Why is it that some people feel the need to always be in one camp or the other? Mods or rockers, trainspotters or anglers, Eastenders or Coronation Street? 

Operations management professionals sometimes fall into the same trap. When we first heard of Just in Time back in the 1980s a significant number of people who should have known better started to write articles suggesting that we faced a choice. We could either stick with the computer-laden, push-based, complex Western Material Requirements Planning (MRP) systems or we could move to the simple, efficient visual control mechanism of kanban and the supporting culture of kaizen.

Of course this was nonsense. If we supplied product for which the market would tolerate no more than a 4-week lead time but for which the longest component supply lead time was, say, 16 weeks, and needed 4 weeks to convert into finished product, what could we do? We could use kanban to minimise work in progress levels of, say, sub-assemblies; we could rationalise our plant to reduce the in-house process times, we could work with suppliers to improve component availability but we still needed to generate forward orders for components and raw materials. MRP was the optimum way of doing this.

We now hear similar tales relating to the apparently broader Japanese approach promoted under the banner of Lean (the Japanese changed nothing but the West attached more appropriate nomenclature) and the more comprehensive computer systems marketed as Enterprise Resource Planning (ERP). Still people fall into the trap of believing that they must choose one or the other, that ERP is an obstacle to Lean, or that Lean businesses don’t need systems like ERP.

Why should this be? Well, there are no doubt psychological reasons relating to the child inside each of us needing to belong to a club. However, when it comes to business methodologies perhaps the basic reason is that sowing the seeds of doubt and confusion sells books and fills seats at conferences. Dare we say it on a consultancy web site, but perhaps it is seen as leading to businesses seeking professional support for change programmes?

Be that as it may, we in MLG want no part of such nonsense. ERP and Lean are in no way incompatible. Some businesses may not need integrated, sophisticated packages of the ERP variety and not all elements of ERP systems are desirable or relevant in all types of business. Equally, while the goals of Lean are universally desirable, not all the techniques are universally applicable.

The most glaring recent example of this nonsense being promoted was in the electronic journal of the UK’s Institute of Operations Management (IOM). The author in this case was actually a software supplier and the reasoning behind the argument of ERP being incompatible with Lean was actually a fairly transparent attempt to claim that his own company’s offering was better than standard ERP packages. However, there will be people who were feeling unsure about their own business’s direction for whom this ridiculous drivel was the straw that broke the camel’s back.

Ian and Robin picked this up with a letter to the IOM and perhaps the argument will run – the editor of the journal is certainly hoping so.

To close with a smile, what reason might the author of the recent article have given for ERP being incompatible with Lean? Well, you see, the core planning element of packages like Oracle, SAP, JDE, Mfg-Pro and so on is still MRP. Apparently, MRP needs a forecast and forecasts are always wrong, so MRP and hence ERP are wrong. QED! The business described above, selling products on a 4-week lead time despite the supply lead time being 20 weeks, is forecasting demand not because the business needs to but because the computer system needs it.

We thought about initiating a ‘tail wagging dog’ competition for the most glaring example of such rot, then realised that this one would never be beaten.

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