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Sage MAS 500 ERP
January 2009 • Volume 6 • Issue 4
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.
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:
Value Stream Analysis
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:
Then you can draw a future value stream map and begin implementing it.
Click here 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.
