Monday, March 02, 2009

Giving ERP Systems the Finger

Anyone of us in business today that has to deal with ERP systems knows that while these systems are meant to make life simple for us, it more times than not works in the opposite direction. We are constantly battling to schedule our work to match our customer requirements based on the output of our computer system. To borrow a quote by Japanese NUMMI leaders as reported on Curious Cat blog, “computerized inventory systems lie”. Regardless of all our efforts to keep current and accurate information fed into the mouth of the computer ERP system beast, our computer system never matches the dynamic, real (physical) world. In my experience, it’s true that computerized inventory systems lie.

This is a visible problem. What are our choices?

We could run through the PDCA cycle and put as many countermeasures into place as required until the problem is fixed. We could improve the training of all our associates to insure that we follow the system as designed. We could buy another ERP computerized system that is more adaptable, flexible or customizable to fit our needs. Or we can just give our ERP system the finger and try a different approach.

The latter approach is exactly what we are trying to do as seen in the picture above from our lumber fabrication facility. Of course, by finger I mean just a visual indicator of our FIFO flow. Not the other finger as I may have intentional led you to believe. It is just part of our lean focus in making our parts flow using simple visual means instead of using ERP solutions within the plant.We even have started using the whiteboard scheduling approach in our dry lumber storage before cutting. The whiteboard approach has been recommended many times in the past by Kevin Meyer at Evolving Excellence. (Hey Kevin, so far, so good!) The goal is to make it simple and visual. It is still early so I’ll wait to share the results until after we stabilize and sustain our new process.

Although we have been dabbling with Kanban systems and other visual management techniques for many years, we have never really committed to pushing ourselves to making this visual management system of material scheduling and inventory control a major part of our culture. No excuses, we just had other improvement opportunities to go after that we thought were simply more important.


Anonymous said...

Great job! We've been running a multi-plant HMLV company with white board scheduling for a couple years now, and I think most people would quit if they were forced to spend days reconciling "the beast" again!

Anonymous said...

I like the board but we don't always have to give ERP the finger.... just keep it in its place.

We have been implementing a board similar to yours, split into 24 hourly slots for 23 presses and 1000 tools. We have moved from a 3 day firm schedule by press to loading the presses for just 4 hours ahead, reducing WIP by 90% and taking lead time from over a week to less than a day.

At the same time we introduced bar code reading to reduce the quality recording the operators have to do and have used the same data to feed the beast with the issues and receipts for stock control.

The whole thing has been pretty sucessful but the real change has just started as we are making real progress in leveling to load. We are doing this in the ERP system with a little help from Excel. We now give the guys in the factory a fighting chance to deliver what is required, in the right order, and we have an early warning system if the load just wont fit.

We also need to use the system to maintain our purchasing of raw materials... distance and batch sizes make anything else tricky.

Yes - get rid of shopfloor MRP.... but remember ERP can have its uses elsewhere.

Mike Wroblewski said...

Thanks, Kevin.

Mike Wroblewski said...

Hi Chris,

I shamelessly used this title to grab attention and express what most of us feel when using our ERP systems. You have a point on keeping ERP in place and ditiching the main source of our pain in the shopfloor MRP segment-given the current situation. We are heading in that direction.

However, if we challenge ourselves and think, maybe we don't even need ERP systems for purchased parts. As you pointed out, distance and batch size make it tricky. As lean thinkers, we should look at ways to remedy the monuments of distance and batch size, right?

Thanks for adding you point of view and great job on your outstanding results!

Redbone said...

ERP the finger? Maybe the "other finger" should be given to the no talent consultants working for the ever-name-changing-to-protect-the guilty firms that dotted the implementation landscape back in the 90's and early 2000's. ERPs, when properly implemented, are a necessity to global companies where sharing of information is critical (note the properly implemented clause). I think the root cause here is the absence of LEAN thinking/training prevalent in the IT industry in general. The first order of business in these implementations should be to define the current state, id waste, develop the future state and configure the ERP around the process, not the other way around.