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Lean Manufacturing

Most people do not understand the connection between planning, scheduling and LEAN manufacturing but if you read the book you will see there are a number of interesting links.

When I say LEAN what I am referring to is a number of techniques that have been used in recent years to reduce waste and simplify things. This list includes Six Sigma, TOC (Theory of Constraints), Kanban, JIT (Just in Time) and a number of others.

The general conclusion is that these techniques have had a significant impact on manufacturers that have a predictable demand and a limited number of products but have mostly failed in companies that must manage volatile changes in demand, large numbers of products and complex supply chains.

Our research has shown us that many of the companies that were unable to make LEAN work are still using MRP based planning modules that were developed in the early 1980’s. The reason is not really hard to understand. Because these planning modules are very inaccurate, they create excess buffers of time and materials at every step in the process which runs counter to any efforts to reduce waste.

Another traditional problem LEAN initiatives have is that because they are mostly manual it is not easy to measure their impact on the overall system. Local optimization implies that savings in one area of the supply chain may or may not be effective.

Because APS planning systems are far better equipped to accurately handle time they do a better job of connecting each step in the supply chain. This allows you to measure and communicate the impact of local optimizations on the rest of the supply chain. APS systems also allow you to simulate the effectiveness of other techniques such a Kanban cards.

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