This is the thesis extract of the PhD research on Lean Vs ERP study in India . Research brings out Enablers and Inhibitors of ERP for Lean deliverables.

1. Dynamics of Demand Driven manufacturing
philosophy (Lean) and ERP application in
discrete manufacturing units in Pune Region.
Shrikrishna Tiwari
Phd Thesis extract

2. Lean Vs ERP
”Society has reached the point where one
can push a button and be immediately
deluged with technical and managerial
information. This is all very convenient ,of
course, but if one is not careful there is
danger of losing the ability to think .We
must remember that in the end it is the
individual human being who must solve the
problem” Eiji Toyoda
“we are the people
and the people are
the company” John
Shook
Briatico of Maytag puts it,
"Superior execution of
lean will lead to superior
competitive advantage."
So long as ERP doesn't
get in the way
"ERP gives
information, but it
does not necessarily
add value to the
bottom line of a
company," says
Stephen McMahon
Even when IT applications like
ERP were used along with lean,
they worked like two parallel lines
which never met. 40% of all
corporate IT projects are
abandoned before completion

3. But …..
study by Carroll (2007)
reveals that Lean and
ERP are most
consistently rated as the
most important strategies
for achieving efficiency.
ERP has also played a
crucial role in organizations
managing various complex
business situations, global
supplier customer base and
highly complex supply
chains specifically in
discrete manufacturing
Competition is
forcing organizations
to find new ways to
improve their
competitiveness
Lean is important to
improve manufacturing
efficiency so is ERP, for
those organizations who
aim to increase efficiency
through organizational
integration

4. Knowledge Gap
• Study done by Gore(2008) finds that ERP does acts as the
competitive advantage as a strategy, but he sees a need to
find in detail ,factors impacting competitiveness
• Powell(2012) in his study concludes a clear need to develop a
generalize solutions to use best of both Lean and ERP
approaches to secure competitive advantages.
• Few resent studies have considered impact of IT integration
and supply chain integration on firm’s performance however
they are basically focussing on interactions with supply chain
partners rather than interaction of supply chain and IT
integration on performance (Ward & Zhou, 2006).

5. Aims and Objectives
Aim
• Dynamics of demand driven manufacturing philosophy (Lean) and
ERP application in discrete manufacturing units in Pune Region.
Objective of this study
• To study lean and ERP implementation challenges in discrete
manufacturing units.
• To analyze types of ERP modules and their impact on lean ERP
deliverables in supply chain and planning area.
• To analyze enablers and inhibitors of ERP features in lean
implemented discrete manufacturing units.
• To Identify and analyze different factors impacting Lean ERP
Deliverables.

6. Scope
• Target Population is
Discrete- Lean and ERP
implementing
organizations
• Sampling Population
Pune MIDC

7. Research Methodology
• Research has employed both primary and secondary
data for summarizing the dynamics of lean and ERP.
• Secondary data includes all relevant books, articles,
journal references and websites on this topic.
• Primary data is collected by using all or some of the
following techniques as necessary
o Informal Interviews with Lean / ERP experts working within discrete
manufacturing Industry. Based on the discussions and secondary data two
questionnaires are designed.
o Survey. Questionnaires are being used to collect the data and testing the
hypothesis.

8. Research Methodlogy
• 2 separate questionnaires developed on Planning and
Supply chain area .
• Questionnaires were designed to get the feedback from
experts in these areas

9. Research Methodology
Hypothesis
Test
Supply Chain
Questionnaire
Lean Deliverables are
significantly dependant on
Enterprise resource planning
in Supply chain
1
Average of lean ERP
deliverable of different ERP
modules is not same in
Supply chain area
2
Average of lean ERP
deliverable of supply chain
area is same in plant shop
floor planning and scheduling
5
Planning
Questionnaire
Lean Deliverables are
significantly dependent on
Enterprise resource planning
in plant shop floor planning
and scheduling
3
Average of lean ERP
deliverable of different ERP
modules is not same in plant
shop floor planning and
scheduling
4

10. Research Methodology
98
• 98 discrete units found above 100 cr as of April 2012 in Pune
• Source MCCI data base Pune
63
• Out of 98 discrete units , research found 63 Lean Implementing
Organizations
• Source Lean and ERP experts and Industrial associations
45
• Out of 63 companies , we got reference for 45 supply chain
process owners
• Source Lean and ERP experts and Industrial associations
35
• Out of 63 companies , we got reference for 35 planning process
owners
• Source Lean and ERP experts and Industrial associations

11. Survey Characteristics
Row Labels Number of Orgnizations
MNC No 18
MNC Yes 40
Grand Total 58
Row Labels Number of Orgnizations
Between 1 to 3 years 13
Between 3 to 5 years 10
More than 5 years 23
Since last 1 year 12
Grand Total 58
Row Labels Numbers
AS400 1
Baan 4
BPCS 3
JDE 2
Mapics 2
MFG pro 2
Microsoft Dynamics 2
Movex 8
MRP II 1
Oracle 10
SAP 22
Sopic 1
Grand Total 58
Row Labels Number of Orgnizations
Between 100 Crore to 500
Crore
25
above 500 Crore 33
Grand Total 58

12. Survey Characteristics
• Boilers
• Chemical plants
• Machining technology e.g. insert
• Consumer durables, Home appliances
• Electrical panels, stabilizers,
• Compressors
• Chillers
• Quality instruments
• Printing machines
• Heat exchangers
• Separators
• Decanters
• Food Industry module

13. Hypothesis Test Plan
Hypotheis Test
Supply Chain
Questionnaire
Lean Deliverables are
significantly dependant
on Enterprise resource
planning in Supply chain
1
Average of lean ERP
deliverable of different
ERP modules is not same
in Supply chain area
2
Average of lean ERP
deliverable of supply
chain area is same in
plant shop floor planning
and scheduling
5
Planning
Questionnaire
Lean Deliverables are
significantly dependent on
Enterprise resource planning
in plant shop floor planning
and scheduling
3
Average of lean ERP
deliverable of different
ERP modules is not same
in plant shop floor
planning and scheduling
4

14. Hypothesis Test Results
Result Hypothesis 1 – Supply chain
Total 541 653 170 1364
Chi-Sq. = 227.960, DF = 86, P-Value = 0.000
Hypothesis Test 5 Overall
Analysis of Variance
Source DF Adj SS Adj MS F-Value P-Value
Factor 1 0.0047 0.004719 0.03 0.870
Error 67 11.6753 0.174258
Total 68 11.6800
Hypothesis 4 – Planning
Analysis of Variance
Source DF Adj SS Adj MS F-Value P-
Value
Subgroup 3 1.913 0.63751 6.81 0.002
Error 24 2.247 0.09361
Total 27 4.159
Result Hypothesis 3 – Planning
Total 290 332 134 756
Chi-Sq. = 223.726, DF = 54, P-Value =
0.000
Result Hypothesis 2 – Supply chain
Analysis of Variance
Source DF Adj SS Adj MS F-Value P-
Value
Subgroup 6 3.889 0.6482 6.08 0.000
Error 34 3.627 0.1067
Total 40 7.516

15. Findings and Conclusion
Major finding of this research is in eliminating the myth that
ERP conflicts Lean. Research beyond doubt statistically
concludes positive impact of ERP on Lean deliverables
Statistical tests confirm that ERP does significantly impacts Lean deliverables in Supply
chain management and in shop floor planning and scheduling. Test find very strong
contribution 74% and 79% for supply chain and planning area consequently.
Research did not find any difference in ERP contribution in both supply chain and plant
shop floor planning and scheduling in enhancing Lean deliverables

16. Findings and Conclusion
• This research surfaced challenges of ERP application
wrt different modules in discrete manufacturing units.
Some of the challenges both in Supply chain and
production are
o Kanban Management
o Capacity Planning
o Manufacturing execution system
o Transportation optimization
o Technological interface with supply chain partners

17. Findings and Conclusion
Factor Analysis
• Supply chain
o Tests find NO impact of
• lean implementation experience ,
• Turn over ,
• MNC or not on Lean ERP deliverables .
• However mean values do show decline with lean experience and high
turnover.
o Test find NO impact on deliverables in
• Automotive vs Engineering
• but mean values do show Automotive deliverables are better than
Engineering

18. Findings and Conclusion
Factor Analysis
• Planning
o Tests find NO impact of
• lean implementation experience ,
• Turn over ,
• MNC or not on Lean ERP deliverables .
• However mean values do show decline with high turnover and improvement
as lean experience betters.
o Test find Strong impact on deliverables in
• Automotive vs Engineering .
• It finds that deliverables are lower in Engineering than Automotive

19. Findings and Conclusion
Enablers Supply Chain Enablers Planning
• S&OP
• Demand Management
• Supplier performance
traceability
• Communications across
supply chain
• Inventory management
• S&OP
• MRP
• Capacity Planning

20. Findings and Conclusion
Inhibitors Supply Chain Inhibitors Planning
• Kanban
• Interface / technological
interface
• Transportation
• Capacity planning certain
features
• MRP for certain features
• Kanban support for
kanban size, eKanban etc
• Capacity planning
• MRP support for material
traceability and OEE

21. Practical Significance
• For Industries to steal with pride, outcome and use the
enablers to optimize business performance and
competitiveness . Avoid inhibitors to avoid failures.
• For ERP vendors to receive this input for module
functionality development . Which will help bringing ERP
more closer to Lean requirement
• For Lean –ERP community to see this as the
confirmation of the belief from the industry that Lean and
ERP can work together

22. Journey towards excellence continues………….

23. Thanks