Continuous improvement and Enterprise Resource Planning

The MRP production line

When a manufacturing business installs a new production line, the installation doesn’t stop the day the line is turned on. Excellent performance isn’t expected on Day 1, in Week 1, and often isn’t achieved in Month 1. The performance achieved initially isn’t accepted as the best possible – for a big investment, you have an ongoing Continuous Improvement Programme. You monitor performance and continually look for ways to improve.

MRP as a production line

Materials Requirements Planning (MRP I) and Manufacturing Resource Planning (MRP II) systems are production lines – production lines using data to create planning information for manufacturing and purchasing. The quality and timing of the data put into your Enterprise Resource Planning system (ERP) control the effectiveness of the planning information you get out.

• Where does the production line start? With the new product procedure.
• What is your manufacturing cycle time? Potentially your longest cumulative lead time
  from suppliers.
• How effectively is your product processed? Your inventory accuracy in both quantity and time is the effectiveness of your manufacturing process.

Treat your ERP like a production line

There is a tendency to treat business computer system as an ON/OFF process, which is either “working” or “not working”. This is limiting in the long term, because people think its “over” because it’s turned on.

If you are “up and running”, start measuring your effectiveness. Start a continuous  improvement programme on your ERP to get your full ROI.

(Originally published in the BCS Update, 2003)