How less can make more: Growth through smarter, leaner operations
Lean Manufacturing: Simplifying for Success
Every company’s aim is to achieve growth – that’s their reason for being. How to achieve it, of course, is another matter. Here’s how focusing on efficiency through smarter ERP systems can generate more output with the same or fewer resources, confirming that less actually can make more.
Lean manufacturing isn’t just a methodology; it’s a culture change across your business – a commitment to operating without waste. This focuses on enhancing product quality, reducing lead times, and ensuring higher customer satisfaction while utilising fewer resources. By incorporating an ERP system, manufacturers can gain real-time insights into production processes, identify waste, and continuously implement improvements that align with lean principles.
One of the best examples of lean manufacturing can be seen in Toyota's world-famous production system, known as TPS. The core principles of TPS include lean manufacturing, a focus on 'Just-In-Time' production and 'Jidoka' (automation with a human touch).
In practice, Toyota meticulously organises the shop floor to increase efficiency and reduce waste. For instance, vehicle parts are delivered exactly when they are needed on the production line, reducing the amount of stock that Toyota needs to hold. Furthermore, they encourage all staff to improve the production process. Workers can stop the production line if they notice something that could compromise quality or create waste, addressing issues right at the source to prevent defects and overproduction.
This not only allows Toyota to maintain high standards of quality but also ensures that production is as cost-effective and efficient as possible, leading to increased customer satisfaction along with reduced operational costs. This is demonstrated by the fact that What Car ranked Lexus (owned/manufactured in the same factory) and Toyota as first and second place in their 2024 reliability survey, with Lexus having topped the charts for seven years in a row.
Just In Time – Synchronising purchasing, stock control, and production
The Just-in-Time (JIT) philosophy—delivering the right items in the right quantity at the right time—is core to lean manufacturing. Its success hinges on precise coordination across purchasing, stock control, and production planning. ERP systems play an important role here by pulling these critical functions together. They enhance visibility, allowing for accurate forecasting and scheduling which minimise the amount of stock they need to hold without jeopardising production. This synchronisation not only reduces the amount of money tied up in stock but also aligns perfectly with lean objectives, stripping inefficiencies and promoting a seamless flow of goods. A reduction in stock means that there’s fewer items to move around your facility, requiring less time and effort from your staff.
Increasing output with your existing workforce
In manufacturing, logic suggests that in order to scale your output you need to hire more staff, linear to the amount of planned growth. This doesn’t need to be the case. ERP systems allow departments to amplify their productivity without expanding headcount. By automating routine tasks, removing the duplication of data entry in different systems and reducing the errors that can come with this, the workforce can focus on more strategic initiatives that drive growth. Furthermore, the enhanced data visibility that ERP provides enables staff to make informed decisions swiftly, increasing their ability to act on opportunities and solve problems more quickly.
ERP: Allowing your staff to focus on more productive tasks
ERP lies at the core of achieving a leaner and more efficient manufacturing process. By providing live analytics and automating operations, ERP becomes the backbone and common thread connecting all departments across your business. The ability to grow with the same resources is a natural by-product, allowing your staff to concentrate on more creative and profitable tasks, rather than fire-fighting the day-to-day problems caused by inefficient, disjointed systems.
Summary
The journey towards leaner operations through strategic ERP implementation is not just about upgrading technology—it's a company-wide cultural shift towards smarter manufacturing. As companies aspire to optimise operations, reduce waste, and enhance productivity, they find that investing in the right ERP system doesn't just change the way they operate; it changes the way they compete. In the quest for operational excellence, less indeed does make more.