Adopting Lean Manufacturing in Packaging and Printing: How an ERP System Can Help

“Lean” is defined as a process to improve manufacturing and service operations, reduce waste, improve quality and drive down costs. Think of Lean as a methodology that cuts the “fat” out of manufacturing costs at every stage of the operation. In fact, many manufacturers have found Lean Manufacturing particularly effective as a weapon against low-cost competitors. Of course, when it comes to Lean, implementing new software such as an integrated business application can help achieve Lean results faster than without it.
Radius Solutions’ PECAS Vision is a fully-integrated Enterprise Resource Planning (ERP) system that provides specialized solutions to a range of sectors in the printing and packaging industry and can help support a lean environment. According to a 2004 Gartner, Inc. white paper entitled, ERP Applications Help Achieve Lean Manufacturing, there are five areas in which IT can be leveraged as a crucial enabler to a successful Lean Manufacturing operation:
- Product Data Management – the ability to leverage the use of product data
- Forecasting – the ability to forecast in a highly unpredictable environment
- Line Design – using the estimated demand to design production lines
- Line Scheduling – scheduling of the demand on the lines
- Flow Visualization – visualization of the flow of the product through the manufacturing cycle
ERP systems enable users to maintain the integrity of master data. Radius Solutions’ PECAS Vision application incorporates the use of raw material and finished goods, both of which are integral to the use of the system and in managing data. As a sales order is booked, the production job can be created immediately, vastly reducing the time to schedule a job. While this occurs, the job is also available to the scheduler. Next, the buyer is notified of the demand for raw materials and the work order instructions are created immediately, thereby eliminating redundant keystrokes. One of the concepts of Lean Manufacturing is the distinction between “cost-added” versus “value-added.” The reason being is that “cost-added” is a cost incurred that the customer would not necessarily want to pay for, such as the administration cost for processing a sales order. This is important information to know, especially when a company is looking to drive down costs and run more efficiently.
As mentioned above, the cost of processing can be greatly reduced when utilizing an ERP solution. However, a company can take advantage of further reductions with Intervision, a Web-based module of PECAS Vision that enables customers to place or change sales orders and release them through a Web portal. Intervision also allows customers to view inventory levels and existing sales orders as well as obtain the status of the sales order. This integral functionality greatly reduces the cost added elements and provides ultimate value to the customer.
Identifying future demand is critical in a Lean Manufacturing environment. Most users do not have direct lines of communication from the customer order to production. Quantity, mix and variability of demand are what determine the capacity of the Lean line and the amount of resources required to produce that demand.
Traditionally, the printing and packaging industry has been a “jobbing” environment, where each job is unique. (See Example Flow 1)
Demand Forecast
EXAMPLE FLOW 1 – TYPICAL JOBBING ENVIRONMENT
1. A sales order is created in PECAS Vision
2. PECAS Vision calculates the demand and suggests production
3. The planner converts the suggestion to a production order
4. PECAS Vision notifies the buyer of the demand for raw materials
5. PECAS Vision notifies the scheduler of the demand for time
6. Raw materials are purchased or reserved from available free inventory
7. Tasks are scheduled
8. Finished goods are manufactured
9. Finished goods are shipped to satisfy the sales order