Lean Cell Manufacturing History and the Modern ERP Software Package in Globalization

When industrial visionaries create improvements in manufacturing technique far ahead of their time, reluctance to change is the common response of managers comfortable with traditional, production methods. From Adam Smith’s eighteenth century “pin factory” to Frederick Taylor’s “scientific management” in the nineteenth century, and Henry Ford’s twentieth century “mass production” to Taichi Ohno’s contemporary “pull production” model, shop floor operation has been in constant evolution. In all of these periods of change, it has often been the early adopters of emerging manufacturing techniques who have enjoyed great benefits over their competitors.

Those benefits often result in increased market share, profit margins, or both, from enhanced efficiencies in the manufacturing process. In many job shops, make-to-order, or mixed mode manufacturers, these efficiencies in production are found in the elimination of waste—a technique commonly referred to as lean production. It was Ohno who, in the post-war period of the late 1940’s, developed the lean system as an operations management philosophy centered around reducing waste in the manufacturing system. His idea was to make the process more efficient and less expensive by producing a higher quality product in less time.

By the 1980’s, the lean production concept in manufacturing replaced older batch production methods that sought to save on the number of times set-ups needed to be made in machinery. These batch production techniques created large (though wasteful) inventories that led to inventory value depreciation, wasted cash flow, and the need for warehousing. Instead, lean operations began to be employed that limited work-in-progress (WIP) inventories through the use of just-in-time (JIT) pull production controls. With JIT pull production, finite scheduling of resources could finally be engaged to ensure there was adequate space downstream before additional inventories would be processed. By the late 1990’s, JIT production techniques began to finally realize the overarching goals of continuous improvement leaning through the elimination of wasted inventory in the system.

Today, these refined lean principals interface well with the rise of total enterprise resource planning (ERP) software packages that integrate all plant departments and functions onto a single computer system that serves all those departments’ particular needs. ERP eliminates individual computer systems in areas such as manufacturing, finance, HR, and shipping. Instead, they are replaced with a single unified software program that is subdivided into several software modules dedicated to each enterprise area. Now, all departments are linked together with the same real-time data. Like the lean principals that it serves, accountability, responsibility and communication are also primary concepts at the heart of the ERP package.

To enhance ERP applications, the lean cell technique is increasingly employed to build efficiencies into the system. With the lean cell concept of production, several operators work in proximity to each other with the principal goal of reducing the unnecessary movement of materials. In a lean cell configuration, everything for assembly is built into the cell and material goes right through the floor—no more maintenance of depreciating raw materials inventory. Lean cell technique results in the batching of several orders together to buying to the job or project. Then as soon as the order comes in it goes in, it goes straight to the job. You build to a shippable inventory or wait to you get enough orders to make the cell concept viable as a cost savings application. The ultimate benefit is that in lean cell techinque extremely fast lean set-ups are achieved.

In tandem, lean cell and ERP work well in the system flow model of manufacturing now emerging in the 2000’s. In system flow models, high volumes of unit production (as repeat items) flow through the plant with ease by the use of lean cells—collections of workstations that physically tie together in a single location all the equipment, materials, and tools, used in the fabrication of an item. With the modern lean cell, set-up times are significantly reduced to ten minutes or less, if not eliminated altogether.

So, from Ohno’s 1940’s development of lean principals to the contemporary applications of lean in fully integrated ERP operations in the late 2000’s, the history of waste reduction in the manufacturing process has been the brass ring for every manager. Modular, robust manufacturing software is now the name of the game when it comes to bringing together all of the elements in manufacturing and the creation of the lean cell production model. In other words, the marriage of ERP software packages and lean operation principals are a match made in manufacturing heaven, and one that makes manufacturers more competitive in the ever-increasing movement toward globalization.