Purists might preach against mixing information technology (IT) with Lean manufacturing, but automation professionals like Darren Hogg aren’t listening. The IT director at WIKA Instrument Corp. ( www.wika.us) in Lawrenceville, Ga. has found that not only can IT support Lean principles, but also these principles can work at least as well beyond manufacturing. Because more manufacturers have made this discovery too, the philosophy has been evolving into a kind of Lean thinking that permeates every activity of a business, including information management. The results can be quite astonishing.

WIKA is a good example. After launching its Lean manufacturing initiative in 2001, this manufacturer of temperature and pressure instrumentation quickly discovered that achieving its efficiency goals would require more than moving equipment around. Management realized that it needed to broaden the initiative to include all of its business processes. The company now averages about two kaizen events a month for its business processes, which is the same rate as for manufacturing processes.

The change in focus was an important strategic decision because of the high cost of indirect labor and business related processes. Moreover, “we can produce a gage within about four minutes,” says Hogg. “That’s really the value-added from the customer’s perspective.”  As necessary as IT, order entry, and the rest of the organization are, they add little to no value to the products.

To focus the company more sharply on the customer, management decided to change its chief performance metric from production efficiency to on-time delivery. The move would solve some of its biggest problems. “We were roughly 60 percent on time, so customers were constantly calling us asking where their orders were,” recalls Hogg. Not only did the lateness generate a measure of dissatisfaction, but fielding the calls also was consuming resources.

After mapping the order-fulfillment process, the kaizen teams were able to streamline it. For example, one way was to remove three to four days from the order entry process and load orders directly to manufacturing. “Taking four days out of my business process translates into four days of cash because it allows me to get the customer the product faster,” notes Hogg. Another team tuned the company’s Dynamics AX 2012 enterprise resource planning (ERP) system from Microsoft Dynamics (www.microsoft.com/en-us/dynamics/default.aspx ) to generate better delivery dates. Now, the company ships 95 percent of its orders on time.

This ability to adapt the ERP system to support kaizen events was an important reason why Hogg decided to implement it in 2006. When selecting new software, his rule of thumb is find a package that will give you 80 percent of what you want and to tailor it over time. “You don’t want to spend years looking for the perfect one,” he says. Because the perfect one for a particular business probably does not exist anyway, he advocates using kaizen events and other Lean techniques to improve it over time through small incremental changes that take 30 days or less to institute.

Hogg, however, is selective about which changes he makes. “If a change is business critical, then we would modify the software,” he says. “If we determine that it’s not, then we live with what the software can do.”

Another reason that Hogg chose the Microsoft ERP system is its ability to support kanban and a move away from batch processing toward a pull-to-order flow. Because the company more than doubled sales and began asking customers to place smaller orders more often, production orders increased from about 14,000 in 2001 to about 160,000 in 2005. The average order used to be 200 pieces; now it is seven.

“To support the increased traffic, we needed a system that would react faster than the old one could,” says Hogg. Because of the difficulty in finding one, “we were starting to think that maybe Lean gurus James Womack and Daniel Jones were right in that we should throw the computer system out altogether.” He changed his mind in 2005, however, when he found Dynamics AX and an add-on pack from eBecs ( www.ebecs.com), a Microsoft integrator in Norcross, Ga. “The kanban functions allowed us to pull the materials to order directly to the manufacturing cell.”

Even though IT continues to play an important role in Lean manufacturing at WIKA, Hogg still takes seriously the spirit behind the advice given by Womak and Jones. “Computer systems can be data-hungry monsters that consume a lot of your time entering data that doesn’t really add much value,” he says. “You have ...