ERP and the lean enterprise

For the last several years, businesses across the globe have been striving to adjust their processes towards a lean business model. Lean operations really equate to all the results which modern enterprises are trying to obtain in today's highly competitive world - shorter lead times, improved quality, reduced cost, increased profit, improved productivity and better customer service. But becoming lean is not a short or easy journey.

Enterprise systems - ERP, customer relationship management (CRM), supplier relationship management (SRM), supply chain management (SCM) - provide a source of information for mapping out lean strategies, a mechanism for implementing new and more effective processes, and a measurement system to track progress and document gains.

The lean model is really a Western adaptation of the highly successful Toyota Production System. The single underlying ethos in lean operations is the elimination of any process or practice which does not add value to the product or company - that is the eradication of wasted time, effort or resources in every facet of the enterprise to achieve the most efficient and productive model possible.

Says Tiaan Grobbelaar, General Manager at Epicor Scala: "Putting this ethos into practice, however, requires a massive paradigm shift in the thought processes of the entire organisation, and simply can not be achieved without tireless commitment to refining processes to add more value while eliminating those procedures that do not."

Although initially enterprise information systems were considered inconsequential or even insignificant to the truly lean organisation, recent research into the subject of enterprise IT solutions as a core component of lean by leading integrated ERP provider Epicor now reveals that in fact the model can be far more easily planned and adopted through the proper leveraging of these systems, making enterprise applications a crucial component of any organisation aspiring to this ideal.

This research paper goes into detail on how enterprise systems can enable the functions which will lead to the creation of a truly lean enterprise - complete with all the benefits associated with this most efficient of models.

The Epicor research shows that attempting to eliminate wastage in the complex processes which make up a modern enterprise without detailed, accurate and real-time information across all aspects of the organisation is itself a wasteful, inefficient process. With this data at your fingertips, the optimisation efforts can be focused on the enterprise arenas most in need of waste reduction for the creation of tangible business value.

Enterprise management and planning systems are therefore essential to the first step of building a lean organisation as they highlight these areas most in need of optimisation and track and store the full set of procedures which make up these processes for review and adjustment.

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Building a lean enterprise is not a one-time project which one completes and forgets about. It is a continuous process of adjustment, evaluation and fine-tuning based on measured results. Enterprise systems provide comparative measurements documenting the effect of the changes on lead-times, costs and efficiency. After the initial objectives are achieved, the system captures the input needed for the next round of improvements.

In addition, modern enterprise solutions like Epicor Scala also include business intelligence (BI) tools and functions allowing those responsible for managing and monitoring the combined lean efforts with easy to use graphical representations of information and combination of data often not available in individual applications. These interactive analysis techniques provide a broader view of the enterprise and give invaluable insight into the knock-on affects of any process adjustments.

Creating a lean sales and customer service environment should be approached not only from the wastage elimination perspective but should also be taken as an opportunity to improve customer satisfaction levels. When waste is removed from customer service processes, delays, inconvenience, mistakes and costs also are eliminated. The resulting streamlined processes inevitably make it easier and more rewarding for the customer to do business with the company.

CRM and workflow management functions within enterprise systems provide a useful means of monitoring how smoothly existing order and order processing functions occur, and identifying means of improving these to the point of highest efficiency while providing the highest level of customer satisfaction.

Lean principles can well be applied across the full breadth of an enterprise's operations, but the most vivid examples of a successful lean model at work come from the plant floor. Here electronic management systems digitally replace Kanban tagging to create the orderless manufacturing procedures which match demand with the optimised deployment of resources automatically, thanks to complete integration with other divisions within the organisation.

Enterprise systems are all about seamless, rapid communications after all. An integrated platform allows for accurate forecasting based on real information mined from the relevant areas within the organisation as well as tighter ties with suppliers through automated, electronic processes. Applying lean principles to this collaborative environment creates a highly efficient environment where partners both up and down stream are taken into consideration and process optimisation purely by virtue of easy communication and therefore participation from design through to transaction.

Contact Tiaan Grobbelaar at Scala Africa on +27 11 475 2010 for more details on leveraging enterprise systems in the increasingly lean modern business environment.