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FLEXO Magazine : February 2008
32 FLEXO FEBRUARY 2008 www.flexography.org ERP & Lean By David Taylor The printing and packaging industry is facing a number of challenges which threaten the very existence of many well-established companies. Historically, the industry has been extremely cost conscious, priced its products based on a cost-plus philosophy, and has been slow to adopt new concepts and technologies, such as Lean Manufacturing and ERP applica- tions. The procurement of a new press is often seen as a tan- gible and logical purchase with a clear "return on investment." However, this is in stark contrast to alternative investments such as the commissioning of a consulting project to create more in- tegrated business workflow. Additional challenges are forcing the pace on improved efficiencies, shorter runs and reduced waste. New competitors from emerging markets have entered the in- dustry and are gaining market share based on being a low cost provider. And in boardrooms, owners and managers are working harder than ever to do more with less. While the concept of Lean Manufacturing has been well estab- lished in traditional manufacturing environments, its adoption in the print and packaging industry has been slow. Many companies have embraced a number of Lean techniques, but have yet to fully realize the benefits of a holistic implementation. In order for these companies to survive in the competitive market, it is not a matter of if they streamline their business operations, but when. WHAT IS ERP? ERP systems are the latest evolution of a technique of plan- ning and controlling manufacturing businesses developed by the American Production and Inventory Control Society (APICS) in the early 1960s. Functionally, the current product offerings in this area are little different from IBM's mid-1970s MAPICS system, an early pioneer in the sector. These products are principally focused on manufacturers who assemble a range of standard finished products from a large quantity of parts and sub-components. These products can range in complexity from an automobile, which might comprise several thousand components, to a per- sonal computer with several hundred. Clearly, for this type of manufacturer, material planning is most important. You can liter- ally stop a production line at a cost of $1 million dollars an hour for the lack of a 10-cent component. The starting point for ERP software is to define every single component of the finished product. If you can imagine taking your car apart down to the last screw, you can appreciate how complex this can be. ERP packages use bill of materials (BOM) software to define how the finished product fits together. Maintaining a manufac- turing company's bills of material is a full-time job for a large department, because every small engineering change or improve- ment may result in a change to the BOM. The bill of material Photo courtesy Radius Solutions. TECHNOLOGIES & TECHNIQUES