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Enterprise Profitability
Part 6 of 8


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Lean Manufacturing, Basics, Principles, Techniques

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Integrating with Customers
Integrating with customers can include
• direct answers from the customer with respect to their true needs from a functionality or result standpoint
• providing ideas directly to the customer during their design cycle.
Integrating with Suppliers
Likewise, if suppliers have design engineers, integrating the design process with suppliers' engineers can reduce design errors, tighten the relationship between the two companies, reduce costs, reduce the sup­pliers' time to respond to the manufacturer, and improve performance and market acceptance of the final product.
Project Management
For some manufacturers, managing construction projects is as impor­tant as managing the flow of materials through the plant. In fact, in such companies more than half the purchase orders issued can be for new buildings and equipment.
Project management techniques can also be applied to the product development process itself. Companies that have done so have reduced their average product development times by 30 to 50 percent.
MANUFACTURING INTEGRATION
Manufacturing integration includes planning and execution of the ma­terials and manufacturing functions, plus the supply network that feeds those activities. It also includes quality and maintenance, because they are integral to the manufacturing and materials process.
Although this area is the design center and traditional strength of MRP II and ERP systems, complete integration across the entire area was virtually nonexistent in 1999. We discuss the following functions.
Material and Capacity Planning
Material and capacity planning includes the following functions, which in older MRP II and ERP systems are separate modules:
• master production scheduling (MPS)
• rough-cut planning, the capacity side of master production sched­uling
• material requirements planning (MRP), the original foundation of MRP II systems
• capacity requirements planning (CRP), the capacity reporting sys­tem which corresponds to MRP
• the perpetual inventory system.
However, the hierarchical model of running MPS, then rough-cut, then MRP, then CRP, was created when computers were slow and ex­pensive, and reacting in a week was world-class. The entire material and capacity planning suite is now starting to be replaced by advanced plan­ning and scheduling (APS) systems, discussed later in this section.

Manufacturing Execution Systems
Shop floor systems were communicating MRP's detailed requirements to the shop floor in the 1970s, with dispatch lists and priority lists. However, there was a significant gap between the planning systems and actual execution, because the planning data was frequently late or inaccurate. Many systems evolved to integrate execution to planning, including data collection, work order tracking, and SPC. A manufac­turing execution system (MES) is an online, integrated, computerized system that integrates the methods and tools used to accomplish pro­duction. An MES is the best way to manage environments that require work orders on a shop floor (and therefore are not suited for repetitive, kanban or visual flow techniques).
JIT
JIT and TEI/ERP systems have inherent difficulty coexisting. From a scheduling standpoint, JIT incorporates a "pull" system methodology, meaning that no materials move and no work is done until a down­stream customer consumes a product. Then the vacuum left by the product's departure very rapidly "pulls" a replacement product through the production system. TEI/ERP's central planning systems are "push" systems, which anticipate customer requirements, and push materials through the production system to be ready for the customer. The best TEI and ERP systems support JIT scheduling and execution on the shop floor, and display actual production and quality data. Repetitive-enabled ERP systems support JIT techniques.

To Be Continued


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