Report: Best-in-class manufacturers committed to lean

Enterprise resource planning (ERP) is viewed as a strategic weapon to streamline and automate business processes in order to improve efficiencies according to the recently published “ERP in Industrial Machinery and Components Manufacturing” benchmark report, announced by Aberdeen, a Harte-Hanks Company. Companies that combine lean manufacturing with ERP produce significantly more cost reductions and schedule improvements. Best-in-class companies make judicious use of selected lean methodologies and distinguish themselves by using 24 percent more modules and functionality available in their ERP systems. Findings in the report concluded that:

• Best-in-class companies achieve 96 percent inventory accuracy, manufacturing schedule compliance, and complete and on-time shipments

• Best-in-class companies have 120 percent to 320 percent more reductions in cycle times measuring bid preparation, manufacturing and order to shipment

• Best-in-class companies produce seven times (733 percent) more reductions in inventory levels than laggards

• Among those going lean, best-in-class firms are 82 percent more likely to do value stream mapping to remove waste from both manufacturing and non-manufacturing processes

• Seventy-four percent of best-in-class companies implement work cell manufacturing and 61 percent employ kaizen (continuous improvement teams) and adopt the 5-S’s (sort, set in order, shine, standardize and sustain).

“In the manufacture of industrial equipment and machinery, it is critical to provide visibility across the enterprise to all phases of the project or contract from the initial bid preparation process to the submission of the proposal, as well as the management of the processes involved from the award of a contract, project, or order, to final delivery,” said Cindy Jutras, vice president and group director, Aberdeen. “For these companies, the manufacturing processes often represent the lion's share of both time and effort, but also must be well-coordinated with all other front and back office functions.”

This study is made available to the public by the following underwriters: Cincom, Epicor, IBM, Infor, JobScope, and nFocus. To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=4156.