Written by Rich Dale
17 10 2021

How MRP Helps in Implementing Lean Management

Correctly implementing a lean management system is not easy and requires time. However, choosing the correct MRP system goes a long way in avoiding problems.

Reading Time: 4 minutes

Due to the fast-paced nature of modern manufacturing, staying competitive means constantly improving your operational efficiency. One of the most effective ways to achieve this is by implementing a lean management methodology – a well-proven strategy originally implemented by Toyota in the mid 20th century. However, lean management is a set of methodologies and principles and is easier to successfully apply when you have the right tools.

Manufacturing requirements planning (MRP) software systems like Flowlens are specifically designed for this task. This article will describe how an MRP system can help you implement lean management and improve overall business efficiency and profitability. 

What is lean management?

The lean management methodology can be defined by its three core ideals: delivering value to the customer, reducing wastage, and embarking on continuous improvement. 

Reducing wastage is an important factor. According to Ray Dodd, GM at On-Systems:

“Embracing the operational flow within Flowlens has enabled us to do lean data-management cleansing activities.” 

The lean management methodology provides a tried-and-true framework for reducing overall wastage within your company. It can help you:

  • Reduce overproduction caused by overestimating the demand
  • Reduce overprocessing by eliminating processes that add little value
  • Reduce wait times between processes in the workflow
  • Reduce unnecessary movement of workers, parts, and products
  • Reduce unnecessary transport of workers, parts, and products
  • Eliminate production defects
  • Reduce the need to store extraneous inventory

What is an MRP system?

Manufacturing requirements planning or MRP is a software system used for production planning and inventory management. Flowlens is a highly flexible MRP software with a wide range of features over and above those found in standard MRP systems. Flowlens makes the management of your business simpler by aiding in the tasks listed below.

  • Generating sales quotations
  • Automating sales orders
  • Creating and managing work orders and job cards
  • Implementing efficient materials planning & purchasing
  • Managing bills of materials
  • Handling after sales equipment service jobs
  • Linking to your accounts package, such as Xero, QuickBooks and Sage
  • Providing realtime reports and dashboards

The principles of lean management

To implement an efficient lean management process, you must follow the 5 key principles of lean management. These principles serve as the foundation of the lean concept and are listed in detail below.

  1. Identify value

Before implementing any lean management process it’s important to identify and define the core value of your business. This helps you build a lean manufacturing system on a solid foundation. Your company’s value lies in its ability to solve a specific problem faced by customers in the form of a service or a product. Processes that do not directly address this value are considered wastage according to the lean management methodology. Once the system is set up, it is easier to view business metrics to see if the core value is still the focus in day-to-day operations. 

  1. Value stream mapping

In the language of lean management, your value stream is simply the workflow within your company — i.e. the flow from enquiry to delivery of your product to the customer — and includes all people and processes. Once this value stream is mapped, it is easy to eliminate unnecessary processes that do not add to the core value. An MRP system allows for this value stream to be digitally implemented, thus serving as a way to structure the MRP system to suit your company’s specific value stream and help flesh out the system. 

“Because it is so simple, it takes a lot of unnecessary activity out of our processes. They really are being stripped back and becoming quite lean” – Ray Dodd, GM, On-Systems

  1. Create continuous workflow

In order to effectively eliminate wastage, it is important to optimise the workflow all along the value stream. According to Ray, the entire workflow “from start to finish of the whole lifecycle from sales to delivery to the client” can be managed from within the Flowlens MRP system. This visibility over the entire workflow allows On-Systems to quickly identify and address potential bottlenecks.

  1. Create a pull system

One of the wasteful activities identified in lean management is overproduction. Overproduction leads to excess inventory, a situation that is inherently inefficient. Your company must allocate resources to deal with the inventory rather than putting those resources directly into its customer-focused core value. A pull system should be implemented so that production only goes ahead if there is a need for it. Ideally, the product can be produced immediately once a customer places their order. If the system is properly implemented and all stakeholders along the value stream are optimised for this, then your product can be delivered extremely quickly. That speed translates into value to the customer. 

  1. Continuous improvement

Once all of the above has been implemented the system can be considered lean. However, the lean management principle places high value on the act of continuous improvement. No static system can realistically be expected to work forever. As such, it is critical that you review and optimise the system regularly since there will always be room to improve. Flowlens is highly customizable and is easy to adapt to changing circumstances making it the ideal MRP system in a culture of continuous improvement. 

Benefits of a lean management process

Lean management has been proven to improve corporate efficiency by reducing waste. According to Ray Dodd, Flowlens has helped On-Systems implement lean practices to realise the following benefits:

  • Much better governance over our supply chain
  • Much better reaction times with our customers 
  • We can issue quotes a lot quicker

Correctly implementing a lean management system is not a simple task and requires time to test and tweak the system. However, choosing the correct MRP system goes a long way in streaming this process. Flowlens can help remove the unnecessary processes within your system and can provide a roadmap to make your MRP transition effective and efficient. 

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