Lean is all about eliminating waste and non-value add processes in your business. For the last 20 years, lean initiatives have helped manufacturers improve customer satisfaction levels by producing higher quality, lower cost products.
As the business climate has gotten more and more competitive, manufacturers worldwide have become even more customer-centric, continuously asking “Would my customer perceive this activity as adding value?” Manufacturers are widening the scope and focus of lean thinking to encompass all processes that contribute to the bottom line. Lean initiatives are now increasingly being applied to all areas within the organization – from sales and marketing to engineering and production through to finance and post-sale service. The true benefits of lean thinking will only be fully realized when the entire organization adopts it.
The first place that people envision “Lean” is on the plant floor. Flow manufacturing is characterized by production lines and/or cells in which work moves piece-by-piece through the process, not in batches. The flow of work is controlled through physical signals called Kanbans that can be tags, labels, containers, or electronic signals. The Kanbans and work cells help minimize inventory levels, accurately size and time work activities, and reduce set-up and handling time.
Consider the benefits of lean over traditional batch manufacturing which is normally controlled by paper work orders. Overhead includes the issue of work orders, release of work orders, transfer of paperwork, transaction reporting, etc. Batch manufacturing also includes a lot of down time, waiting to complete other jobs, set-up of equipment, and often employee re-assignment.
New ERP software applications can now manage electronic queues for Kanban control without any paperwork overhead. For instance, as inventory levels or order demand require additional product, Kanbans (such as stock replenishment or purchase Kanbans) are automatically requested – eliminating waste and streaming the process.
Lean principles can be applied to many other areas of a business. For purchasing, an ERP based real-time purchase Kanban can replenish directly from the supplier and/or notify purchasing that a stock replenishment is required. Email requests can be automatically issued. Moreover, some newer ERP applications have web based portals, allowing you to give vendors (and even customers) security-controlled access to portions of your ERP system to further streamline processes.
Sales / Customer Service
Sales and customer service are a company’s frontline. When waste takes place in these departments, it’s normally due to delays, errors, lack of communication, and time wasted researching information for customers. Many lean companies have moved to Customer Relationship Management (CRM) systems to track customer information. These CRM solutions give sales and customer service a complete view of the customer’s information, quotes, orders, job status, shipments, invoices and any correspondence with the customer all from a single screen and in real-time – eliminating waste and creating value to the customer. These integrated systems can further reduce waste and error by enabling reps to enter an estimate, change the estimate to a quote, change the quote to an order and change the order to an invoice without re-entering any of the information.
Lean processes are continually reviewed and improved upon. Although these processes can be applied throughout your business, be careful not to set up information silos by department or division. In order to reduce waste and streamline work flows, look at your organization as a whole. Information sharing is often key to increasing efficiencies. A fully integrated ERP and CRM system can help drive these lean initiatives. You can reduce waste, errors, and costs, while increasing efficiencies throughout your whole business - not just the shop floor.
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