How APS is Helping Lean to Handle Volatility and get more Visibility
David Rourke, Lean Expert of Lean Scheduling
Lean Manufacturing has proved to be an effective strategy for companies who understand the need to remain competitive in today´s global marketplace. But what exactly is Lean and does information technology have a role in the Lean world?
Lean initially began as an adaptation of the Toyota Production System but the last few years have seen a growing number of perspectives emerge. Most definitions of Lean agree that the foundation of Lean is built around the concept of continuous improvement, focused on the elimination of waste from products and processes. Muda, the Japanese term for waste, is defined as anything that does not add value to the customer.
Studies have shown that most business processes are 90% Waste and 10% Value-Added Work. By removing waste from production processes, product cycle times are reduced, inventories are reduced, costs are lowered, and defects are eliminated helping companies to become more competitive. If 90% of most business processes are waste, what is considered waste and how does Lean eliminate waste?
Non-Value-Adding Categories of Waste
Lean has identified the below eight non-Value-Adding categories of waste:
- Unnecessary Transport
- Over processing
- Excess Inventories
- Unnecessary Movement
- Unused Employee Knowledge
Lean eliminates waste from products and processes by mapping and evaluating value streams. A value stream is defined as the sequence of activities required to produce a product that has value. Waste is rooted out of these value streams using the method of continuous, incremental improvement called Kaizen.
Lean practitioners realized that there were also major opportunities for Lean to address operational sources of waste such as Overburden (Muri) and Unevenness (Mura). Muri and Mura generate production bottlenecks that contribute to overproduction, waiting and excess inventory.
Lean continuous improvement methods led to the development of manual Lean scheduling techniques such as Heijunka (demand leveling) and Kanban pull based replenishment and scheduling). These techniques were designed to smooth the demand on upstream processes and suppliers by balancing the utilization of resources.
Unfortunately, many of these manual techniques are unable to keep up with the high levels of change brought on by today´s demand driven world.
Replacing ERP with APS
Obsolete ERP planning and scheduling functionality that are no longer compatible with Lean, are being replaced by Advanced Planning & Scheduling (APS) systems that can enhance Leans manual scheduling and replenishment techniques. APS is proving to be the perfect tool to integrate Lean processes with the rest of the organization. Seamlessly synchronizing production schedules and the flow of material while streamlining the flow of data throughout the entire supply chain, provides Lean operations with the visibility they currently lack.
For many reasons, early Lean thinking was dismissive of software and technology, but an Aberdeen Group study has concluded that “…many manufacturers have taken some of Lean’s principles such as simplification too far and are missing critical benefits that software and technology can bring in systematizing and sustaining Lean methods in the organization”.
Lean practitioners need to find innovative ways to take Lean to the next level and remain competitive. The Lean definition of waste being anything that doesn’t add value needs to be applied to Lean’s own dependency on manual techniques. APS solutions are just one example of how information technology can improve Lean. Lean practitioners like to ask tough questions, but they should also be prepared to answer some. If technology can help improve Lean visibility on the shop floor and improve the way that Lean deals with high levels of change, then they need to explain why it should continue to be overlooked.