The Lean Benchmark Report
Figure 7 illustrates moderately improved performance for those companies that use ERP systems in four key areas: reductions in manufacturing and supply chain costs, improved customer service, inventory and asset reductions, and improved product quality. In gen- eral, packaged ERP solutions should provide a more stable platform from which to run extended processes; however, in many Lean organizations, there are unique requirements either within manufacturing or across the supply chain that demand custom or in-house software, often supplementing ERP.
Figure 7: Exceeding Expectations by Software Category
Reductions in manufacturing and supply chain costs
Improved customer service
Reduce inventory and assets required to produce and deliver product
Improve manufacturing and supply chain flexibility
Improved product quality
Source: AberdeenGroup, March 2006
Driving Operational Performance with Metrics
Much of the success attributed to Lean is based on its unrelenting focus on process stan- dardization and continually looking for ways to improve. Process standardization re- quires performing the same task time and time again, measuring standard performance on that task, and continually investigating ways to improve future performance. This prem- ise is based on the ability to measure, set standards, and work toward improved perform- ance. There are multiple levels of metrics:
First, individual metrics capture task or activity performance. Examples include through- put on a particular piece of equipment or SPC (statistical process control) results on a particular test. Individual metrics are designed based on the objective of one or multiple processes. Second, process metrics are designed to capture performance across a group of activities. Examples include order-to-delivery time and product-to-volume time. Finally, metric clusters aggregate the individual metric and metric sets to link with strategic ob- jectives such as quality, safety, and customer satisfaction.
During the course of this study, we asked study participants which metrics were most important to achieving success. Close to 80% of best-in-class companies cited on-time delivery among the top-three metrics, followed by 52% for inventory terms and 39% for
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