Lean Manufacturing and the ERP Inventory Management Software Solution

Since the introduction of the lean system ofthe heart of the building and utilization of successful
continuous improvement manufacturing (CI), theCI systems today.
desire has always been for inventory managementFor example, in the cycle counting mode, inventory
that minimizes stock on hand, if not fully eliminating it.managers can run inventory audit lists tagged to any
True to lean principals, by eliminating waste at everyperiod of time to answer the question of why there
turn in the manufacturing process quality is improvedare discrepancies in inventory numbers. As for
while production time and costs are reduced. As oneturnaround/turnover, ERP inventory management
of the "seven wastes" in lean philosophy, inventorysoftware is suited as an assessment tool for gauging
proves to be inefficient when a plant maintains morehow JIT any manufacturing system really is through
on-hand inventory than is minimally required tothe number of turns the inventory takes; and of
produce products in the immediate time frame.course, increased turns is the desired result of a lean
Rather than the batched, push-production systemsystem eliminating waste by the reduction of on-hand
where large inventories are maintained for theinventory.
potential of future sales or supply chain problems,Regarding supply and demand chains, inventory
lean methods employ a pull-production system wheremanagement through ERP software is able to review
orders are pulled from customers and raw material askey time-critical data to balance the time phasing
inventory is maintained only long enough to be sweptrequirements of materials, parts, and tools. That is to
into production-just in time (JIT), so to speak.say, with a robust ERP manufacturing solution,
Certainly, manufacturers today are seeking to beinventory managers are in the position to make
more productive and less wasteful with regards toinformed decisions concerning demand chains and
inventory management. For example, there is a trainsupply chains. This is especially true in the newly
of thought that by decreasing randomness in theemerging vendor managed inventory systems (VMI)
manufacturing process, you also decrease inventory.that are increasingly seen as the logical extension of
From this thinking has emerged the notion of totallean manufacturing methods and JIT inventory
enterprise resource planning (ERP). Here conceptsmanagement.
such as system flow, quality of performance, laborThese aspects of inventory management are vital
productivity, purchasing and materials management,elements for inclusion into any robust ERP software
inventory, and shipping are all integrated in terms ofpackage seeking the leaning of manufacturer
procedure and communication. With the real-timeoperations. With the knowledge gained through the
data available through ERP software, plantreal-time data available in ERP, inventory management
departments are integrated and coordinated towardbecomes a central point of analysis for finding
the goal of decreasing randomness in the productionadditional efficiencies in the system flow. It is in this
process.way that efficiencies in manufacturing eliminate waste
With a robust ERP software package, lean inventoryin the process. By offering the user a complete
management is facilitated in all aspects of theinventory management package that interconnects
operation and should include the important functionswith all other shop areas in the production process,
of: cycle counting, supply & demand, andintegrated ERP software builds a CI environment that
turnaround/turnover. In essence, it is this sort ofenhances both productivity and profits.
inventory management and efficiency tool that is at