Discrete manufacturers face constant pressure to deliver a quality product on time, every time. Economic fluctuations, compliance mandates, skilled labor shortages, and the ever increasing costs of operation are only a few of the complexities manufacturers face every day.
Commonly it is found that owners and senior executives of small to mid-size manufacturers achieving higher levels of process consistency and operational excellence share the following characteristics;
- They have developed a business blueprint, or what most call a Strategic Business Plan.
- They have a clearly define Organizational Structure that is shared with and know to all employees.
- They have developed Operational Support Systems combining the benefits of Lean and the Power of ERP. The objective of these systems is to support and make efficient all the activities of the organization.
- They have established Training and Job Enrichment programs as well as incentive compensation plans that are designed to encourage each associate to improve and contribute.
- They Reward Performance by rewarding those who consistently contribute to continuous improvement and positive results. Most importantly, it also disciplines those who deviate from acceptable behavior. Positions, tasks, duties and responsibilities are defined and communicated and performance is routinely measured.
Setting the foundation in place!
A Strategic Business Plan clearly describes the business concept, the business mission and the owner’s or company’s philosophy of business. This document also sets forth personal and corporate goals with specific timelines and the recommended strategies to achieve them.
The Organizational structure must include all the company’s policies and procedures as well as the positions, tasks, duties and responsibilities of the employees. This should be designed to encourage all employees to perform to their utmost capabilities and carefully communicated throughout the company at regular intervals.
A Seamless Collaboration!
The Operational Support system has a significant impact on how training and job enrichment programs as well as the performance reward programs are structured. Well structured, they also relieve management of many day-to-day routine activities, giving owners more time to be strategic thinkers.
Lean, a western adaptation of the Toyota Production System (TPS), is often considered to be an efficiency and productivity improvement practice. But the true TPS philosophy is founded on the singular focus of value added. To become Lean, a company must take a hard look at processes and practices to identify those things that truly add value for the customer and eliminate those that do not. The continuous pursuit of waste elimination is the essence of Lean. Production processes and activities alike can be directly addressed in this value vs. non-value added campaign. And it does not stop there! Lean can and should extend beyond the shop floor. Indirect activities such as logistics, administration, engineering, and warehousing, as well as other non-manufacturing activities can benefit as much from Lean thinking.
As Lean thinking has evolved and the concepts broadened, Lean advocates have come to recognize that Enterprise Resource Planning (ERP) and Lean work together very well – each supporting and enabling the most important objectives of the other. Likewise, leaders in ERP technology development today advise enterprises to recognize the fact that the manufacturing world is getting…Leaner.
In essence, Lean becomes the culture or behavior of the company and the ERP system become the central nervous system by which the company responds. With the ERP system carrying the definitions, the data, a record of the activities of the organization, and providing the measurement system for determining where opportunities for improvement lie – it also provides the measuring progress of efforts to know where to effectively apply Lean to further reduce and eliminate waste.
Caution – Don’t “go it” alone!
Reaching out to a trusted business improvement partner to realize your full potential has become a natural response for many small to mid-size manufacturing companies. Lean and ERP deployments alike require extensive system knowledge and strong change management skills to achieve success. Business improvement partners with expertise in both Lean and ERP will ensure conflict does not become a roadblock to achieving excellence.
About the author: Michael Canty is the Business Unit Director for Synergy Resources Business Performance Solutions group. Throughout his thirty plus years of service he has used his vast business knowledge and by applying various strategies, technologies, tools and methodologies, helped a large number of manufacturing companies develop and implement effective business strategies and processes leading to improved operational performance.
About Synergy Resources: Synergy is a privately held company headquartered in New York that has partnered with manufacturing companies for more than 20 years. Synergy specializes in providing products and services to help improve the overall business performance of manufacturing companies. With offices throughout North America, Synergy has more than 90 industry tested employees supporting 700+ customers.
Synergy’s Business Performance Solutions team provides strategic business planning services and advice to executive level management teams. The Professional Service team provides ‘best practice’ operational and financial services, supports software application training and deployment, and delivers hands-on Lean, TOC (Theory of Constraints) and Quality services.
Synergy’s Project Management Office (PMO) provides dedicated project management support to oversee our Clients programs and projects to ensure scope is maintained, schedules are achieved and budgets are managed. The Technical Services Group administers Synergy’s Cloud hosting program, supports product installation and data migration needs and has a dedicated programming team that develop ERP product extensions to support customer needs.