The Little Geeni

This article is also available on our website: PROACTION – Generating Best Practices. It is an excerpt of a paper originally written by George Miller, Founder of PROACTION. It has been modified and updated by Paul Deis, PROACTION CEO.

Introduction

Some pundits have opined that ERP (Enterprise Resource Planning) or ERM (Enterprise Resource Management) is dead and that Lean replaces it. That’s like saying that the car chassis is replaced by the new engine. ERP is the backbone system of a modern enterprise. Lean is a management philosophy, with supporting tools and techniques to run a business much faster, cheaper—better. They are NOT mutually exclusive, but Lean ERP must differ from the traditional approach. The chassis needs some design changes.

Is ERP Obsolete? Points to be Made:

• ERP has evolved considerably and has almost ceased to exist as we knew it years ago

• Lean and newer ERP can coexist

• Lean still needs an IT infrastructure- ERP can help provide it

• ERP is compatible with Lean, but software vendors need to improve lean features

• Industry needs to learn to use ERP better to support Lean

Contents

• Lean ERP: Not an Oxymoron

• ERP Definitions and Evolution

• EPADSIG Body of Knowledge Areas

• Lean Definitions

• What are Customers Looking For?

• Lean Aerospace Initiative

• Lean Principles

• ERP Weaknesses

• ERP/Lean Enterprise

• Summary Functional Requirements

• Conclusions

DEFINITIONS

The evolving definition of ERP …

“An accounting-oriented information system for identifying and planning the enterprise-wide resources to take, make, ship and account for customer orders. An ERP system differs from the typical MRP II system in technical requirements such as graphical user interface, relational database, use of fourth-generation language, and computer-aided software engineering tools in development, client/server architecture, and open system portability.”
– APICS Dictionary 8th Ed

I always thought that was a very poor definition. Don Frank agreed with me and offered a better one at an EPADSIG (APICS Engineered Products and Aerospace/Defense Specific Interest Group) presentation. It was subsequently adopted in newer APICS dictionaries.

APICS newer definition of ERP:

A method for the effective planning and controlling of all the resources needed to take, make, ship and account for customer orders in a manufacturing, distribution or service company. – APICS Dictionary 10th Ed.

That definition is very valid for a Lean environment. What isn’t valid is the design of most ERP software and management systems to utilize it.

Lean Definition 1:

Lean Production—A philosophy of production that emphasizes the minimization of the amount of all the resources (including time) used in the various activities of the enterprise. It involves identifying and eliminating non-value-adding activities in design, production, supply chain management, and dealing with the customers. Lean producers employ teams of multiskilled workers at all levels of the organization and use highly flexible, increasingly automated machines to produce volumes of products in potentially enormous variety. It contains a set of principles and practices to reduce cost through the relentless removal of waste and through the simplification of all manufacturing and support processes. Syn: lean, lean manufacturing. – APICS Dictionary, 9th Ed.

Lean Definition 2:

A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection. – The MEP Lean Network

Lean Definition 3:

Perform in the Optimum Value-Added Manner Each Step of the Delivery Process for a Product or a Service to Optimize the Total Value Chain.” – Dr. Dan Shunk, ASU

Lean Definition 4:

Set Up and Run Processes to Minimize Defects, Time, Cost/Investment, While Optimally and Profitably Serving Target Markets. – George Miller, PROACTION

Lean is a business philosophy, not just techniques. Lean means doing things as simply and cheaply as possible, while providing superior quality and very quick service. An old joke about this is that you can pick any two. But, that’s no longer acceptable. The organization needs to absorb thinking Lean to be Lean. It needs to embed it in its culture, metrics, policies, procedures and finally, its tools.

Some worry that Lean can’t be built upon ERP. The real problem is that the vast majority of companies have not even successfully embraced ERP yet, so they would be building on very shaky foundations. I smile to myself after visiting some company claiming to have a “certified Class A ERP system.” Then I talk to the workers and start hearing the real story, namely that the Emperor isn’t wearing any clothes at most of these companies. Some companies may try to leapfrog ERP, but they will first need to master the basic disciplines of an organized system. No shortcuts there.

LEAN CHANGES TO ERP

While our fathers’ ancient MRP-centric ERP is largely obsolete, an evolving Enterprise System approach definitely lives on, mutating and adapting to a new world of shrinking: cycle times, budgets, non-value-added activities and headcounts.

Some companies are implementing Lean tools manually. Some are modifying ERP software, or incorporating third party Lean add-on software/systems to enhance functionality. An isolated few are still trying to do homegrown applications. Cultural change, education and leadership are also needed to help alter how organizations are run. Lean tools are gradually being incorporated into standard ERP offerings, but are lagging behind the pace of the overall Lean movement. Some ERP vendors are now addressing it more through white papers than product development. As mentioned previously, third party vendors are helping to fill the gap. Some of these may be ultimately acquired by the enterprise software vendors.

Some vendors, to differentiate themselves (and confuse us all) are now referring to themselves as “Supply Chain,” “eBusiness” or even ERPII suppliers.

Major things needing to be incorporated into most current ERP systems to improve Lean support:

• Rapid system implementation

• Flexible business modeling and system configuration

• Very simple operation

• Built in process mapping, help and training

• Very rapid response processes, from marketing, proposals and design, through order processing, planning, procurement, production and shipping.

• Strong quality assurance support

• Tools to slash administrative, material and production costs

• Facilitate integration with other systems- internal and external

• Fast and simple information visibility

• True built-in constraint management

• Integrated product and process design management tools

• Lean accounting and administration

Some Lean tools needed by many businesses:

• Flow scheduling

• Cellular/focus factory support

• KanBan, consignment, point-of-use inventory

• Rapid supply chain management

• Supplier management, VMI,

• Near real time, flexible scheduling

• Six-sigma tools for quality planning, monitoring, improvement

• Standardization/group technology

• Project management for production, capital and development projects

• “Control panel” metrics

Although some of these can be supported by software, these approaches first need to be built into an organization’s overall management system. Even if software was ready for Lean, we still need to get most companies’ management, employees and implementation support ready for it. The rarest and most important resource needed for changes of this magnitude is still executive leadership and management support—it’s not really about software.

LEAN OBJECTIVES

To understand what Lean is about, we first need to fathom what it is supposed to accomplish.

To understand what Lean attributes we need or don’t need in ERP, first start with stakeholder expectations ….

What Are Customers Looking For?

• Fast Turnaround, for inquiries, order processing and delivery, changes, information requests, new designs, engineering changes and other great customer service.

• High Quality- very low defects in product, process and administrative activities.

• Good Price- Not just low unit price, but low total cost, considering unit price, other landed cost factors, cost of quality, cost of development, changes, maintenance, support, procurement-related costs.

• Easy to Work With- Simple, straightforward service, no endless waiting on hold and convoluted voice mail menus, no runaround,

What Are Stockholders Looking For?

• Profits- Competitive return on investment.

• Equity Growth- Short/Long term.

• Security of Principal

• No Legal, Ethical Hassles- No “Enrons.”

What are Employees Looking for?

• Security of employment, income, benefits

• Interesting, worthwhile work, sense of purpose

Lean Aerospace Initiative Objectives, as promoted by The Lean Aerospace Initiative:

• Promote a lean leadership at all levels

• Continuously focus on the customer

• Development relationships based on mutual trust/commitment

• Optimize capability and utilization of people

• Make decisions at lowest possible level

• Nurture a learning environment

• Implement Integrated Product/Process Development (IPPD)

• Identify and optimize enterprise flow

• Ensure process capability and maturation

• Maintain the challenge of existing processes

• Assure seamless information flow

• Maximize stability in a changing environment

Lean Principles (Generic):

We put these together based on experience and exposure to Lean thinking:

• Identify Product Value Stream

• Rapid Response to Customer Needs, Competition, New Tools and Technology

• Flow- Single Piece

• Pull

• Eliminate Waste

• Lean Product and Process Design

• Responsiveness to Change

• Continuous Improvement

• Elimination of Defects

• Standardize- Eliminate Process Variation

• Visual Management/Control Systems

WHAT’S WRONG

What “They” Hate About Traditional ERP

Those who badmouth ERP raise some valid points which must be addressed. Here are the most common complaints we have heard.

• Proliferation of Screens, Transactions

• Cumbersome Transactions/Release Procedures

• Batch Process Orientation

• Fixed Lead Times, In Day or Longer Increments

• Poor Constraint Planning/Management- Set-Piece MRP, with Disconnected Resource Planning for Multiple Constraints

• Failure to Manage Non-Recurring & Non-Production Activities

• Weak Document Management

• Hard to Extract Information

• Weak, Inflexible Workflows

• Lack of Lean tools such as KanBan, VMI, etc

Earlier ERP approaches had additional problems, somewhat better addressed now, such as:

• Lack of financial systems integration

• Lack of support features, such as maintenance, QA

• Lack of project management integration

What Have Vendors Done About This?

In our experience, software usually lags the development of new business philosophies and techniques by a number of years. It took an infuriatingly long time for even very basic JIT concepts to percolate down into business software and corporate practices. The job still isn’t complete. Newer Lean concept implementation is still lagging. It takes years for new ideas to be understood and accepted. Then companies need to insist on their adoption and organize planning and implementation activities. Software companies need to discern customer requirements, even anticipate them, then provide software tools and support services for them. Finally, industry needs to learn and effectively implement the new tools.

WHAT TO DO ABOUT IT

More proactive companies aren’t waiting for software vendors. They’re devising manual approaches or writing their own software. Some are advising their software vendors on what they need. A new sub-industry of dedicated Lean software tools has also emerged.

Don’t wait for the ideal software. Move ahead to develop and implement cost effective approaches early. Your ERP system can be extended by manual procedures, interfaces with other systems, home-grown software, third party add-on software and/or enhanced functionality from ERP suppliers. Early attempts can serve as prototypes for more elegant ERP enhancements later on. Try to develop add-ons and modifications in a way that will not harm maintainability and upgradeability of ERP software later on. Some of the add-on application vendors will ultimately be swallowed up by the enterprise software suppliers, when they finally see how important these applications are becoming.

In selecting ERP software, add-on software or undertaking your own projects, look for the following …..

What to Look For (High Level):

• Embedded Business Philosophies (Lean, Six Sigma, TOC, JIT, etc.)

• Flexible, Rapid

• Technology/Platforms (Open, flexible, low cost)

• E-Business/Web-Enabled

• Ease of Integration

• Support Lean Operations

• Support Lean Finance/Costing

• Support Lean Product/Process Development

• Support Industry Oriented Application Savvy

What to Look For (General):

• Easy to Set Up, Flexible to Change

• Basic Structure/Discipline

• Simple to Extract, Process Data

• Able to Define and Control Straightforward Processes

• Supports Needed (and Required) Business Processes

• Simple as Possible to Learn and Use

• High Quality Software, Documentation, Support

• Strong Future Product Plan to Stay Competitive

• Best and Better Practices

What to Look For (Set-Up, Implementation):

• Rapid Implementation Tools

• Guided, Template Set-Ups

• Vertical Market (A&D) Versions

• Model Implementation Plans/Set-Ups

• Simple Table/Parameter Setups

• Template Data Maintenance

• Simple, Flexible Report/Inquiry Writing

• On-Line, Context-Sensitive Help, Tutor

• Easily Customized Workflow, Screens, Options

What to Look For (Operations):

• Flow Manufacturing

• Cellular/Line Support/Line Balancing

• Kanban/Pull

• VMI (Vendor-Managed Inventory)

• Minimal Transactions Needed, Simple Data Entry

• Near Real Time Scheduling

• Cycle Time Management

• Exception Management

• Quality/Process Management

• Constraint Management

• Cross-Contract Planning (with Soft Pegging/Allocation)

• Non-Recurring and Recurring Activities

• Rapid/Efficient Transaction Input, Defaults, Automation

• Interface/Integration With Process Control Systems

What to Look for (in More Detail):

Engineering/BOM/Routing:

• Coding to Promote Group Technology/Sourcing

• Model the Manufacturing/Service Process

• Facilitate Alternate Config.’s, Process Def.’s

• Reduce Defects Through Accurate, Timely Configuration and Process Spec.’s, Release and Change Management.

• Manage Documents, Workflow

Program/Contract Management:

• Support Timely, Accurate Estimates

• Support Competitive, Profitable Pricing

• Record, Flow Down, Contractual Commitments

• Tight Tie-in To Program Schedules

• Operations, Finance Integration

• Comprehensive Budget Definition and Tracking

• Timely Identification/Correction of Problems

• Ensure that Proper Configuration Used

• Efficient Transaction Processing for High Volume Environments

Planning:

• Group Requirements- Same, Similar

• Consume Excess, Alternates, Substitutes

• Time-Phase—Granular

• Optimize Constraints- Time, Material, Labor, Equipment, Manpower, Technical

• Respond, Adapt Quickly

• Reduce Related Administrative/Indirect Costs

• Ensure Proper Configuration Used

• Help Manage Inventory, Production Resource Usage and Disposition

Procurement:

• Improve Sourcing

• VMI, POU (Point Of Use), KanBan, E-Business

• Speed Up Procurement Process

• Highlight Requirements, Specs.

• Facilitate Competitive Pricing

• Reduce Defects Through Sourcing, Requirements, Metrics, Communication

• Administer PO’s, Contracts, Releases, Outsourcing, Processing

• Reduce Related Administrative Costs

• Help Manage Supplier Partnerships, Including Supplier Certification/Evaluation

Quality Management:

• Define/Deploy Quality Requirements, Quality Plan

• Support/Track Certs., Inspection

• Track all Defects, Reduce Process Variation

• Quickly Identify and Highlight Actionable Exceptions, Highlight Corrective Action

• Ensure that Tooling, Personnel Qualifications, Documentation, Materials, Processes, are Correct

• Maintain Traceability, Accountability

Operations:

• Schedule, Control Activities

• Accurately, Efficiently, Track Material Movement, Storage, Usage- VMI, POU, KanBan, E-Business

• Help Ensure That Proper Items/Configuration are Used

• Help Manage Release, Issue, Staging, Management of Work Flow and Needed Resources (Material, Labor, Equipment, Tooling, Documentation/Specs./Instructions)

• Record Work Performed, Configuration, Processes Used.

• Record Costs, Variances

Financial/HR:

• Manage Funding, Billing, Collection, Disbursement

• Keep Timely, Accurate Books—Enterprise, Business Unit, Cost Center, Program, Project, Part, Cost Element, for Budget and Actual

• Quickly, Efficiently, Track Costs and Variances for Products and Processes

• Manage Assets, Cash, Investments—Improve Cash Flow

• Manage Human Resources- Skills, Benefits, Payroll- Improve Employee ROI, Employee Satisfaction

Universal Requirements:

• Effective Leadership, Commitment

• Effective Plan

• Data Integrity

• Excellent Education, Training, Support, for Qualified, Motivated People

• Effective “Upstream” Systems: Forecasting, Engineering, Sales

• Streamlined, Flexible Processes

• Metrics

IMPLEMENTATION CONSIDERATIONS

Software is maybe 20% of the equation. A “system” is an organized way of accomplishing and objectives and may consist of:

• Mission

• Leadership

• Goals, Objectives

• Metrics

• Organization/people

• Policies

• Procedures

• Education

• Training

• Tools, such as software, hardware and other technologies

Successful Lean implementation often requires all of the above for success, although some success can result with only some of it. Many Lean improvements can be accomplished without any software and computers, but these are required for best results and integration with other systems in more complex environments. In the meantime, significant improvements can be made through adoption of Lean philosophies and techniques, with manual or semi manual systems. But if a company’s competitor already has Lean IT systems and the company doesn’t, it’s like knives vs. guns. An outstanding knife fighter may prevail over an inept gunslinger, but why risk it?

Other Points

The sun does not rise and set on Lean. Although its principles are widely applicable, they tend to revolve around operational matters. Marketing, Development, CRM and Human Resources are equally pressing areas needed for success.

Lean is simplicity. It is much less complicated than almost any other philosophy of running a business. Yet some people, more specifically, certain vendors, consultants and academics, are trying to make it more complicated. They are developing complex new algorithms, new terms and techniques at a dizzying rate, in a frantic attempt to gain “traction” and visibility. Resist this. Keep it SIMPLE, keep it LEAN.

This article is based upon a presentation first given at Tools For Business Survival- St. Louis MO, APICS SIG Conference, April, 2002 (www.apics.org)

ERP Coexist, Lean, They

Today’s business requires being on the cutting edge especially when it comes to website design. PHP scripts help you design a dynamic website quickly and efficiently. A PHP script is powerful combination of programming languages, which allows it to do many different kinds of things.

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Most people purchase computers to run programs – whether it is to send email, browse the web, meet friends of girlfriends on msn messenger, do office work or just play solitaire.

People buy computers to use programs for their functionality not to run operating systems be in Microsoft Windows, the new Microsoft Vista product , the Mac Operations Systems or the various Linux Operating Systems – be they Ubuntu Linux , Mandiva , Knoppix or Debian.

At the heart of most computer users is functionality and usability. It is as simple as that. It is an interesting situation that the Microsoft Corporation controls the vast lion’s share of the computer operating system market. Indeed it even has a major share holding of the next player in line – Apple with the Macintosh OS (Operating System).

What are the issues?

1) Linux is not really free. Linux, in its various flavors or distros, is given free of charge, whether it is on a cd, DVD or downloaded. You can install the program on your own compute or various computers , at no charge to yourself whatsoever

This is in direct contrast to a commercial product such as Microsoft Windows or the new Microsoft Vista which you to purchase a boxed version or a valid license which comes with most computer systems purchased. This license which comes on most new computers as a matter of course could be referred to as the “Microsoft Computer Tax” and is not an option you can forego, to reduce the purchase of your new compute – whether or not you wish to use another operating system such as Linux.

Linux is given free of charge to install. This is not a shareware or time limited version of the product which requires a registration fee after a period of time.

If you require product support or training commercial organizations do exist which will charge you for support of that product or for training or both. Indeed it can be said that Microsoft itself charges for product support, Symantec the antivirus / security organization charges for basic support by product, subscription fees – sometimes automatic subscription fees and 900 phone number and charge card “Priority Support”.

Indeed you would not expect your local school or technical college to provide computer and compute software training free of charge.

2) Linux is complex and will force you to learn the Linux command line,

Not true simple as that. The various Linux distros all have GUI (Graphic User Interfaces) just like Microsoft Windows, Windows used to come as command line DOS. Windows users use pull down windows to operate the software. So can and do most Linux users

3) Compared to Windows , Installing Linux is Difficult

- The vast majority of computer users are computer neophytes and beginners.

These computer users purchase computers with the operations system Microsoft Windows or the Macintosh Operating System installed on their new computers. These people could not install the Windows Operating system and the device drivers necessary if their life depended on it. How the situation of a Linux is based computer any different.

It is only a matter of time until new computers come preinstalled with the Linux operating system. Imagine if Henry Ford had been told not to build new cars since there were few good roads available in America.

4) My Computer Hardware Just Works Under Windows

5) Again untrue in many cases and soon to be less of an issue as more and more computers will come preinstalled with a Linux operating system. Already Dell Computer (which was a Microsoft stalwart) is selling Linux based laptops. Interestingly the response to the Ubuntu Linux dell notebooks is quite positive, If you think Linux hardware compatibility is an issue try upgrading to the new Microsoft Vista from your previous Microsoft Windows product. You will find to your surprise that few if little of computer hardware are supported. You may have upgraded to the new Vista and found you have either no sound, good video or even internet connections via your network adapter device or wireless network adapter. And try undoing your upgrade to get back to your working windows version – it cannot be done.

Lastly you may say I run Windows since all of the programs I use are available only on the Windows operations system – since that is the dominant player in the market. You may well surmise that since Windows is the more than dominant player in the computer OS market that software developers write their product almost exclusively for the windows operations system and that market.

This is true. If you are using a specialized product for your job, industry, situation or preference you may well be locked in.

In the end most people buy and use computers for functionality and use. Most people use their computers for internet browsing , communication – whether it by email or messenger services (M.S.N. , Yahoo , Skype , Eyeball Chat) , downloading and burning music and in more than many cases for playing nothing more than computer games such as simple solitaire.

In these cases the functionality of Linux and its program base easily allows for this. Indeed many of the cutting edge programs and computer services come out of left field by computer software developers and enthusiasts whose preference of Computer Operating System is guess what – Linux in its various forms.

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Who are Data Recovery Specialists? A simple answer is that they are people with the special expertise on retrieving lost, damaged, or deleted files or any other kind of data. For those people who lost data that they are in dire need of retrieving, hiring these specialists is the key to solving their problems.

There are a couple of ways of losing data. First, it can either be logically lost or it could be physically corrupted (in the hardware) or even both. The physical problem is harder to solve because it is mechanical in nature and some parts may have to be replaced. Losing them logically is easy because there are software tools that can solve the problem right away.

A specialist is someone who can fix these logical problems easily. But he is also one who might be able to fix your data lost through physical means. There may be some ingenious method that can get your information back without having to destroy the hard drive. These people are the ones who know these methods.

Restoring files can be easy if one accidentally presses or clicks the delete button. But those lost due to computer software kinks such as blue screen problems are a bit more complicated. One will have to go through frustrating times trying to boot the Operating System back. And if one can no longer boot back into the OS, the specialist has to be sought.

Getting help from a specialist is easy. Calling the computer’s manufacturer is a good step because they will give you contact to a specialist that may open your computer without breaking the warranty. The manufacturer usually has their own guys for this job. But if need be, you might have to call someone else if the situation is dire and the warranty will just have to be broken.

Seeking data recovery specialists is great because unlike computer technicians, these guys are true experts and you can rest assured that they have the best and safest answers to your data problems. An average technician will only know a few things.

One should only deal with professionals. Determine if they are so and see if they sell other data recovery products and other clean room services. If they have both of these, they are a good bet to be true expert professionals.

Some data loss can be very serious, others can be very minor. In each case, some special handling is required. The most important files, the most precious pictures and information in the computer are worth hiring data recovery specialists for any Information Technology company.

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To undo awful deletions or any error that created loss of precious data, one can simply use data recovery tools. There are different types for different files to be recovered. Even with some of these, one should also know some tips on how to further prevent data loss.

Most people tend to reboot your computer. This can be fatal depending on the kind of data loss. Rebooting will wipe clean the data even further so keep that computer open for as long as it can before recovery. Therefore, the same thing applies when one turns the computer off or shuts it down. If there is already a recovery tool residing in the computer, then it might not be able to do its job properly. So, if the computer has to be turned off, the best solution is to directly pull the plug. Rebooting your computer can sometimes overwrite the data you wish to recover.

Another tip is that one should use the tool before trying out a recovery CD. It might be able to get the computer up and running once more but again the CD will wipe the data clean so it will make it nearly impossible for you to get that data back. If there is a backup for your files, then the best thing to do is just to use that.

Recovery tools will work best when you know why exactly the data get lost in the first place. Only with that, one shall be able to determine which kind of tool to do the job since there are different ones for different purposes. Some can restore as well as fix a hard drive, while others are used specifically for removable disks, for emails, for software, etc.

People who are illiterate to computers should first call the computer’s manufacturer since they will likely have an expert or may have the right information to point you to the right direction. They can advise you if the problem can be fixed by certain software, or if expert has to be called in.

The moment you decided to recover your precious data, stop using your computer immediately. Try not to download anything then just use the recovery tool to fix the damaged drives. One can also do this with the memory partitions of the computer. One might accidentally overwrite on the lost data that one needs to get back. Some of these tools are can be downloaded on the internet while a lot of others are not and must be purchased with a price.

At times when the data recovery tools do not quite cut it, one may still recover the data. You will have to send the hard drive to data recovery companies. They will physically extract the data from your damaged computer.

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