ERP Strategy: Blend Lean and ERP

One of the long time complaints of Lean practitioners with the ERP product vendors is that there are no Lean enabling functionalities built in the ERP products rendering the Lean initiatives depending on spreadsheets and other offline tools. This makes Lean less responsive and takes more time to come out with the proposed changes in the way we work due to a new situation. In this turbulent time, this is what we expect least from a team or business function that they are slow to respond and more effort is required to make them respond. Lean experts and practitioners have been impacted by this perception (not only a perception though) and the return on investment as well as the targets of process improvement and increased efficiency takes longer than required. Ultimately, the organizations are disillusioned with Lean activities (sometimes) and start focussing on other initiatives more.....This is one of the biggest mistakes they make, in my opinion. Any business scenario, be it low or high demand, good or bad cash flow...process improvement is one area where we can not compromise or have second opinion and Lean is one of the best catalysts to achieve it and this is why we need to blend Lean and ERP.

There is a strong need to automate (beyond templatization) the lean frameworks and as per the Lean practitioners, ERP can play an excellent role in it by incorporating the functionalities in this respect. It can work in as simple way as it is done by incorporating multiple forecasting techniques by large ERPs in their products. This will sure take Lean to next level and the business fraternity as a whole will benefits for this and this includes the ERP vendor, the customer organizations that implement ERP and the service provider or consultant. Finally, it will help the consumer because of many reasons.

But, let us go a little beyond our obsession of incorporating Lean related stuff in ERP products and find out how else we can blend both of these (even with current offerings) during an ERP implementation and take benefits from this blend.

Ideally, as soon as it is decided that the organization is going for an ERP product deployment (or even a product upgrade or re-implementation), one of the activities, that need to take off is to start inventorying the business processes that we intend to move to this platform and start looking at improving them by using the best practice process databases available. Though, too much effort should not be spend on any process improvements at this stage but we need to start collecting data at this stage so that we are ready for the next stage. After deciding the product, going ahead with the requirement gathering and penning down as-is processes, there comes this point where we should start blending Lean into our ERP endeavor. This point is: To-Be Process Design. Here is when we should break the processes into smaller activities and tasks and use Lean tools like SIPOC, Fishbone, FMEA, QFD, value stream mapping etc. to first identify the target activities and tasks to be Leanergized and then design the processes in such a way that the processes fit into the ERP product as well as are the best processes as per the business operations. Remember that this exercise of designing the To-Be processes will be done with the help of the service provider (consultant) and since these days most of the world class consultant organizations have their own Lean frameworks and methodologies, I am sure this will not take more time than budgeted in the ERP project. But make sure that it is communicated as one of the success criteria for selection of the implementation partner when you float the request for proposal document.

The importance of Lean and ERP blending in time, increases with the fact that it is seen multiple times that point solutions (Lean) deployed after ERP deployment, have not provided the requisite benefits and have rather become counter productive in most cases.