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Integrating Lean and ERP in engineer/make-to-order subsea companies

Lookup NU author(s): Professor Christian Hicks


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Traditionally Lean has been successfully implemented in companies that produce standardized products in high volume. Lean focuses on continuous improvement that eliminates waste and streamlines flow to enable the efficient production of high quality products. Many companies have adopted Lean tools to suit their context. However, there has been mixed success. With Lean there are some limitations, for example with low volume, high variety production it is not possible to use Kanban or supermarkets for pull production due to unknown customer demand and production configurations. Likewise, ERP systems were originally developed for forecasting, production planning and inventory control in high volume manufacturing companies. They have also been applied in some companies that produce a large variety of complex products in low volume, but also with mixed success. ERP alone is a passive system that can be poorly configured, leading to long lead times and high inventory levels. However, combining ERP with Lean principles allows an active to system to be developed which maximizes efficiency, minimizes waste and supports continuous improvement. This paper utilizes a case study approach that explores how ERP can be used as an enabler of Lean flow in engineer/make-to-order companies that produce a high variety of products in low volume. It presents a typology that can be used as a theoretical framework for deducing appropriate ways of effectively managing production using project planning, ERP and Lean approaches.

Publication metadata

Author(s): Hicks C, Powell D

Editor(s): Edson Pinheiro de Lima

Publication type: Conference Proceedings (inc. Abstract)

Publication status: In Press

Conference Name: 22nd International Conference on Production Research

Year of Conference: 2013