Lean ERP – An Oxymoron?

By:  Donald Clark CFPIM, CSCP
By now, everyone has probably heard of, and many implemented, the concepts of “Lean”.  You know – analyzing your processes, finding and eliminating waste, implementing Kanban methodology and pull systems, adopting Heijunka scheduling techniques and the like – these are what most people think of when they think of Lean.
There are the Lean purists in the world who will be happy to tell you that a company (I am thinking of a manufacturing company here) who is truly lean no longer needs an ERP system to do things like planning, scheduling and execution.  I have heard from some folks that ERP becomes obsolete as a company becomes lean; that Lean and ERP are mutually exclusive and therefore calling any ERP system lean is an oxymoron.
I say that this is not true.
As a student of manufacturing practices for the past 26 years, I have seen many theories become popular, many companies adopt them, consultants make money teaching them, and then they get ditched by the side of the road for the new “flavor of the month”.  Is Lean one of these fads?  No.
However, to say that Lean will render ERP obsolete in manufacturing companies, just does not fly.  Back in the 1970’s and 80’s when Just in Time (Lean’s father) was gaining acceptance, there were those who said that it would make MRP obsolete.  True JIT practices, they said, would eliminate the need for detailed planning that MRP provides.  This never happened.  JIT practices were focused on execution and without MRP planning materials there would be nothing available to produce.
Just like in the JIT/MRP relationship of the past, the best planned and executed Lean program still requires the tightly integrated material planning engine that an ERP system gives us.  In fact, an ERP system can help a company better manage their Lean initiatives.  How so?
Take for example Lean Manufacturing in Dynamics AX 2009.  In this module, users can automate many lean processes including:

  • Sales-order driven scheduling
  • Kanban management
  • Work flows
  • Reporting by exception
  • Heijunka scheduling
  • Etc.

I would not mind showing you how lean works in an ERP system if you have the time and inclination.  Thanks and have a great day.

2019-01-16T11:39:18+00:00 May 24th, 2010|Dynamics 365 for Finance and Operations (Dynamics AX), Industry Insights, Made-to-Order Manufacturing, Made-to-Stock Manufacturing|Comments Off on Lean ERP – An Oxymoron?