea is preserving value for the customer with less work. The management philosophy of lean manufacturing mostly came from the Toyota production system (TPS). TPS was renowned for improving overall customer value at Toyota and has been attributed for much of their success.
There are generally a couple of questions you should ask when you start thinking about lean management.