Lean IT Systems – Not ERP

Posted on August 19, 2008 by John Hunter

I am not sure, IT needs to get lean on manufacturing, does the clearest job of explaining some things, but it does state some things well:

you can see how typical offshoring doesn’t work here, as it is counterproductive to true lean manufacturing. If your plant is 8,000 miles away, you need to plan even further out, building in as much as an extra month for transoceanic shipping. Manufacturers also need to carry a larger safety stock in case shipments do not arrive on time. Due to the high costs of shipping, especially with fuel costs rising, manufacturers typically order more than is needed in order to reduce per unit shipping costs, filling an entire container rather than ordering by the smaller palette size.

SAP or Oracle MRP are a problem because they cannot set up an “execution” system to perform based on lean principals.
…
It is this new concept that is the biggest stumbling block for IT in terms of adopting lean manufacturing. Most major companies have invested multiple millions in their ERP system, and it’s IT’s job to run the system. On top of that, these software-acquisition decisions for the major ERP systems are made by the CEO and CIO, who don’t understand the shop floor.

What the article is really talking about IT departments providing the proper tools for organizations to manage. IT should also adopt lean methods for their operation (many in IT that are practicing lean are doing so with agile software development methods). Toyota, not surprisingly does well at using IT to support lean manufacturing.

ERP stand for Enterprise Resource Planning and in IT circles referrers to amazingly complex IT systems to manage the organization. Some people think they are useful, I think they are overly complex, poor management implementations that end up having organizations conforming processes to the IT system instead of having an IT system that support the organization. And they are far too complex – web 2.0 type applications should be the focus not ERP. IT should liberate people to be more flexible with designing processes, PDSA… not act to enforce rigid rules.

Related: lean manufacturing articles – Information Technology and Management – Agile Management

This entry was posted in IT, Lean thinking, Management, Manufacturing, Systems thinking. Bookmark the permalink.

2 Responses to Lean IT Systems – Not ERP

  1. Pingback: CuriousCat: Zara Thrives by Ignoring Conventional Wisdom

  2. Pingback: Management By IT Crowd Bosses | Curious Cat Management Improvement Blog

Comments are closed.