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The dual implement of Lean and ERP in manufactureKeywords: ERP; Lean manufacture; Kanban; Centralized managementAbstract. ERP (Enterprise Resource Planning) and Lean manufacturing are two effective production control methodologies. This paper explains the interrelation between ERP and Lean Manufacturing, and discusses the mutual promoted effects. Particularly analyzes the main means to accomplish the dual implement of Lean and ERP in manufacture.1. IntroductionManufacture is being forced to compete in a global economy with increasingly complex challenges such as the varied and personalized market demand. This new economy has forced enterprise to become more responsive and effective in manufacturing operation. Both the Lean Production System (Lean) and Enterprise Resource Planning (ERP) systems have been proved to be enablers of “World-Class” production operations 1. Especially dual implementations of Lean and ERP, rather than the implementation of a single system has gained common recognition as an effective means to gain a competitive advantage in academic and trade journals. Article 2 considers that ERP and Lean can be balanced. Articles 3-6 state that ERP and Lean production boost each other. Article 7 discusses the importance of linking ERP and Lean methods and summarizes some of the key Lean toolsets that are offered in some ERP systems such as Oracle, TTW WinMan and Pelion systems. While how to combine Lean with ERP system, and how to enhance the capabilities of lean in an ERP system? Extant literature provides little guidance on this question. Its an attempt to study the question by this paper. This paper briefly discusses the relationships between ERP and Lean methodologies. It analyzes the specific measures to improve ERP system to boost lean. The combination between ERP and Lean accomplish more effective manufacture.2. About ERP and lean manufacturing2.1Enterprise Resource Planning (ERP) ERP systems are software packages which aim to integrate information from different areas of a business such as product planning, purchasing, inventory control, sales, financial and human resources. Its a method for the effective planning and controlling of all the resources. 2.2Lean Manufacturing Lean manufacturing is a mode of production aims to minimize the amount of all the resources used in the various activities and to minimize the cost of the management and running of the enterprise. An objective of Lean is indeed to drive out waste encompassing wasted time, activity, inventory and space, and to produce high-quality products at the pace of customer demand8. 2.3The interrelation between ERP and Lean Manufacturing Lean manufacturing adopts advanced producing and management concepts such as Just-in-Time (JIT), zero inventory and automation. Different from the push principle and a forecasted demand of the traditional ERP/MRP system, Lean manufacturing is really pull production driven by customer demand. Figure 1 represents the material flow and information flow in push production system. The production schedules of ERP/MRP Systems are based on forecasted demand, available capacity and buffer stock. And information from the master production schedule (MPS) flows downstream towards the finished goods.Figure1 Push SystemFinished GoodsProcessManufacturing ProcessPhysical Material flowInformation flowProduction planningRaw MaterialProcessBUFFER STOCKBUFFER STOCKProcessProcessThe goal of Lean Manufacturer is to produce only when the customer asks for goods, As shown in Figure 2, information flows from finished goods inventory (the customer), upstream towards the previous process, until raw material inventory and is usually visually conveyed by the use of a kanban.ProcessPhysical Material flowInformation flowFigure2 Pull SystemManufacturing ProcessCustomer demandProcessFinished Goods to CustomerProcessProcessKanbanKanbanPrevious Process StockThe Push of ERP and the Pull of Lean seems to be contradictory, actually its not the case. The comprehensive function of ERP supplies the enterprise with many effective management tools and related supporting technology to implement Lean manufacturing. Nothing but realizing a set of integrated planning system to Push the material requirements planning in ERP, Can advantage be created for the Pull of Lean. 9The dual implement of ERP and Lean is inevitable direction in the enterprises development. 3. The means of ERP system to incorporate lean capabilityHow to incorporate the two production control methodologies? This is a difficult problem, but its necessary for an enterprise to accomplish an effective and competitive manufacture. We should build Lean-related features into ERP system, let the two develop their own power and advantage, and supplement each other. We should endeavor from the following three aspects.3.1 strengthen the centralized management of data and informationThe goal of Lean manufacturing is to minimize the waste、lower the cost and reduce stock. So the management of the total supply chain is critical. Information flow and material flow is exactly managed by ERP system through integration, thus every single information island is connected. To implement Lean-enabled ERP successfully, we must strength the centralized management of all kinds of data and information in manufacture. As shown in figure 3, build centralized managing platform of data. Include two database: fundamental database、producing and operating database. Information is transferred and delivered among the database, custom and system. The two databases achieve the whole monitoring of material flow and information flow during the manufacturing process. Fundamental database includes the data of material information, machining process, BOM, manufacturing capability, standard cost rate etc. Producing and operating database includes the data of purchasing management, stock control, production control, quality control, sales management.etc.The integrated management of the whole data help the enterprise implement production based sales, purchase based need, and avoid production and supply each in his own way. So the waste of aimless purchase and unplanned getting materials is eliminated. This help to accomplish the target of Lean manufacturing.Producing and operating databaseProduction controlFundamental databaseMaterial informationMachining informationBOM managementcustomerThe centralized management platform of dataFigure3. the integrated management of data and informationOperation controlPurchasing managementstock managementSystem3.2 fuse ERP with kanbanProduction is forecasted and balanced through formulating plan in ERP. The issuing time of the materials plan is according to affiliation and quantity of all levels material, and based on production structure.While the forecasted consumption of material often has large discrepancy with the actual in metabolic environment. In order to respond rapidly to the varied environment and to enhance the accuracy of the plan, the interval of plan must be shorten, the plan must be revised timely, and the restraining factors such as capability must be considered. Thus make the plan tend towards the actual consumption. It needs to utilize the powerful function of computer, and make plans with client one by one. To get the ability of dynamic plan which reflects actual state, the tools of Kanban is helpful.As a kind of tools to delivery production information, Kanban records all kinds of information such as production quantity, time, method, orders and transport quantity, shipping destination, placing place and carrying tools. These informations trace from assembling process back to the previous process gradually. As seen to us, the material required information is driven by actual material consumption and pulled by Kanban gradually. Kanbans are used to trigger material and component replenishment, but the static trigger point is often limited by the lead times. This often leads to deficiencies of store. If replenish trigger point according to the variation of forecasted material consumption, the supplier of material will received Kanban ahead of time, reduce the probability of material lack. This is called trends Kanban. Its trigger point is based on forecasted consumption, although the material requirement is still generated by actual consumption. So it fuses planning element.So ERP schedule planning according to actual orders and forecasted sales. With the help of Kanban its planning become more accurately in the changeable environment. At the same time Kanban improve continuously according to demand. With the help of ERP to build its trends trigger to reduce leads time.3.3Build business process mixed by pull-based mode and plan-controlled modeOne task of ERP is to link up all the business point by means of building operation flow. As to Lean manufacturing, Pull is an important feature. The key for production to run is to build a set of correct Pull delivering system of information. The production of the whole system complies with final customers production demand. Its also to say that production is pulled by the customers demand, the systems beat reflect the customers demand fluctuating. At the same time, the centralized management of data and information combines tightly with the “Pull” production process, to accomplish the cycle of production process control during the production plan and manufacturing process.As shown in figure 4, ERP system make the master production plan by means of estimating potential demand accurately and analyzing market information. Get order production information from the master production plan. Then the system resolves the order production information, to get the material required plan. This plan can not only balance the ability of production, technology and quality but also delivery every links demand upward, until the raw material suppliers. At the same time, every link guarantee the next as required. Thus reduce the fund occupied by machining parts in all links during the production process. From the manufacturing data and selling information, system calculates the cost. The cost and the actual material consumption provide scientific guidance for the master production plans making.Figure 4.Lean-enabled ERP production flowcostmarketingThe information of order formdecompose the production plan of order form by the systemMaterial required planProduction and machining according to order formput the finished product into storageThe management of selling and deliveryforecastManufacturing dataProduction material stockMaterial procurementsupplierThe Master production planThe actual consuming material4 SummaryThe Push of ERP and the Pull of Lean seem to be contradictory, actually they have mutual promotion in manufacturing. Dual implementations of Lean and ERP, rather than the implementation of a single system has gained is inevitable direction in the enterprises development. The integrated management of the whole data by ERP helps to reduce waste and accomplish the target of Lean manufacturing. By means of Kanban, ERP makes plans more accurately in the changeable environment. At the same time Kanban build its trends trigger to reduce leads time with the help of ERP. Build business process mixed by pull-based mode and plan-controlled mode, thus accomplish the cycle of production process control during the production plan and manufacturing process. Through the above methods, ERP links with Lean, and develop their own power and advantage, and supplement each other. Create profitable condition for en
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