If you work in the manufacturing or distribution industry, you’re likely well-versed in lean process or lean manufacturing. Many modern ERP software companies have incorporated this understanding of waste into manufacturing ERP solutions.
This blog demonstrates how ERP can you help avoid the 6 common waste areas in your business.
1) Transportation
When does this happen?
Transportation waste happens when parts or materials are needlessly moved from one location to another without adding value to the finished goods that your customer will eventually receive. This type of waste also pulls in additional resources such as people and machinery; removing them from more productive practices in the work place.
How can an ERP system help?
A robust ERP solution enables you to time production and logistics accordingly, so you don’t unnecessarily move goods from one location to another. It also lets you schedule and track the use and performance of your transportation machinery and rolling stock.
2) Inventory
When does this happen?
A common cause of inventory waste is over ordering on ‘Just in case’ materials, when they should really be classified as ‘Just in time’; leading to excess inventory. This is a dangerous concoction as not only can raw materials become lost or unusable, but also parts gather dust within the warehouse and take up valuable space and money which can be freed to other areas of the business. In addition, common causes of inventory waste are ineffective forecasting, production planning, or distribution.
How can an ERP system help?
Invest in an ERP system which incorporates a Material Requirements Planning system (MRP) which is a really useful module to balance supply and demand. MRP assesses the demand against the supply by looking at stock level, active jobs and purchase orders.
3) Motion
When does this happen?
Motion turns into waste when people and machinery in the production process have to move in such a way that it potentially causes injuries, stress, damage, and wear-and-tear. Motion-induced waste can be the result of poor workstation flow, miscalculation of lead times, and unusable or flawed production line configuration.
How can an ERP system help?
The beauty of ERP system is that it allows your business to design your processes as well as continuously track Overall Equipment Effectiveness using real time data . OEE is a great metric for identifying red flags as well as bench marking progress within your internal processes.
4) Waiting
When does this happen?
Waiting may comprise in employees waiting with regards to decision making, waiting for information, approvals, other departments actions etc. This type of waiting normally occurs whenever an employee or a departmental function lacks the confidence, ability or authority to act and decide and therefore; can create bottlenecks that can stop or hinder production.
How can an ERP system help?
A robust ERP solution enables users (across various departments) to directly access and rely on the same up to date information therefore; your employees are working smarter and are ultimately reducing waiting time.
5) Overproduction
When does this happen?
Overproduction waste means you manufacture more of a certain product than your customers need right now. This could be a sign your supply chain is not as efficient as it should be.
How can an ERP system help?
Implementing an ERP system gives your business greater visibility of what is happening in other areas such as potential inventory issues that may impact on production planning; allowing you to make smarter and timely decisions.
6) Defects
When does this happen?
This type of waste includes product defects, batch contamination, breakages etc; which may indicate deeper issues with your finished goods or processes. If left unresolved, this could create a dint in your brand reputation as well as dissatisfied customers.
How can an ERP system help?
ERP designed for production operations provides you with the transparency and visibility to identify and resolve any quality deviations as soon as they become apparent and stop them from wreaking havoc on your production.
Click here to find out more on Lean process improvement.
Are you currently considering a new ERP software solution? Call us on 0191 535 8215 or email us at: [email protected].
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