Julie Fraser: Why buy plant software in a Lean environment?

Is this a contradiction? On the one hand, several recent studies by analyst firms—including mine—place plant operations software on the top of manufacturers' shopping lists. On the other hand, most companies are pursuing Lean manufacturing—an environment where many practitioners believe there is no place for software.
By Julie Fraser September 1, 2007

Is this a contradiction? On the one hand, several recent studies by analyst firms—including mine—place plant operations software on the top of manufacturers’ shopping lists. On the other hand, most companies are pursuing Lean manufacturing—an environment where many practitioners believe there is no place for software.

Are they right? Is it just those companies without any lean pursuits that want to buy software for the plant?

Lean purists are partially right. We agree that many types of software work against the smooth functioning of lean practices such as kanban and one-piece flow. Employees must first learn sound lean practices, and software that does not support them is not appropriate. We also see that a relatively standard product manufacturing environment can work efficiently with no plant software.

However, software can bring some capabilities to the plant environment that are very difficult—if not impossible—to achieve by other means. Some plants won’t need these capabilities, but many will. We believe companies with these needs are buying plant software, whether they have a lean initiative or not.

  • Track & trace : Many industries now require full product histories, tracking all materials back to their sources. Required or not, track & trace is good business. It reduces warranty and recall costs, and risk to brand image. Track & trace also identifies supply problems quickly. Nearly all manufacturing execution systems (MES)—as well as a few ERP solutions—include track & trace.

  • Work instructions : Standardized work is a tenant of lean. In a high-mix environment, or one with frequent new products or product changes, this is a challenge. One of the easiest ways to ensure quality and efficiency is to provide up-to-date work instructions. Work instruction capability comes from specialized vendors, as well as MES, computer-aided process planning (CAPP), and some product life-cycle management (PLM) and ERP providers.

  • Resource allocation : Plants with multiple products running through expensive capital equipment, or that have highly skilled production employees that cannot all be cross-trained, may need to juggle these resources. Detailed or finite capacity scheduling systems are ideal for this type of environment.

  • Performance dashboards : Everyone wants to see performance data, and our research with MESA shows that those who succeed in dramatic performance improvements to business metrics are more likely to be accessing timely, accurate views of operations performance based on automated data collection. Manufacturing intelligence is offered stand-alone, or from an MES provider.

Software also extends visibility into the plant—e.g., kanban can communicate current demand to suppliers, but doesn’t show quality or other issues. Lean’s line-of-sight management also does not help other internal departments enhance customer service, or generate better product designs.

Lean can create the low-cost, efficient operations needed for survival. Most companies don’t want to be just low-cost survivors, so we expect to see plant software adoption rise as well. Those plant operations that can better respond, innovate, and share information will find that greater opportunities await.

Author Information
Julie Fraser is Principal of Industry Directions Inc., and has been an industry analyst, consultant, and marketer for more than 20 years, specializing in manufacturing value network processes and systems. Julie can be reached through Manufacturing Business Technology or e-mail at jfraser@industrydirections.com