Dec 15 2011
The following is lifted from the quarterly report of a public company and is attributed to the CEO:
We experienced a temporary increase in backorders at the close of the first quarter as we rebalanced inventories as part of our lean manufacturing initiatives. […] We also implemented a new ERP system during the quarter that will enhance our real-time information for inventory levels, shipments, sales information and production costs.
It seems that the leaders of their Lean Manufacturing initiatives forgot one key principle: First, do no harm! A professionally planned and executed Lean Manufacturing initiative enhances performance. It does not decrease it, even in the beginning and even for the short term.
It is essential for the long-term success of the initiative that its first pilot projects be unquestionable, rapid, obvious successes, and projects that lengthen order fulfillment lead times do not qualify. Nothing should ever take priority over delivering to customers, even Lean.
Furthermore, implementing a new ERP system before you are far enough along in Lean is a generally ineffective for two reasons:
- Lean changes your business processes, and embedding your old business processes in an ERP system is a waste of time and will make the changes more difficult.
- The implementation of ERP is a resource drain that you cannot afford while implementing Lean.