We’ll start by talking a little about the principles and benefits of lean manufacturing and how it can help organizations successfully meet the challenges of global competition and difficult markets. Then we’ll address specifically how Lean Manufacturing for Microsoft Dynamics AX 2009 supports lean thinking and enables implementation while delivering an integrated business management solution known for providing a fast return on investment. Finally, we’ll end with a brief demonstration and a chance to answer your questions.
I don’t need to tell you that business is tough. In recent years, global competition in manufacturing sectors has been especially fierce. On top of that, challenging conditions in many markets are leading to closures, business failures, and difficulty in obtaining capital. That means it’s more important than ever to control costs, do more with the equipment and resources you’ve already got, and provide superior service to customers. Of course, those same conditions represent a huge opportunity for organizations that can outperform competitors and leverage the uncertainty into greater market share and profitable growth.
In such tough conditions, the benefits of lean manufacturing interest manufacturers more than ever. Lean manufacturing or “lean thinking” is not new, of course, and Toyota is the most well-known practitioner, having been at it for decades. In the book Lean Thinking: Banish Waste and Create Wealth in Your Corporation, James P. Womack and Daniel T. Jones demonstrate the value of lean using the Toyota model. And although they can make lean manufacturing look easy, it’s not. Numerous organizations can attest to that, as do many bestselling books on the topic. But the jaw-dropping results of companies that have successfully implemented continue to draw admiring glances. It’s easy to see why such improvements give these companies a big edge over the competition. And the success stories are more than enough to make other business leaders take notice—or even renew a commitment to lean manufacturing that has previously fumbled or waned.
In fact, research done by AMR Research in 2007 indicated that the vast majority of organizations already are adopting lean methodologies and tools, at some level or in some parts of their organization. More than half are engaging in value stream analysis, which is the fundamental first step to implementing lean manufacturing. And fewer than 10 percent give lean thinking no attention at all.Reference: Demand-Driven Manufacturing, by Colin Masson, Alison Smith, and Simon Jacobson. AMR Research, Inc., AMR Research Report, January, 2007.
So what IS lean manufacturing, and what makes it of such widespread interest? Fundamentally, it’s doing more for the customer with less effort, less time, less inventory, less equipment, less space, and less money—except on the bottom line, that is.
To enable an organization to “do more with less,” lean thinking advocates five specific steps: Understand the value of your product, including the purchase experience, delivery, and service, as defined by the person who will pay for it: the customer. Clearly identify how that value is created by your organization—the value stream—and what you may be doing that is not actually contributing to that value. By lean definitions, anything else is muda, or waste. Most lean tools, such as Six Sigma and kanban systems, are aimed at identifying and eliminating waste to increase efficiency. Create a streamlined production flow that maximizes value and minimizes waste, including wasted time, wasted space, and wasted materials. Flow production is a radical change from traditional batch-and-queue production, in which orders may accumulate or work-in-progress may sit in inventory between stages of production. Drive production from customer demand, which is known as demand-pull production, instead of pushing production to create inventories that may or may not be directly associated with demand. Demand-driven production is another way to reduce waste in the form of finished goods inventories that take up space, age, become damaged, or that nobody ultimately wants. Strive for perfection. Do all of this flow improvement and waste reduction on a continuous cycle of incremental and ongoing improvement.
In some industries, lean manufacturing is a radical change in how manufacturers think about their businesses. But the effort has been proven well worth it.For instance, organizations have achieved results on the order of: Lead and throughput times down from weeks to days or from days to minutes. 90 percent inventory reduction. Rejections cut to zero, or near zero. On-time delivery performance approaching 100 percent. Productivity increases by nearly half. Cost reductions of 50 to 70 percent.
With such benefits, why is anyone waiting? There are probably as many reasons for hesitation or failure as there are organizations, and entire books have been written on the challenges of lean manufacturing and how to overcome them. But from an IT perspective, the challenges include: The inability to get or understand adequate information for process improvement. Lack of integration between processes, people, and information. Creating a “proof of concept”. It can work really well to take one product line to create "proof of concept" while the rest of the company remains "classic" batch and queue. But that means running in mixed mode and phased implementations in which some production cells or lines may be operating under lean principles and others have not yet made the switch. ERP and Material Requirements Planning (MRP) systems are viewed as essential but need to promoteprocess flow (lean) thinking.
Lean Manufacturing for Microsoft Dynamics AX has been designed specifically to help manufacturing organizations compete today by supporting implementation of lean manufacturing strategies. It’s an integrated business management solution that also delivers the specific functionality that can empower your people to achieve demand-driven, flow production.For instance, the solution delivers tools for determining the pace of demand—takt time—and then leveling and scheduling production to meet the pace of that “drumbeat.” The customer demand information that drives the system can come through EDI, XML, CSV data, or through a Web page to feed three-horizon sales scheduling that drives flow production.To be able to create a demand-driven, flow production system, of course, you’ve got to have processes and replenishment completely under control. Lean Manufacturing for Microsoft Dynamics AX provides support for kanban replenishmentsystems, whether your kanban are cards, bins, buckets, or electronic signals. It also helps improve replenishment by enhancing supply chain collaboration. With Business Portal integration, you can share real-time information about demand, materials requirements and inventory levels, and order status. Standard Web services and the ability to exchange common electronic documents such as POs, confirmations, ASNs, and invoices can help you streamline transactions, increase accuracy, and speed order cycles.
Because it provides tailored, role-based access to information and tasks, as well as a familiar user experience, the solution can increase the productivity of your people and help free them for higher-value improvement activities. Easy access to performance and process information and a variety of collaboration and communication tools enhance team problem-solving and improvement.Finally, as a flexible solution, it supports mixed-mode operations and can adapt as your business changes and your lean manufacturing implementation evolves. Lean Manufacturing for Microsoft Dynamics AX can help you achieve the insight, agility, efficiency, and customer-orientation that characterize lean thinking and enhance profitability and business success.
Here’s a snapshot of the solution’s manufacturing, sales-driven scheduling, kanban and inventory management, and lean accounting functionality that support efforts to create demand-driven organizations with value-stream-based accounting that reflects true costs and performance. This lean manufacturing functionality comes on a foundation of integrated sales, purchasing, financial, business intelligence, and collaboration tools for an end-to-end business management solution.
Specifically, Lean Manufacturing for Microsoft Dynamics AX delivers: Sales-based scheduling, so you can interact with customers as they want, maintain production flow using multiple horizons and tentative, planned, and firm commitments, and link sales directly to production cells. An heijunka board tool for leveling production and helping ensure a steady manufacturing pace to meet the total demand. Support for all forms of kanban, including fixed and target kanbans, pull-to-order kanbans, and dynamic or temporary kanbans, to pull all material into production based on need signals. Sophisticated business intelligence, including RoleTailored access to reports, plus the ability to analyze and share information using familiar tools such as Microsoft Office Excel. End-to-end integration and connectivity. In addition, this end-to-end solution builds on your existing IT investment and connects smoothly with other Microsoft products, servers, and technologies, including Microsoft BizTalk Server, Microsoft SQL Server, and Microsoft Office SharePoint Server to support the collaboration, trade partner interaction, and business intelligence that are so important for lean manufacturing to work. The result is a long-term, flexible solution with a high level of support for lean manufacturing and a low total cost of ownership.
Lean Manufacturing for Microsoft Dynamics AX can help you accelerate efforts to achieve greater efficiency and profitability while helping to provide a fast return on investment and a low total cost of ownership.With Lean Manufacturing for Microsoft Dynamics AX, your people can successfully implement and sustain lean manufacturing initiatives that can help drive your business into the future. The solution provides robust functionality and built-in flexibility, including options for kanban, kaizen, heijunka-board production leveling, just-in-time operations, and other key tactics by delivering the specific functionality, access to information, and process flexibility demanded by lean manufacturing operations. As an integral part of a familiar and adaptable end-to-end business management solution, Lean Manufacturing for Microsoft Dynamics AX can help you achieve the insight, agility, efficiency, and customer orientation that enhance profitability and business success.
Adoption of Lean Practices Continuous improvement techniques such as Six Sigma DMAIC Value stream analysis to identify value/ non-value-added activities— country cross tabulation Lean replenishment strategies with suppliers Lean manufacturing tools, such as kanban loops, takt times, and heijunka Not using or evaluating lean manufacturing practices *Source: Demand-Driven Manufacturing. AMR Research Report, January 2007.
Five Lean Principles Understand value from the customer’s view Identify the value stream—and non-value activities (waste) Create flow to reduce waste Pull production (rather than pushing it) Strive for perfection
Flow Improvement From this… Sawing Area Lathe Area Drilling Area Job Reporting Inbound Tool Room Work in process Outbound Job Reporting Welding Area CNC Lathe Area Assembly Area Shop Floor Office Area
Flow Improvement To this… Cell 1 Cell 2 Cell 3 Sawing/Drilling Area Inbound Job Reporting Lathe Area Tool Room Outbound Job Reporting Welding Area CNC Lathe Area Assembly Area Shop Floor Office Area
How Lean Manufacturing for Microsoft Dynamics AX Can Help Integrated Sales, Purchasing, Financial, Collaboration, and Business Intelligence Lean Manufacturing Functionality Lean Accounting Planning/Scheduling Organization Kanban and Pull-Based Execution LOS (Lean Order Schedules) Kanban Kanban Board Cost Substitution Item Cells Value Stream as Financial Dimension Heijunka Board SubcontractingKanban Kanban Inventory Overview Sales Pull Signals (Call Off) Sales Schedules Takt Meter Purchase Kanban Barcodes Transfer Kanban
Lean Manufacturing for Microsoft Dynamics AX Functionality
End-to-end integration and connectivity to other Microsoft products, servers, and technologies
Summary Achieve demand-driven production Increase replenishment efficiency Accelerate continuous improvement Understand value streams, eliminate bottlenecks, and identify improvement opportunities Free people for higher-value activities
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