What are the main points for manufacturers to consider when configuring their ERP system for a Lean environment?

Agree with Mr. Mohammad Tohamy Hussein Hussein  

I fully agree with Mr. Hussam murad

To setup an ERP for Lean environment there are set of practices and tools need to be adopted to have lean based manufacturing ready for data automation.

- For instance one of the famous lean practices is "one piece" batch, where production batch qty is one UOM, this will have to be rolled down from the MPS to the Manufacturing Orders.

- Another important lean concept the JIT where PO's are mostly back ordered from sales orders, here we need to have the time fence and the lead time accurately calculated to minimize the inventory level.

- Cost concerned setting has to decide how the WIP will be calculated to speed up the reporting and inventory valuation update, are we going to use real time or back flush for posting inventory transactions.

- For waste elimination and cost reduction we can consider ABC for inventory and costing. (Cost=>Activity Based Costing - Inventory=>ABC Categorization)

- When we have multi site/UOB organization here global material planning and integrated inventory exploring reports and views has to be in place to utilize resources and logistics as lean as possible.

Above is part of areas where ERP setting can comply with lean concepts.

You are talking about CONFIGURING the ERP system to fit a  lean manufacturing environment .

1. Does this mean that Lean environment already exists ?
2. Did you already select/purchase the ERP system ?

Your answer to the2 questions above will very much dterimine the nature of the answer to your question

Please  clarify and let us procees accordingly !

mr.taib has made the point.

The following are important handful tips to help manufacturers configure their ERP system for a lean environment.

•          Wherever possible, couple two or more operations so that work does not accumulate between work stations. By using this pull technique, work will flow one piece at a time through the cell. Never make more product than you need to satisfy the current demand for the product.

•          See if your vendors will deliver smaller quantities in more frequent deliveries. This will enable you to reduce the re-order lot size to your suppliers, as well as the amount of inventory you carry.

•          Enable the lot-for-lot sizing function in your ERP system. When you do this, lots will not be generated in sizes greater than the quantity actually needed to satisfy requirements, resulting in a zero base inventory. At the finished goods level, this would result in either a zero-based or safer stock-based inventory.

•          Schedule machine maintenance. Don’t wait for the equipment to fail. Planning for repair and maintenance gives the maintenance department time to receive any repair parts and materials needed. It also allows the planning department time to work around the problem of not having that piece of equipment.

•          Review your bills of materials, work center files and routings. Your ERP system requires accurate data. If a bill of materials has the wrong quantity of parts needed to make a certain item, that will guarantee an assembly problem, which will lead to inventory problems.

•          Spend one production cycle physically counting your inventory. This provides fresh data regarding inventory errors. Annual physical inventories are never accurate and provide no information as to when, where and how inventory errors occurred.

•          Figure out why non-productive time dedicated to queue, wait, and move times is happening. Reduce those times, and you’ll see a reduction in lead-times and inventory levels.

I think it is customization as per needs

First understand  external customer requirement level and internal performance level which can be control through control and specification Limits automatically reduce nonvalue-added

calculate the capacity of the facility, and implement kanban system,

schedule and plainning depend upon lead time which only be possible when management confident about their system performance

ERP system requires accurate data. which only be possible through kanban system

I echo with Mohamed Tohamy Hussain's answer.

Agree with Mr. Mohammed Thiab

agreed with mr.taib.