7 ways to cut waste with ERP

April 10, 2018
7 ways to cut waste with ERP

Manufacturers always strive to eliminate waste and unproductive actions in their production. Lean manufacturing thought has made a huge contribution in this area by identifying the mostly likely seven types of waste along with their causes and consequences.

Software designers, in turn, have incorporated this understanding of waste into manufacturing ERP solutions. How can ERP for manufacturing can help you avoid the most common wastes?

#1: Transporting goods where and when they are needed Transport waste happens when you move items, parts, or materials from one area to another without adding value to the product customers eventually receive. You invest in operator skills and equipment or vehicles while keeping them from productive work. The right ERP for manufacturing solution can help you time production and logistics so you don’t needlessly move goods from one location to another. It also lets you schedule and track the use and performance of your transportation machinery and rolling stock.
#2: Allowing only productive inventory

 

Inventory of parts and materials or complete and in-process products incurs costs to make, ties up your warehouse space, adds to transport waste, and poses risks when it spoils, breaks, or becomes obsolete. Common causes of inventory waste are ineffective forecasting, production planning, or distribution. Manufacturing operations software can assist you in avoiding inventory waste with planning and modeling tools that support just-in-time production. No matter whether you mass-produce standard items or perform engineer-to-order (ETO) manufacturing, you can use ERP to eliminate unproductive inventory.

 

#3: Enabling efficient movements

 

Motion turns into waste when people and machinery in the production process have to move in such a way that it causes injuries, stress, damage, and wear-and-tear. Motion-induced waste can be the result of poor workstation design, miscalculation of takt times, and obsolete or flawed production line configuration. Today’s powerful ERP solutions for manufacturing let you design your processes to incorporate optimal takt times. They also can provide you with the data context you can use to collaborate with the maker of your machinery to make sure it is built and installed to work in the most efficient way.
#4: Ensuring continuous, productive workflows Waiting can happen anywhere in the organization for many reasons, but it’s always wasteful. People wait for information, decisions, approvals, other parties’ actions, materials, and more. Generally, waiting happens whenever employees lack the ability to act and decide, departments are not in sync, and bottlenecks stop or slow production. You can eliminate the miseries of waiting with manufacturing operations software that gives people access to the information they need and streamlines decisions and approvals with automation. The same ERP solutions also make it possible to coordinate cross-departmental handoffs and set up supply chain and production processes where nobody is forced to wait.
#5: Keeping the focus on value creation Over-processing makes waste, for instance, when you produce in excess of quality specifications without creating any customer value. Enforcing the use of machinery with advanced, but not always needed capabilities often results in over-processing waste plus delays and bottlenecks. Overly complex workflows can also lead to over-processing. Today’s ERP for manufacturing helps you steer your operation away from over-processing and toward the actions that truly create value. From the first customer quote to creating a bill-of-materials (BOM) and turning out the finished product, you can use manufacturing ERP to ensure that production performs to the right KPIs and customer goals.
#6: Making the products customers want, when they want them Overproduction waste means you manufacture more of a certain item than your customers need right now, or do it too soon, before it’s time to make delivery. This might happen because of poor supply chain management, inefficient procurement, unreliable demand planning, and many other reasons. Overproduction often results in transport waste as well. Modern ERP solutions for manufacturing, such as Microsoft Dynamics 365, minimize overproduction by giving you the visibility and control to align production, purchasing, and warehousing dependably with actual demand.
#7: Meeting quality commitments Defects waste resources and materials on products that don’t meet quality standards. Defects can lead to negative customer experiences and cost you customer relationships. In discrete as well as in process manufacturing, ERP designed for production operations provides you with the transparence and control to pinpoint quality deviations as soon as they become apparent and stop them from ruining your production.

The right manufacturing ERP solution can help you reduce waste while providing all the functionality you need. It can be easy to learn and use, with fast implementations and a short time-to-benefit.

As simple as these criteria might appear, they have long been hard to accomplish. Only recently has powerful manufacturing ERP – such as an integrated environment with Microsoft Dynamics 365 and To-Increase functionality – become easy to use, deploy, and administrate.

To learn more about what the best of modern ERP can help you accomplish, Download Our Whitepaper Manufacturing The Future.

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