While purists may say the most high tech that “lean” practitioners should get is paper, pencils and spreadsheets, organizations applying technology to lean manufacturing are achieving significant improvements in speed, efficiency and profitability. Now technology is less likely to go head to head with lean, as it is increasingly used to improve lean-operation performance.

The use of technology to support lean operations remains a topic of contention for many. Yet organizations that apply technology to lean manufacturing are achieving significant improvements in speed, efficiency and profitability.

Although early lean adopters were pleased with the flexibility that manual solutions provided, there have been a number of technology advances and external pressures — ever-escalating customer expectations, pricing pressures, expanding supply chains — that are making technology-free deployments impractical for many reasons.

In fact, a recent Aberdeen Group report entitled “Lean Benchmark Study: Closing the Reality Gap” notes that best-in-class companies are using technology solutions to improve operational performance, as well as collaboration.

The most controversial claim regarding the use of technology to support lean is that it can help to institutionalize lean culture. The Aberdeen Group study provides an example in an automotive parts facility that leveraged its lean specialty solution to capture and maintain all production-related data in a “single version of the truth,” which today is taking center stage for all weekly meeting and daily shift planning discussions.

Departmental spreadsheets and contentious discussions have given way to a single electronic dashboard that is leading to more results-oriented and collaborative meetings.

The Aberdeen Group study, released in April, found that 62 percent of the nearly 300 manufacturers surveyed are using enterprise resources planning (ERP) systems to not only manage enterprise processes such as customer orders, financials, purchasing, supply chain and manufacturing planning, but also support lean operations. ERP software can enable plant-floor systems to provide a means to connect the enterprise with production, which is an ability most have lacked until very recently. As well, forward-thinking manufacturers are now relying on ERP and supply chain vendors to establish collaborative relationships with their suppliers, “thus avoiding potential issues associated with language, culture and 12-plus hour differences in time zones.”

Initially, ERP systems were designed for the business top-down, says IndustryWeek this month, so “they had scant real-world connection with the plant floor. By contrast, the plant was the setting for lean manufacturing initiatives and other process improvement efforts that were yielding their own significant gains, usually sans technology.” A remaining pain point for many manufacturers lies in the disconnect between the plant floor and the enterprise.

Unfortunately, in many cases, companies have ended up putting together their own systems to get the functionality they need to run and manage their operations. “There isn’t an ERP for manufacturing,” Colin Masson, research director for manufacturing operations at AMR Research, points out in the IndustryWeek article. “Most manufacturers have to assemble a solution from multiple vendors to meet their manufacturing needs.”

Now ERP software vendors are taking measures to fix the disconnect, including applying the technology to the lean process. A number of ERP software packages now include modules that support lean principles and activities, including level scheduling and kanban management.

In a December 2005 survey of manufacturers, Austin, Texas-based Factory Logic reported that more companies are beginning to apply or consider applying systems to support lean production and scheduling methods. One reason is that manufacturers have experienced consistent problems as a result of depending on spreadsheets to track and support lean activities.

“Companies are now recognizing the need to go beyond the spreadsheets they are currently using within their lean pilots to reach the next stage of improvement,” Factory Logic’s Web site states. The company’s survey also found that while two-thirds of respondents use spreadsheets for lean efforts, more than half said they are currently making IT investments in operations to augment this capability.

Three quarters of respondents reported troubles with data integrity arising from manual data entry; meanwhile, 71 percent reported too much time spent on data collection and manual calculations. In the past, data collection had been a sticking point for those committed to lean initiatives, as data recording tended to be viewed as an activity that adds no value to the product.

Of course, over time, operations tend to grow organically to more complex enterprises, so technology becomes a necessity. After all, manufacturers must balance multiple orders and far greater product variety.

Reports Factory Logic:

Many companies have begun by using spreadsheets but have quickly found that they need something more substantial in order to handle the real-life complexities of producing leveled production schedules and supplier demand projections while responding effectively to sometimes volatile customer demand.

Also playing an increasingly important role in the daily operations of many lean manufacturers are lean specialty and manufacturing execution systems (MES) solutions, particularly in high-volume or highly complex production environments, says Jane Biddle, VP of Global Manufacturing Research at Aberdeen Group, in a recent APICS article.

Lean specialty solutions’ tasks include the following: publishing weekly schedules and daily sequences; managing the flow of product; and consistently collecting shop floor data relative to material flow, process and component traceability, resource performance and quality conditions.

Leading manufacturers are using MES-operator dashboards to mistake-proof (“poka-yoke”) production by “enforcing setups, ensuring inventory availability, verifying that operators are properly trained, and making sure that needed tooling is accessible.”

Notes Biddle:

MES also are being used to identify issues, facilitate root cause analysis and corrective action, and notify appropriate parties when the problem is resolved. Both lean specialty and MES leverage bar code and wireless technologies to support electronic kanbans, sending triggers to upstream processes and potentially to suppliers as materials are consumed.

Of course, if manufacturers decide to leverage technology into their lean environment, it is critical to remember that, while new technologies can be helpful and sometimes empowering for production workers, they are anything but cheap, easy or wholly painless — and neither the implementation nor the return is ever quick. Yet while the benefits are rarely if ever instantaneous, organizations that apply technology to lean manufacturing are more likely than not to achieve significant long-term improvements in speed, efficiency and profitability.

Resources

Still At Odds or Has the Time Come?
by Jane Biddle
APICS e-News (Vol. 6, No. 8), May 2, 2006

Where’s the Magic? Is Manufacturing Software Delivering Results?
by Doug Bartholomew
IndustryWeek, July 01, 2006