Lean Resource Planning
Part 2 of 4 

Each of these concepts or philosophies complement each other and multiply the benefit each can offer if the others are also in place. The synergy between each is easier to understand if you identify the root purposes of each. In the case of MRPII the value adding capabilities are an inte­grated framework covering most of a manufacturing enter­prise. Also it is superb at inventory management.

JIT is oriented toward work simplification and manufac­turing excellence. Often this is stated as the "elimination of waste." When one thinks of JIT the following often come to mind:

• Single Minute Exchange of Die (SMED)

• A work force trained in problem solving( Quality Circles)

• A multi-skilled work force with a flexible attitude

• A high level of Industrial and Manufacturing Engi­neering capability

The benefit of JIT is never fully realized unless it is being applied within a rational framework (MRPII/ERP). Note what Shigeo Shingo, the architect of the Toyota system said, "Now you think that Toyota Motor is wearing a smart suit, so you would intend to purchase one a suit called 'Kanban System' (JIT), but your body was bubbled-up so fat that you could not wear it." Without a rational framework one could easily make the wrong part at the wrong time with utmost efficiency. JIT has greatly influenced the ERP model in the areas of human engineering and work simplification.

CIM started life for most as an umbrella under which islands of automation were to be tied together. The goal was and still is enterprise integration. Because of the efforts of those pioneering, CIM, many problems have been resolved on interfaces between systems, protocols and standards. A fine professional society, the Computer Automated Sys­tems Association (CASA), has disseminated a tremendous amount of valuable information to the manufacturing industry. The astute manufacturing executive now under­stands that automation should follow after the application of JIT precepts dealing with work simplification so as to not automate something which is wasteful and convoluted. CIM interacts favorably with JIT and MRPII/ERP.

Enterprise Resource Planning (ERP) consists of MRPII as a base, and extensions to the original body of knowledge significantly influenced by JIT, CIM and Project Oriented Manufacturing; the leveraging of cost-effective computing technology particularly in the areas of worker empower­ment and human engineering; also, flexibility to respond to opportunities to gain unforeseen competitive advantage, i.e., the recent attention given to Business Process Reengineering, the war cry to find better ways of doing work by focusingin on the elimination of wasteful activities and, hence, time ( shades of JIT and Activity Based Man­agement (ABM)). In summary ERP is the latest tool in the battle to gain competitive advantage and is influenced by and complementary to MRPII, and JIT, CIM among others.

The major elements of ERP are the MRPII foundation, the extensions described earlier, the use of a computerized Relational Database Management System (RDBMS), ex­tensive use of a 4th generation computing language and what I will call market driven technologies and concepts. We will now discuss the Information Technology (IT) side of ERP.

Without question we wouldn't be discussing a new genera­tion of resource management approaches if the price per­formance of IT were not so attractive. In the early eighties all computer software written in support of Closed Loop MRP/MRPII had to have the location of the data to be processed embedded in the programs themselves. If the programs needed to be revised because of the dynamics of doing things somewhat differently, which in the eventful and exciting times of the eighties was a given, much effort, hence time and money, had to be spent.

The RDBMS altered the cost and time dimension of change and offered greater flexibility and thereby indirectly fur­thered innovation. When RDBMS's are used, the relation­ship between folders (files) are easily maintained and changed and the Database Management System (DBMS) is now the software for locating data which was once a shared responsibility between it and the application software program ( AKA," the bottleneck"). This new generation of DBMS's has even penetrated the office worker market­place with incredibly inexpensive systems.

Another IT-based enabler to rapid change and flexibility is Fourth Generation Languages (4GL). The productivity of a computer programmer in a mainframe computer environ­ment was frequently cited as twenty-five lines of computer instructions per day. A late eighties vintage MRPII system easily exceeded one million lines of instruction. In total one doesn't have to be a rocket scientist to see that supporting a drive towards reference points such as Agile Manufactur­ing and Time-Based-Competition wasn't possible with this level of software development productivity. 4GL is a com­puter language shorthand. One line of 4GL equates to many lines of 3GL languages, which means quicker re­sponse to change.

A number of other IT related characteristics define ERP. After a decade of reading about, experimenting with or putting in place CIM, the manufacturing industry executive now expects integration between systems. The ability of a system to import and export data is absolutely demanded, i.e., the CAD system talking to ERP and bar code data collection systems talking to ERP, and so forth. A survey on open systems by the market research firm, Forrester, indirectly points out that for the vast majority, the main benefit of open systems is once again integration. As a result of the personal computer the computer literacy of the executive corps has increased and been influenced by the user interface of the Macintosh and Microsoft Windows. The technoids call this man-machine dialogue a pseudo Graphical User Interface (GUI). All of these are part of the ERP definition.

To be Continued