|
| |
|
Sage MAS 500 ERP
Newsletter for Sage MAS 500 ERP
January 2009 • Volume 6 • Issue 4 |
|
| Achieve Lean Operations With
Sage MAS 500 ERP |
|
|
|
What does it mean to have a lean manufacturing or distribution operation? What are the benefits?How can Sage MAS 500 ERP help? Here we offer some answers to these questions, to help your operation become more efficient and profitable. Lean principles can be applied to manufacturing, distribution, and even service operations. For simplicity, we will refer only to lean manufacturing in this article.
Lean Manufacturing Defined
Lean manufacturing is the process of trimming waste from all areas of the manufacturing cycle to minimize costs, while maximizing the ability to deliver to customer requirements.
One of the earliest proponents of lean manufacturing, Taichi Ohno of Toyota, defined waste very broadly as Any human activity which absorbs resources but creates no value. He went on to divide waste into seven
main categories:
- Defects
- Overproduction of goods
- Inventories awaiting further processing orconsumption
- Unnecessary or extra processing steps
- Unnecessary motion of employees
- Unnecessary movement of goods
- Waiting for an upstream process to deliver
Value Stream Analysis
| Headline News |
Sage FAS version 2008.2
was recently released. It
includes changes that incorporate
the provisions of the
Economic Stimulus Act of
2008, plus other enhancements.
A new version of
Form 4562-FY is included
in version 2008.2. If you
own Sage FAS, you will
need to download Sage FAS
2008.2 to take dvantage
of the special depreciation
provisions of the Economic
Stimulus Act. Please contact
us with your questions. |
In working to eliminate waste, lean manufacturing concepts suggest that you first map the current value stream for the target product, product family, or service. The current value stream map shows the steps, delays, and information flows currently required to deliver
the target product or service.
Next, assess the current state value stream map and identify areas you can improve flow
by eliminating waste. Keep in mind the categories
of waste as you perform your review. As you analyze the current value stream, consider how implementing the following lean principles can help eliminate waste:
- Flow: Move from large batch operation to small batch or even one piece operation.
- Pull: Create a way for downstream consumption to trigger upstream production.
- Perfection: Constant improvement, either incremental or radical. Lean is an ongoingrefinement process.
Then you can draw a future value stream
map and begin implementing it. |
Click to Enlarge |
A simple example of a value stream map. Maps
can be completed by hand or there are several
inexpensive flow chart software products available
to assist with value stream mapping. |
|
Getting Started
As you work to implement your futurestate
value stream, you will want to solve
the problems that are easiest to correct first.
Waste that can be eliminated immediately
without needing to change processes or affect
information flow should be your first target
for action. Later, you can address those
steps or processes that create no value, but
are unavoidable with current technologies. A
good place to start is shop queue time. How
can you change the process to reduce queue
time? Your Sage MAS 500 software can help
your operation become lean in two ways: you
can use the tools in the software to help identify
waste, and you can implement software
procedures in ways that eliminate waste.
Sage MAS 500 And Lean
The complexity of manufacturing processes
vary widely, even within one operation.
You can use Sage MAS 500 to the best
advantage by using different processes for different
types of manufactured items.
Advanced Planning And Scheduling
Using the Advanced Planning and
Scheduling module, you can search for bottlenecks,
capacity constraints, and late production.
Keep in mind that 100 percent work
center or machine utilization is good — unless
it is the bottleneck holding up downstream
processes.
Routings, Bills Of Materials, And
Work Orders
Routings and bills of material can be
designed to eliminate queue and move time.
You can simplify them by using phantom bill
structures.
Work orders are most effective for final
assembly items or primary sub-assembly
components. Keep data entry to a minimum
by using automatic issues or backflush transactions
for materials and labor.
For non-primary or repetitive components,
a pull or manual scheduling system
may be most efficient. You can utilize simple
Light Manufacturing Production Entry transactions
to: automatically receive product into
inventory, issue component material by backflushing,
and issue and accrue labor costs.
To remain lean, kitting and assembly
should be postponed until the last moment
prior to customer delivery. The Build-To-
Order (BTO) kit method in Sage MAS 500 is
perfect for this.
Material Requirements Planning
Material Requirements Planning (MRP)
allows you to plan for the long term. You
can use the information to develop a delivery
strategy with your suppliers. Place a large
blanket order to receive the best prices, but
specify delivery on an as-needed basis.
Lean Demand Management
While it takes some initial work, calculating
and storing demand factors, usage thresholds,
safety stock calculations, and lead time
formulas will allow you to become much
leaner over time. You can apply your formulas
to similar product groups rather than individual
items to make the process less burdensome.
Demand calculations can include seasonal
adjustments. Usage exceptions can be
monitored with the Unusual Usage Report.
Lean Inventory
To procure the right amount at the right
time, make use of the EOQ (economic order
quantity) field in Sage MAS 500. In making
this calculation, factor in item costs, purchasing
and receiving costs, and inventory carrying
costs. You also can set minimum/maximum
purchasing rules for low or erratic volume
items, and define maximum stock levels
for high volume items. Search for wasteful,
slow-moving inventory with the Inventory
Analysis and Inventory Performance Reports.
Lean Purchasing
Within the purchase order process, you
can reduce waste by generating suggested
and actual purchase orders. Once you determine
demand for all products from a particular
vendor, you can consolidate them onto
a single purchase order, and then use saved
data regarding vendor minimums to adjust
quantities. Optimal purchase quantities can
be determined based on multiple parameters,
including those coming from the Demand
and Inventory report, as well as lead times,
order frequency, and policy.
Remember, Lean is the process, Sage
MAS 500 is a tool that can help you achieve
it. Please give us a call for assistance in improving
your value stream. |
|
|
| |
| © Copyright 2004–2009 Tango Marketing, LLC. www.tango-marketing.com All Rights Reserved. This newsletter and its content have been registered with the United States Copyright Office. This content is licensed by Tango Marketing LLC and
can be distributed by licensee until 04/30/2009 at which time the licensee must cease distribution and use of this content unless permission in writing is obtained from Tango Marketing LLC. Reproduction in whole or in part without permission
is strictly prohibited. The capabilities, system requirements and/or compatibility with third-party products described herein are subject to change without notice. Sage Software, the Sage Software logos, and the Sage Software product and service
names mentioned herein are registered trademarks or trademarks of Sage Software, Inc., or its affiliated entities. All other trademarks are property of their respective owners. |
|
