Home: May 2007 › Lead Story › A balanced approach
A balanced approach
31/05/2007 | Channel: Technology, Manufacturing
IS THE APPROPRIATE USE OF MANUFACTURING IT KEY TO BECOMING TRULY LEAN? A RANGE OF INDUSTRY EXPERTS GIVE THEIR OPINIONS
Diet versus exercise.When it comes to losing weight, becoming healthier and improving fitness, there’s a sliding scale between the fanatics of an ‘either/or’ approach and the more moderate ‘both/and’ view.When it comes to manufacturing wellbeing, a similar tension exists between the role of lean methodologies and that of IT.While there are many strident voices within the lean community that routinely decry the use of any serious manufacturing IT, there are also those who are finding that a ‘both/and’ approach is actually the best way forward.
Graham Hackwell is technical director of Preactor International, the UK’s leading supplier of Advanced Planning and Scheduling (APS) software and he explains why he believes lean on its own can only go so far. “lean manufacturing’s prime objective is to eliminate waste in order to deliver orders on-time, with minimum inventory, the shortest lead time and the highest possible utilisation of resources. A lean initiative usually involves Value Stream Mapping to identify tasks or areas where no value-add takes place, and then typically makes use of Visual Production Control (VPC), to control the manufacturing process. These however are just steps along the road to the ultimate lean environment: - Make/Build to Order (MTO).”
To demonstrate this, Graham suggests manufacturers honestly ask themselves what he calls the ‘ultimate test of lean’ question, “If you stopped accepting orders today and then waited until the factory stopped, how much inventory would you have left?”As he explains, “If it is none then you are truly in a MTO environment but if you relied on Kanban systems, only final assembly or dispatch are MTO. All upstream processes are Make to Stock. Kanbans are simply a better and more visual way of controlling inventory. It’s not the leanest of lean and, while demand is pretty stable they work very well, but it is well known that Kanban production control does not work effectively with variable demand.”
For Graham, this is because Kanban production control still relies on the Economic Batch Quantity (EBQ) mentality which permeates most of Materials Requirements Planning (MRP), although EBQs are almost universally derided by the lean community. Kanbans are simply smaller EBQs, and hence you are still making to stock. “A better way”, he maintains,“would be to disable any Make to Stock functionality within an MRP/ERP system which would force the system to generate a batch for each order, at each level of the Bill of Materials. The APS software can then perform dynamic aggregation of batches to minimise changeovers by sequencing the smaller batches together to form a ‘big batch’ wherever possible. The fundamental problem with EBQs and Kanban is that the batch sizes are fixed in advance and then cannot be broken down. In today’s world the 'best' batch size is determine by the current product mix and delivery profile which can both change rapidly. To get the best tradeoff between minimising changeovers and delivery performance a ‘what if ’ tool like APS, which allows the impact of the dynamic aggregation to be seen, is essential to make the right decisions.”
For Graham then, APS and lean initiatives are complementary with APS providing a decision support tool to the planner to help eliminate non-value added activities and get deliveries on time. And with companies including Cosworth, Toyota, Foilex, Cash Bases to name but a few using Preactor to assist in differing ways with lean strategies, Hackwell’s view is more than just a theoretical one.
Jonathan Orme of Exel Computer Systems also takes the ‘both/and’ approach when it comes to lean and IT. Like Graham, he sees the starting point as the elimination of
waste, but adds an additional dimension. “At Exel we have long recognised that IT
systems, like manufacturing, can easily become cluttered with non-essential activity,
processes and even software. Our commitment to working with leading technology means we have long championed the idea of web enabled, browser based ERP solutions. At a stroke, this removes the need for client based software and systems which have become increasingly costly in terms of IT resource and maintenance, resulting in IT actually adding to a company's wasted energies.”
As a good example of IT and lean working in a complementary way, Jonathan cites Naim Audio which designs and manufactures high end audio and audio visual equipment. Naim faces a number of tough business challenges, the greatest of which is quality and ensuring a consistent supply of a hugely diverse range of quality components to last the considerable lifetime of each product. Another challenge is in the area of forecasting, the related area of stock levels of very high value goods that can easily be damaged and maximising resource efficiency.
As Jain Giles, Naim’s IT Manager comments: “We wanted to build a long term and secure working partnership with a system supplier, and not just a product.With Exel being the author of EFACS, an established product, we knew that we would have access to the most knowledgeable people about the system.”
The time since its successful go-live has been defined in two key ways:- a time of enjoying major benefits from EFACS and also a drive towards a leaner manufacturing methodology, the latter led by Neil Carden, Naim's manufacturing director appointed three months after the switch to EFACS. Neil's background is one of considerable lean/Kanban experience and he identified that EFACS could work in partnership with building a lean working environment. “It was clear that with EFACS, we now had much greater reporting at every level, especially on the financial side of the business.We also had much more information in terms of forecasting and how our supply chain extended into the future, up to 20 weeks and beyond.We were also identifying a lot of non-value added activity, wasted time in other words, and are now implementing greater use of Kanbans to help in this area. In this respect, we will be using EFACS in a more supportive role, primarily to update stock levels etc, in line with what's happening on the shop floor.”
Steve Whitehouse from SSL WinMan also points to the need to have the right technology in place in order to work in a complementary partnership with lean methodologies. “It’s all too easy to lose sight of the simple fact that IT is there to help, to do things not just more efficiently but also more effectively.With older technology, ERP systems could often be very heavy in terms of redundant functionality and therefore costly; they were also very inflexible in terms of keeping a close fit to the changing requirements of a company’s business model. Technologically advanced systems like our own, built completely on Microsoft .NET, offer levels of flexibility, customisation and business fit simply impossible before. This is invaluable when working hand in hand with a lean strategy because as soon as you have a system that can’t accommodate the demands made upon it by lean, it simply becomes another constraint.”
Steve also stresses the importance of the vendor’s understanding of lean principles in order to deliver a successful partnership between IT and lean and cites the case of the Magal Engineering group as a perfect example of this. The product of a
management buyout, the Magal group of companies has undertaken an ambitious program for manufacturing and business excellence. Central to this was the successful implementation of SSL WinMan at four different company sites in less than one year.
In the words of Magal's financial director Kevin Lowen, “We knew we were lean and mean in terms of manufacturing philosophy. Because of the volatile nature of orders and price-downs coming from Automotive OEMs, we set about cutting its overheads as much as possible. This included looking for an uncomplicated yet flexible software solution focusing on lean manufacturing.” He explains why SSL WinMan was chosen, “SSL staff have the required expertise in dealing with lean issues. They understand our business process and are fully conversant in the discipline of manufacturing.We had a need, they understood it, and supplied a solution and an advice/support package that fitted our requirements.”
In addition to a range of other benefits, Magal specifically benefited from WinMan’s virtual Kanban functionality. “We wanted to use the product as a tool to help us in our Kanban drive to reduce stocks,” comments Dave Downing, logistics manager at Magal company Western Thomson. He added that since WinMan went live Western had already saved around £1 million in inventory from improvements in business processes, which are now complemented by the functionality ofWinMan. The Kanban element within WinMan is focused on the supply chain, with the company’s suppliers being on WinMan's supply chain Kanban list, so they receive a weekly fax to tell them the quantities the company wants week by week. Dowding concludes, “WinMan is invaluable in producing works orders and tracking
them efficiently. And between these processes,WinMan helps us to control our Work in Progress (WIP) in a more lean, more effective way.”
Whether physical or manufacturing health and wellbeing, there will always be fads and competing voices for the latest ‘quick fix’ to often complicated problems.What this article shows is that when it comes to lean and manufacturing IT, not only can both work in harmony with each other, but in a number of ways to be truly lean actually necessitates the appropriate use of Manufacturing IT.
Graham Hackwell is technical director of Preactor International, the UK’s leading supplier of Advanced Planning and Scheduling (APS) software and he explains why he believes lean on its own can only go so far. “lean manufacturing’s prime objective is to eliminate waste in order to deliver orders on-time, with minimum inventory, the shortest lead time and the highest possible utilisation of resources. A lean initiative usually involves Value Stream Mapping to identify tasks or areas where no value-add takes place, and then typically makes use of Visual Production Control (VPC), to control the manufacturing process. These however are just steps along the road to the ultimate lean environment: - Make/Build to Order (MTO).”
To demonstrate this, Graham suggests manufacturers honestly ask themselves what he calls the ‘ultimate test of lean’ question, “If you stopped accepting orders today and then waited until the factory stopped, how much inventory would you have left?”As he explains, “If it is none then you are truly in a MTO environment but if you relied on Kanban systems, only final assembly or dispatch are MTO. All upstream processes are Make to Stock. Kanbans are simply a better and more visual way of controlling inventory. It’s not the leanest of lean and, while demand is pretty stable they work very well, but it is well known that Kanban production control does not work effectively with variable demand.”
For Graham, this is because Kanban production control still relies on the Economic Batch Quantity (EBQ) mentality which permeates most of Materials Requirements Planning (MRP), although EBQs are almost universally derided by the lean community. Kanbans are simply smaller EBQs, and hence you are still making to stock. “A better way”, he maintains,“would be to disable any Make to Stock functionality within an MRP/ERP system which would force the system to generate a batch for each order, at each level of the Bill of Materials. The APS software can then perform dynamic aggregation of batches to minimise changeovers by sequencing the smaller batches together to form a ‘big batch’ wherever possible. The fundamental problem with EBQs and Kanban is that the batch sizes are fixed in advance and then cannot be broken down. In today’s world the 'best' batch size is determine by the current product mix and delivery profile which can both change rapidly. To get the best tradeoff between minimising changeovers and delivery performance a ‘what if ’ tool like APS, which allows the impact of the dynamic aggregation to be seen, is essential to make the right decisions.”
For Graham then, APS and lean initiatives are complementary with APS providing a decision support tool to the planner to help eliminate non-value added activities and get deliveries on time. And with companies including Cosworth, Toyota, Foilex, Cash Bases to name but a few using Preactor to assist in differing ways with lean strategies, Hackwell’s view is more than just a theoretical one.
Jonathan Orme of Exel Computer Systems also takes the ‘both/and’ approach when it comes to lean and IT. Like Graham, he sees the starting point as the elimination of
waste, but adds an additional dimension. “At Exel we have long recognised that IT
systems, like manufacturing, can easily become cluttered with non-essential activity,
processes and even software. Our commitment to working with leading technology means we have long championed the idea of web enabled, browser based ERP solutions. At a stroke, this removes the need for client based software and systems which have become increasingly costly in terms of IT resource and maintenance, resulting in IT actually adding to a company's wasted energies.”
As a good example of IT and lean working in a complementary way, Jonathan cites Naim Audio which designs and manufactures high end audio and audio visual equipment. Naim faces a number of tough business challenges, the greatest of which is quality and ensuring a consistent supply of a hugely diverse range of quality components to last the considerable lifetime of each product. Another challenge is in the area of forecasting, the related area of stock levels of very high value goods that can easily be damaged and maximising resource efficiency.
As Jain Giles, Naim’s IT Manager comments: “We wanted to build a long term and secure working partnership with a system supplier, and not just a product.With Exel being the author of EFACS, an established product, we knew that we would have access to the most knowledgeable people about the system.”
The time since its successful go-live has been defined in two key ways:- a time of enjoying major benefits from EFACS and also a drive towards a leaner manufacturing methodology, the latter led by Neil Carden, Naim's manufacturing director appointed three months after the switch to EFACS. Neil's background is one of considerable lean/Kanban experience and he identified that EFACS could work in partnership with building a lean working environment. “It was clear that with EFACS, we now had much greater reporting at every level, especially on the financial side of the business.We also had much more information in terms of forecasting and how our supply chain extended into the future, up to 20 weeks and beyond.We were also identifying a lot of non-value added activity, wasted time in other words, and are now implementing greater use of Kanbans to help in this area. In this respect, we will be using EFACS in a more supportive role, primarily to update stock levels etc, in line with what's happening on the shop floor.”
Steve Whitehouse from SSL WinMan also points to the need to have the right technology in place in order to work in a complementary partnership with lean methodologies. “It’s all too easy to lose sight of the simple fact that IT is there to help, to do things not just more efficiently but also more effectively.With older technology, ERP systems could often be very heavy in terms of redundant functionality and therefore costly; they were also very inflexible in terms of keeping a close fit to the changing requirements of a company’s business model. Technologically advanced systems like our own, built completely on Microsoft .NET, offer levels of flexibility, customisation and business fit simply impossible before. This is invaluable when working hand in hand with a lean strategy because as soon as you have a system that can’t accommodate the demands made upon it by lean, it simply becomes another constraint.”
Steve also stresses the importance of the vendor’s understanding of lean principles in order to deliver a successful partnership between IT and lean and cites the case of the Magal Engineering group as a perfect example of this. The product of a
management buyout, the Magal group of companies has undertaken an ambitious program for manufacturing and business excellence. Central to this was the successful implementation of SSL WinMan at four different company sites in less than one year.
In the words of Magal's financial director Kevin Lowen, “We knew we were lean and mean in terms of manufacturing philosophy. Because of the volatile nature of orders and price-downs coming from Automotive OEMs, we set about cutting its overheads as much as possible. This included looking for an uncomplicated yet flexible software solution focusing on lean manufacturing.” He explains why SSL WinMan was chosen, “SSL staff have the required expertise in dealing with lean issues. They understand our business process and are fully conversant in the discipline of manufacturing.We had a need, they understood it, and supplied a solution and an advice/support package that fitted our requirements.”
In addition to a range of other benefits, Magal specifically benefited from WinMan’s virtual Kanban functionality. “We wanted to use the product as a tool to help us in our Kanban drive to reduce stocks,” comments Dave Downing, logistics manager at Magal company Western Thomson. He added that since WinMan went live Western had already saved around £1 million in inventory from improvements in business processes, which are now complemented by the functionality ofWinMan. The Kanban element within WinMan is focused on the supply chain, with the company’s suppliers being on WinMan's supply chain Kanban list, so they receive a weekly fax to tell them the quantities the company wants week by week. Dowding concludes, “WinMan is invaluable in producing works orders and tracking
them efficiently. And between these processes,WinMan helps us to control our Work in Progress (WIP) in a more lean, more effective way.”
Whether physical or manufacturing health and wellbeing, there will always be fads and competing voices for the latest ‘quick fix’ to often complicated problems.What this article shows is that when it comes to lean and manufacturing IT, not only can both work in harmony with each other, but in a number of ways to be truly lean actually necessitates the appropriate use of Manufacturing IT.