Kaizen: A Marvel Solution for the Manufacturing Industry

In Japanese, “Kaizen” means “Continuous Improvement”. In simple terms, it means a continuous effort to enhance the quality of products or services offered by a business. It is all about making positive changes in a systematic manner to bring about qualitative improvement in a process. Kaizen could involve small strategies as well as key decisions in an organization.

The most important step for any business organization is to realize that all the processes can be improved upon, and the existing way of conducting business always has a scope of improvement in terms of efficiency and performance.

An ERP consultant like Synergy Resources advocates the fact that Kaizen helps create an environment that is rewarding to everyone involved. They believe in process and product improvement by leveraging employee creativity.

Kaizen is a process that manufacturing industry players must make use of to ensure the following:

  • Employee growth – It is all about teamwork, and when every employee feels that they are a part of the company’s growth, then this boosts their morale. A direct result of this is increased efficiency and long term growth of the company. Kaizen helps all employees work towards a common business goal and create a business-friendly culture.
  • Business improvement – As Kaizen stresses the role of employees for continuous innovation and implementation. The employees stay motivated to see how their efforts reflect in the results. Organizations that meticulously implement Kaizen principles see results such as timely service delivery, efficient management of all internal processes, reduced costs across various departments and the least number of customer complaints.
  • Enhanced safety – By practicing Kaizen solutions across their business, managers can ensure safety and security in a manufacturing plant. Things such as better equipment control and management contribute to better working conditions. Decision makers also consult employees at the grass roots level for their suggestions on how to have a safe work environment without accidents and injuries. Many times employees are asked to submit ideas that can improve a manufacturing process. This goes a long way in reducing the instances of injuries and accidents on the production floor.

In case you want to reap the benefits of the Kaizen principles and practices, you can get in touch with the specialists at Synergy Resources. They help by guiding their clients to deploy the right ERP system in a planned and appropriate way to add value to their operations.

The highly experienced and well-informed professionals of Synergy Resources can help your business perform more efficiently through optimal utilization of resources such as employees, finances and time. The company can advise you on the best ways to ensure a continuous improvement. Connect with them online or call them to know more about Kaizen.

Synergy Driving Performance Improvement

Synergy uses LEAN/TOC/SixSigma principles in conjunction with implementing ERP to drive performance improvement throughout the company.

Below are two articles from a new Synergy customer’s employee newsletter, one in February, the second in March.  They actually created their own internal logo to generate enthusiasm, buy-in and excitement in their company.  Look at the picture of their conference room with all the process mapping complete.   Even before their ERP software is installed on their network, they can already see how it will be used to support their new processes that will drive improvement in their business’ performance in a big way!

Process Mapping Underway with Synergy Resources

Our journey to replace MAX with VISUAL has begun! Already dozens of employees have been involved in the process mapping phase. This is where our consultant from Synergy Resources creates a map of every single step we perform to complete a process, such as issuing a quote to a customer (you might not believe how many separate steps this takes and how many documents we print along the way!). For each process, employees who provide inputs to that process, handle the process, and are at the next stage – i.e. the “customer” of the process, are included in the all-day sessions. Next, we identify approximately how long the “current” process takes in days (or hours). Then the fun begins!

The next step is to outline what we would like the “future state” to look like. And it’s amazing to see how many individual steps we think we can cut out and how much time will be saved. Along the way, our employees are identifying opportunities for improvement that may not need to wait for the software implementation and/or could be considered as continuous improvement ideas for the future. Once everything is reviewed and approved, the folks at Synergy will use the current and future state process maps to set up the new software for us and we will create some Kaizen events to brainstorm ideas on what improvements we can make now, and along the way. An example of a Kaizen event might be to look at the Expedite process – the way we currently ask for estimated or requested ship dates.

We have about 3 more weeks of process mapping ahead. Thank you to everyone for being so helpful and for taking the time necessary to complete the process maps. Together, we’re turning over a new leaf with VISUAL. Successful implementation using Lean principles, will lead to Green in 2014…in the form of increased sales and profitability! $$$$$$$$$$$$$$

Our project leader and I will be coordinating the continuous improvement opportunities. Feel free to ask either of us questions any time.

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Visual Employee Kick-off Meeting

Process mapping is complete! Check out all the hard work of our Process Owners in the conference room photo below and come learn more about what Visual ERP will do for [our company] at the employee kick-off meeting this Thursday at 9:00am in the cafeteria. Refreshments will be served.

ConfRoom_process_maps

Giving Up the Crystal Ball – Enough is Enough

If driving actual production from a forecast is insane, what should we do instead?

Not using some plan for production would produce even worse results.  How about this?  Let’s stop being afraid of not having enough.

MRP logic, using time-phased netting techniques, begins with whatever quantity we happen to have on hand of an item, adds in existing supply orders, subtracts out existing and predicted demand and predicts when the future on hand balance will dip below zero.  At these critical points, MRP recommends orders to increase supply to prevent the future on hand balance from going negative.  It is designed to prevent the state of not having enough.  This is a fear-based approach.

The biggest fear of material planners in the 1960’s was kitting a complex assembly and finding out they were short even a single part.  If you don’t have ALL the parts, you can’t make it!  This fear was so deep because such shortages were not an uncommon occurrence.  Material planners routinely stashed expensive parts in their desk drawers “just in case”.

The designers of MRP acknowledged both this fear and the fact that predictions of future supply and demand are unreliable in their design, with the inclusion of “safety stock”.  This single data field in the part master is a “fudge factor” that tells MRP to order more when the future on hand balance dips below the safety stock value.  The assumption being that this single, constant quantity will give us sufficient additional quantity on hand to make up for all of the inadequacies of the planning method.

Safety stock is a number that is usually increased and seldom decreased.  Very few planners take the time to re-visit safety stock numbers, unless they run out of a part.  Then the number is updated to a larger quantity to make sure the shortage doesn’t happen again.  Memories of painful consequences when they ran out discourage them from lowering that number.  With so many items having safety stock numbers that seldom get lowered, is it any wonder many companies carry excess inventory?  It’s easy for the folks in accounting to say we have too much inventory.  They never feel the pain of running out and they don’t have to decide which items to cut and by how much.

I propose thumbing our nose at fear and using a confidence-based approach. Instead of starting our planning with whatever we have on hand at the moment, we begin our planning with a starting quantity for each item that is enough to protect us from running out until we can get more.

We begin our journey through the dangers of unpredictable supply and demand toward the goal of on time delivery of everything with our shields of protection at 100%.  As we proceed, our shields are diminished by actual consumption, real demand rather than forecast demand.  When protection remaining crosses a critical threshold, our command center tells us to order more.  When we react to these signals in a timely manner, additional supply arrives in time to prevent us from ever reaching 0%.  We never run out.

In this approach we never have too much of any item, therefore we never have too much inventory in total.  Because we have defined for each item how much enough is, our command center recommends that we order a quantity that gets us back to 100% of enough and no more.  Enough is enough to prevent us from running out.  Too much is more than enough.  We never have more than enough.

So the trick to never running out and never having too much is to define and begin with enough.  Enough is not going to be a single, constant quantity for each item because actual usage is both unpredictable and variable.  So how much is enough?  Come back soon for my next blog post.

Are you growing for growth’s sake?

Growing, of course, is much better than the alternative, but when we are in growth mode, we are often so satisfied (perhaps even thrilled) of that specific direction, that we fail to keep an eye on the bigger picture and the bigger question – is our growth enabling better performance, or hindering it? Are we experiencing growing pains such that our customer service metrics – delivery performance,customer response time, product quality – are all suffering as a result of our company’s rapid growth? Is the profitability of the company also growing in relation to revenue?

Companies that focus on top-line revenue growth at the expense of operational efficiency, may find that the perceived improvements being made aren’t necessarily translating to their overall purpose of better serving their customers and not contributing to as high a stakeholder return the process.

Can a manufacturing company maximize top-line revenue growth while at the same also increase the bottom-line percentage for the best of both worlds?

We certainly think so, click here for the whitepaper and find out why

Why Is Lean More Popular Than Six Sigma And The Theory of Constraints?

I think there is much more in common between Lean and the Theory of Constraints (TOC) than we’d like to admit. As big and broad as Lean is, the real benefit of implementing it the right way attacks the same problem with the same benefits as TOC.

And that is in the Value Stream of the Supply Chain. In fact, if you read “Lean Thinking” by Womack and Jones, the first several chapters discuss exactly this: the tremendous opportunity most manufacturing companies have because they are still manufacturing like we were all taught we were supposed to: Optimize local efficiencies, and maximize people and machine utilization, by processes work in batches. Big batches. Keep people and machines as busy as possible, and by gosh, if material is available, get it out on the shop floor, because the faster we get material out on the shop floor, the faster it’s going to come out as finished product, right??

Unfortunately, no.

Both Lean and TOC address this problem in fundamentally the same way: by implementing “pull” of (ideally single-piece) material, instead of “push”ing batches out to the shop floor, in essence, holding back on the release of material until it is necessary to feed the cell or bottleneck resource.

TOC implements Drum-Buffer-Rope (DBR), which by definition attacks this problem head-on. I think a lot of Lean implementations get stuck in 5S, or stop with one or two Value Stream mapping sessions. If you don’t get to the Value Stream Mapping session where you’re including the bottleneck resource, you won’t see the dramatic benefits as outlined in Lean Thinking.

It’s true: Lean is MUCH more popular than TOC. And it has been for a while. When we released our implementation of DBR in our ERP system VISUAL, it was initially called VISUAL DBR. But then we realized from a marketing standpoint, wasn’t going to fly, so we renamed it VISUAL EasyLean  (http://synergyresources.net/products/visual-scheduling/)

But what it really is, under the covers, is DBR, or Simplified DBR, attacking that usually very big opportunity for improvement. To determine HOW big that opportunity is, like in Lean Thinking, we ask a manufacturing company:

1. What’s the lead time you’re quoting customers for your product? (typically, 6 – 8 weeks)
2. What’s the actual touch-time (direct value-added steps in Lean terms) to make that product assuming any and all material, tools, fixtures, machines, people are at the ready?

Answer: typically “a couple/few days”, sometimes “hours”!

There is so much opportunity out there.

Why Everything You Know About ERP is Wrong

ERP has been the backbone of manufacturing IT for so long that it has taken on its own myths. The trouble is that these myths are now ‘accepted wisdom’, despite being anything but acceptable or wise. Destruction of these misconceptions is long overdue.

Misconception 1: ERP is costly
“For manufacturers with multiple sites, subsidiary companies, international facilities and specialized production processes, connecting systems into an ERP framework soon builds to the point where rip and replace seems the easier option. For those looking to invest first time around, the costs of an ERP expert to analyse and align business processes to match the ERP system and train employees is prohibitive.”

This is simply not true. The technology to connect disparate systems and deliver the information in a clear, meaningful manner is already available. It does not matter if these are cloud, hybrid or on premise so the lower upfront investment options of cloud computing are there for manufacturers looking to expand or invest for the first time. Expensive ERP expertise is a thing of the past. Dashboards and analytics based on familiar, industry standard platforms have replaced complex proprietary options.

Misconception 2: ERP is complex and always results in projects running over time
Manufacturing is a complex industry. Research shows this will only increase. Analyzing business processes and developing software to automate them should eliminate complexity but when it doesn’t, we have to throw time and resource at the project and use brute force to crack the nut.

Now we know better. Firstly complexity is no bad thing – it is a mirror of the business. It enables operational precision and commercial opportunity. But complexity can inhibit innovation so focus on making processes tight and lean before they are automated. As a result, an ERP implementation delivers value earlier and is completed quicker.

Misconception 3: ERP implementations are invasive and disruptive
Connecting the mass of data and information to deliver a working ERP system is a huge task. It is dwarfed only by the ongoing use of ERP that demands software upgrades, training, security patches and a lot more besides. This is a huge drain on the resources of the company.

Wrong again. Intelligent deployment delivers consistent, meaningful information to the end user regardless of the deployment method, so a business can be up and running with ERP in days. A modular, event driven approach means manufacturers can get the capabilities needed in the order they want without disrupting other areas of the business.

Misconception 4: ERP vendors are inflexible and notorious for their lack of support
Some software vendors can disregard the pains of manufacturers, ignoring the realities of budget and IT resource limitations as well. Believing that the software is always right, business processes have to be changed and people retrained.

Well I cannot speak for others but not at Infor. We spend thousands every year researching the issues and challenges facing manufacturers. We spend millions developing solutions to help solve these problems and we are in this for the long haul. That goes for both the software and services.

So why have these myths never been slain before? There are many possible reasons but I believe it is because manufacturing has rarely dared to think differently. Thankfully, this is now changing. Operational directors are not just accepting what the software industry tells them they can have.

Savvy manufacturing leaders now start with an outcome – for example a 20% cost decrease – and ask software vendors what they can do to make it happen. Thinking differently, daring to push manufacturing technology beyond current limits should be encouraged. Destroying myths and accepted wisdom will be a hallmark of those manufacturers set to succeed.

More on Selecting ERP

Why Are A Handful of Leaders Better At Performance Improvements?

Assuming you have effectively answered the 4 questions that every business must continuously ask themselves during and after setting the company’s strategic plan and objectives:

  • “Why” is it important to change now?
  • “What” must improve & what will it mean to our business?
  • “Who” will need to be involved in the execution?
  • “How” will we achieve the stated objectives & how will we measure success?

Then the answer to your question is somewhat simple: You should focus on alignment and visibility.

From the high level strategic plan, a strategic plan must formed for each department and it must align with the company’s overall vision and objectives. Failure to align these plans to the overall vision and objectives of the company will stall or halt progress, Then the management tools must provide visibility of how day-to-day activities support the each department strategic plan and contribute to the company’s overall goals and objectives. Finally, there must be a concentrated effort by management to constantly monitor at both the strategic and operational level to ensure that decisions being made and projects being executed are aligned with the strategy.

What must be overcome is that many companies today are very reactive and focus on the next week, month or quarter. This causes them to lose sight of the long-term strategy. As a result, the strategic plan is no longer practical as progress will be obstructed. The most important part of a strategic plan is alignment and visibility. When the day-to-day management systems are not linked to the strategy then managers (and employees) are not considering strategy when they make decisions. In this case we cannot expect to see progress.

In conclusion, if the long-term strategy begins at the corporate level and if each department contributes their own long-term strategy which supports the overall business strategy and our daily activities are aligned and visible then it is likely an organization will see rapid change that is stainable over time.

More info: http://synergyresources.net/consulting/strategic-business-services/

Sherwood Turns Up The Heat With VISUAL ERP

With Integrated Financials, KPI Dashboards and streamlined Material Planning and Operations, Sherwood will really be turning up the heat with VISUAL ERP.

Sherwood IndustriesSynergy Resources today announced that Sherwood Ind., a Victoria, BC-based manufacturer and distributor of wood pellet stoves and barbeques has selected VISUAL for their ERP initiatives. With plans to streamline operations, and enhance customer service, Sherwood becomes another of the hundreds of Canadian manufacturers securing their future with VISUAL.
During their extensive 12 month ERP evaluation, Sherwood reviewed many popular offerings including SAP, MS Dynamics NAV, Industrios, Job Shop and Epicor. VISUAL was the only system that combined all the integrated manufacturing and operational functionality needed, without the risks of an untested, ‘bleeding edge’ ERP.

About Sherwood Industries
Sherwood Industries Ltd. is the manufacturer of the ‘Enviro’ brand of heating products. We are located in Saanichton (approximately 16km north of Victoria) on Vancouver Island in British Columbia. Sherwood Industries has an extensive manufacturing facility where we employ cutting edge technologies such as CAD (computer aided design) and a state of the art steel cutting laser, all designed to give you the best design for your home with the highest standards of engineering.Since 1988, Sherwood Industries has been a leader in its field producing high quality gas, wood, and pellet appliances.
More on Sherwood Industries

“As Sherwood continued to grow, legacy systems were not meeting our information needs. We needed a system that supported our current growth, as well as optimize our business improvement changes,” said Steve Davis, Sherwood’s Production Planning Mgr. “We selected VISUAL because it includes more ‘out of the box’ functionality than any other system we reviewed. VISUAL was the only system that all our key players agreed upon.” “Advanced tools such as EPAK (automated SOP/user documentation creation and training tools) will help us keep up with our ever evolving processes.” As Sherwood’s products are distributed worldwide, they needed a financial solution that accommodated multiple currencies at both ends of the supply chain. VISUAL’s Financials module is completely integrated with operations and meets their accounting needs today and into the foreseeable future.

At the click of a button, real-time data will not only assist customer service with VISUAL’s user-friendly CRM, the Advanced Material Planning system will also help Sherwood ensure they are carrying the right inventory mix at the right time. And VISUAL’s real-time material planning tools will help reduce both raw and finished goods inventory.

VISUAL ERP quickly converts customer requirements into manufacturing requirements and then executes them efficiently. Lean concepts eliminate redundant or wasteful steps that users may be forced to go through with other manufacturing software.

It provides a compelling visual presentation that shows how each part of the manufacturing process relates to the other parts-helping to resolve bottlenecks, schedule effectively, and price jobs accurately.

It supports manufacturers mixed-mode production strategies, including engineer-to-order, make-to-order, assemble-to-order, and make-to-stock; and it displays all key statistics on a single screen, helping ensure that schedules are met, materials arrive on time, and costs are in line with estimates.
Targeted at small to midsized manufacturers, VISUAL includes core capabilities that will optimize Sherwood’s organizational resources, strengthening its competitive positioning. VISUAL supports Sherwood’s entire business lifecycle, from planning to producing and shipping. With the use of VISUAL’s intuitive user interface, it handles all operations including, CRM, material requirements planning, scheduling, costing and manufacturing execution.