Business Transformation

3 Little Signs Your CRM or ERP Implementation Might Be in Big Trouble

By | Business Transformation

When CRM and ERP projects fail, it’s not usually that the project team fails to get the software implemented. It’s that the project fails to help the business achieve its goals. Experienced project managers can save a project by identifying – and correcting – problems early-on in a project.

Fortunately, there are warning signs along the way.  The three red flags we see most often are when:

1. The management team isn’t actively involved.

Of course, executives need to delegate tasks, but delegating a CRM or ERP project is a mistake. The management team’s close involvement communicates commitment to the project, and serves to keep the technology implementation aligned with the organization’s overarching business goals.

2. You’re holding too many extra meetings.

One of the surest signs that trouble is brewing is lots of side meetings and communications, which result in continual requests for modifications. If the project has not been properly scoped out, you may uncover issues that make it impossible to stick strictly to the project schedule.

3. The project team is becoming indifferent.

At times, project management meetings can get heated, as departments work to find common ground and solutions to complex issues. Too much friction can be a problem, but even more worrisome is apathy from project participants.

How can you ensure your CRM or ERP project is a success?

  1. Use phase one of your implementation project to completely scope out the project in as much detail as possible.
  2. Identify an executive sponsor who will be closely involved with the project from beginning to end.
  3. Set realistic budgets and resource commitments. Find ways for the project team to offload some of their regular responsibilities to free up time for project work.
  4. Hire an experienced implementation team.
  5. Formalize the change management plan and training processes.

Unlock Strategic Value in your Software Implementation

Over 50% of ERP/CRM projects are deemed a failure. Learn what to consider before thinking about new technology and how to prepare for your project to ensure success.

Download the Whitepaper

Author: Howard Hohnadel, Director – Business Transformation

5 Ways to Reduce Your Manufacturing Inventory Costs

By | Business Transformation, Lean, Manufacturing

Do you feel constant pressure to reduce manufacturing inventory costs? You’re not alone! 

On one hand, if you don’t have enough of the right inventory on hand when it’s needed, you risk damaging customer relationships. Your customers are counting on you to have what they need on hand when they want it.  In a worst case scenario, low inventory levels can cripple your business. Without product to ship, you won’t have revenue coming in.  Without a good reputation for delivering on your promises, customers begin to disappear.

On the other hand, you don’t want to be carrying too much inventory either. Too much inventory brings the risks of obsolescence, damage, and additional storage/carrying costs. The problem is compounded for many US-based manufacturers because it is commonplace to now outsource most high-volume manufacturing overseas to China, Mexico and other countries with lower-cost manufacturing. That means, the inventory that you have on hand is all for the high-mix, low-volume work.

How do you lower inventory costs when you are charged with producing 5-10 pieces at a time instead of 1000s at a time? 

Here are 5 steps we recommend regularly for our high-mix, low-volume manufacturing clients:

1. Adopt a single piece flow mentality

Single piece flow eliminates waste by working on one product at a time. While not always practical (like when you have high change-over times), it is an ideal state of lean manufacturing to achieve single piece flow whenever possible.  Benefits include improved quality, lower defects, less inventory holding risks and improved manufacturing flexibility.

2. Find strategic suppliers

Reduce on-hand inventory by developing relationships with suppliers so you only get what you need for a given day.  Working closely with your key suppliers, you can reduce the amount of safety stock you carry as buffer against missed deliveries once they have proven to deliver consistently on time.  Then you can reduce the lot size on your orders.  You won’t then need so much warehouse space and your manufacturing environment overall will stay more organized and become more efficient.

3. Eliminate or reduce buffer inventories

When single piece flow isn’t possible, you may need to establish some buffer inventory in WIP so that your downstream processes can keep running.  However, you always want to keep looking for ways to eliminate or reduce these buffer inventory stock levels.  Reducing downtime, yield loss and change-over times allows you to reduce your buffer inventory.  Calculate this using EPEI to get quantitative insight. If you have to use buffer stock, set up the inventory pulling process to automatically trigger the buffer stock replenishment process.  “Take one, make one” is a great motto, but again, not always possible for the same reasons that single flow processes aren’t always feasible.

4. Get rid of expensive equipment

If you have equipment that’s expensive to own, expensive to run and or expensive to maintain, ask yourself, “Can you get rid of it?” Look for how you might outsource that process to reduce your expenses and eliminate any manufacturing bottleneck for creating downstream or finished good inventory.

5. Connect sales orders to manufacturing

When the sales order processing system and the manufacturing resource management system are disconnected, you risk running into all sorts of issues.  Sales may think that materials are on-hand, but in reality they’ve been committed to another customer order.  Linking Sales Orders with Manufacturing  eliminates duplication of effort and makes it clear what is available-to-promise. Orders can be broken into digestible chunks for production. Inventory levels stay balanced.

9 Ways Manufacturers Squeeze Revenue & Sweeten Profits

If you feel the squeeze of being caught between customer expectations and supplier demands, download our whitepaper for a recipe for Manufacturing Management success.

Download the Whitepaper

Author: Doug Bulla, VP Business Development

Starting your Lean Manufacturing Journey

By | Business Transformation, Lean, Manufacturing

Every journey begins with a first step. And the first step is deciding, “Where do I want to go?”

Lean Manufacturing is a process that is designed to take your manufacturing production from supplier to customer with no wasted effort or steps:

  • Perfect flow
  • Zero safety incidents
  • Zero product defects
  • Zero waste

In an ideal lean manufacturing scenario, you deliver exactly what the customer wants, exactly how they want it, and exactly when they need it.


That’s the halting sound of reality. While the utopian dream of constructing a perfect lean manufacturing system may remain eternally elusive, that doesn’t mean that the effort is futile.

As defined by the Lean Enterprise Institute, lean manufacturing is the principle of “maximizing customer value while minimizing waste.”

Step 1: Pinpoint your destination

Like every journey, we begin with the end in mind. For a lean manufacturing journey, we begin by asking these two questions:

  1. Where can we maximize customer value?
  2. Where can we minimize waste?

Some organizations have clear priorities. Others may have to do some discovery work to figure out where they should prioritize their efforts. If you’ve never embarked on a lean journey before, it’s wise to hire a “lean Sherpa” or as we more commonly call it, a consultant to help guide your way. Pick a few key priorities where you believe you have the most to gain.

Step 2: Decide if the lean journey is work the risk, time and effort

Can you forecast a high enough ROI (return on investment) to take on this project? We use a tool called ManufacturingCONNECT for Lean to visualize various “what if” scenarios. Other companies use complex Excel spreadsheets to forecast potential costs and savings.

Step 3: Build Your Lean Team

Lean is more than tools and takt time. It’s a mindset. For lean to be successful, lean principles must permeate throughout the company culture. The Lean Leaders you select should have time to devote to the project, be passionate about the company, and willing to embrace change. As the Lean Team builds the Lean Project Plans, they also need to create a communication and change management strategy to help the entire company learn and embrace Lean Manufacturing.

Step 4: Set Bold Goals

Make them visible. Build a vision for each area about why change is needed and what the expected results may look like. These goals must have buy-in from Executive Leadership.

Step 5: Build Your Lean Project Plan

Identify all the resources you need to execute your lean manufacturing plan. Your manufacturing systems may need to be upgraded, changed or replaced to support your lean manufacturing initiatives. Develop a reasonable timeline, but one that gets you into action as soon as possible, creating visible results. Start small and expand scope as you build momentum.

One final piece of advice is that we recommend you begin evangelizing Lean Principles as early as you can. Develop a strong communications plan. Develop training programs to get lean into the hands of your supervisors and engineers. Our “Learning Lean with Legos” training program is one of the most popular and fun ways we’ve taught lean concepts.

Learn the Benefits of a Lean Transformation

Download the Whitepaper

Author: Phil Coy, Managing Director – Manufacturing Excellence

Why ERP and CRM Projects Fail to Meet Expectations

By | Business Transformation

Companies invest in ERP and CRM projects to improve their business processes and performance. With so much time, effort and money put into these projects, why don’t they succeed 100% of the time?

  • Is it the consultant / implementation partner chosen?
  • Is it lack of preparation by the company?
  • Is it because companies pick the wrong ERP or CRM system?

While all of those factors may be contributors, the truth is that most ERP and CRM projects don’t really “fail” – they only fail in terms of meeting expectations.

That’s an important distinction!

Whatever system you choose, it’s likely that you and your team will be successful at getting the software implemented. The challenge is “meeting expectations.”

Why do ERP and CRM projects fail to meet expectations?

In most cases, ERP and CRM projects start at the wrong starting point.  In theory, you’re buying new business management software to solve a set of problems, but that’s the wrong way to think about it.  That mindset immediately puts you in “reactionary mode,” when you should be proactively working to turn your vision into reality.

Instead of looking for slight improvements to your business processes, and reacting to the shortcomings of your existing systems, start by asking, “What’s possible?”

What’s possible?

What are you really trying to achieve? Before engaging in a software selection process, get crystal clear about your 5-year business goals. Quantify a few select goals around how you plan to:

  • Be a market disruptor
  • Improve customer loyalty
  • Gain market share
  • Improve worker productivity

Work backwards from those goals to build your strategy, and detail the tactics you’ll use. Only then is the right time to consider software. Your software implementation partner should understand the strategic initiative, not just the features and functions you think you’ll need. Often, your implementation partner can provide valuable insight into various options to meet your goals.

When you define your business goals before selecting software, you improve your chances for a successful ERP or CRM project that actually meets your expectations!

Unlock Strategic Value from Your Next Software Implementation!


The trouble with data cubes

By | Business Transformation, CRM, IoT and Analytics

Data cubes are a vital part of today’s business analytics landscape. In geometry, a cube is 3-dimensional. In technology, data cubes can be multi-dimensional. Data cube technology allows users to slice-and-dice information in various ways to explore the relationship between data points.

While data cube business analytics tools are essential for analysis of business data across the enterprise, deploying them as the only source of modeled data is not sustainable. They represent an immense advantage over older tools, but still have a number of limitations.

  1. Building the data cubes can be a long, slow process.  Cubes can aggregate information from multiple sources. The more sources and the more data, the longer this process will take. Be sure you have dedicated some heavy-duty hardware to handle this job.
  2. Limitation of data fields. A cube is intended to be used for rapid analysis of limited data sets. Cubes are not designed to function with large data sets, and have a limited range of historical data as well as fields (dimensions) that can be loaded. Dividing large data sets across multiple cubes creates duplication and loading problems, resulting in very high maintenance and resource costs.
  3. You’re not looking at real-time data. The data that is pulled into data cubes has already been summarized. Detail can be found in the source system, but users can’t drill into it from the cube. The advantage of this is that analysts have a “snapshot in time” they can use as a benchmark, plus the system will run faster.
  4. Cubes must be optimized for performance. There’s an art and a science to aggregating all this data. If users are complaining that it is taking too long to manipulate data, you’ll need an expert on hand who can optimize the relational database design and find ways to improve cube performance.
  5. Cubes are not designed to be a data repository. Cubes being used as a sole data source for analytics and reporting will ultimately accumulate transactional data and fail to load. Reporting performance from them will slow gradually as the size of the cube grows.

Having worked with business analytics tools throughout my career, we decided to build a data foundation which operates as the data source for all cubes across different business functions. A single data model containing all data across AX modules enables users to build cubes rapidly because the dimensional model used to build a cube is identical to the dimensional model in the data warehouse.

DataCONNECT, mcaConnect’s data warehousing solution for Dynamics 365 and Dynamics AX, is able to be deployed extracting multiple data sources external to AX, such as payroll, billing, logistics, factory management, CRM, Excel, Access and more.

Combining all business-critical data into one single consolidated data model allows for diverse cubes to be built without requiring any transformation. For users not needing a multi-dimensional view of data, the data warehouse is also able to be queried directly from any BI Platform.

The DataCONNECT solution has several distinct advantages over cube technology.

  1. You retain the ability to drill down into the source data
  2. Lowest level of detail is always available
  3. Provides nearly real-time analytics
  4. Hundreds of leading and lagging business indicators are made available to load to cubes
  5. You get answers significantly faster than you would with building data cubes from the ground up
  6. Historical information can also be accessed

Want to learn more? Download the DataCONNECT fact sheet

Value Stream Mapping: Do your materials move by magic?

By | Business Transformation, Lean, Manufacturing

Does your lean manufacturing value stream map include movement of materials between processes?

Value stream mapping is one of the most common and powerful tools used in lean manufacturing . As the name implies, the map visualizes the sequence of processes that create customer value in an enterprise. For manufacturing companies, customer value is predominantly built into the capabilities and features of the product itself. As a result, value stream mapping most often shows the physical processes like machining, painting, assembly, and shipping. What value stream mapping often misses is how those materials move between processes.

Creating a manufacturing value stream map

Value stream maps typically are created from walking the shop floor, interviewing operators and capturing results using sticky notes on a wall. This allows for the flexibility needed, especially when different products have different paths through the manufacturing processes. Lean manufacturing literature is full of examples of value stream maps. The problem is that they are all wrong.

Well, maybe not exactly wrong, but I have yet to see value stream maps that include the level of detail that defines material movement. In talking with operators, the focus is on their process, and justifiably so, but it’s as if the components needed by a process just magically show up when needed and the products produced by the process are magically removed and off to their next step. Occasionally you’ll see a kanban board symbol…but a picking list, never!

Photo credit: mannewaar

Visualizing a complete production system

A complete production system includes:

  • How component parts are ordered
  • How component parts are received
  • How component parts are moved from their stocking location to the actual point of use on the shop floor
  • How defective components are removed and returned or scrapped
  • How defective products are reprocessed for correction
  • How defective products are torn down if components can be reclaimed
  • How good products are moved along to the next process
  • How good products are put away in inventory

Some people would argue that the point of a value stream map is only to surface waste in order to focus on kaizen activities. That’s true and is definitely the top benefit of a value stream map. However, value stream maps are an excellent way to document your processes in very specific detail.

Importance of understanding material movements

Let’s look at just one example of the material movements that could come into play for a typical machining process. The process uses 2 components that are machined and then bolted together into a single unit.  The first component is high value and is controlled in restricted inventory. Only when that part is used is the specific quantity released from the stockroom to the point of use location in the work cell. That’s done with a picking list.

The second component is lower value and is shipped shrink-wrapped on full pallets. It’s high volume so when a pallet is emptied, a new pallet is moved by forklift from the stockroom to an inventory location near the work cell and then individual units of the component are loaded into workcell flow racks at true point of use.

In this case, we have a two-step movement to get components from stores to point of use. Control of this movement could be via a picking list, a kanban, a fixed card, or managed by a warehouse management system (WMS).

The third component are the bolts which are not managed in stock at all but expensed to WIP on receipt and then held in buckets at the work cell locations. A material handler lets a planner know when the bucket is getting low – visually.

In this simple example, we have 3 different approaches to move materials and options from fully automated to entirely visual with no transactions.

Do your value stream maps distinguish how the parts move or is it magic?

The Benefits of Lean Transformation

Eliminate waste. Reduce time. Increase productivity and profits. Learn how in this whitepaper.

Download the Whitepaper

Author: Phil Coy

Getting to the Aha Moment Faster

By | Business Transformation, Lean, Manufacturing

The Way Things Work Around Here

Most manufacturing employees are comfortable in their routines. They are used to what they do and have become as productive as they can with what they have.  Any change in operations can be perceived as a threat to their continuing productivity and at odds with “the way things work around here.”

In our work, the new practices we introduce are not obvious or easy. Employees must learn:

  • Lean Manufacturing principles, like pull and flow
  • How to use the new Microsoft Dynamics AX ERP system, and find where all the functions are hidden
  • An entirely new vocabulary of terms, “What the heck is takt time or operator balance or kanban? Or with Dynamics AX, what’s a throughput ratio or a kanban rule?”

Implementation teams can struggle mightily to learn Microsoft Dynamics AX Lean Manufacturing functions.  With so much to learn all at once, it can take a couple of weeks to train people in all the various parameters and setup data from production flows to kanban rules and workcells.  By then, people are often frustrated!

A Better Way to Learn Lean Manufacturing

The typical manufacturing employee is very linear, hands-on, and concrete in their thinking. Learning lean manufacturing principles through simulation games is a natural fit, and provides a better experience than teaching through a series of lectures and hand-outs.

To setup a simulation game takes time, creativity, plastic bins, a map of the shop floor – and lots of Legos®! Plus, you’ll also need to have Microsoft Dynamics AX running on laptops, and bring in the scanners and bar-code printers you’ll use later in your production environment.

Once the simulation is setup and you are ready to run Lean Manufacturing in Microsoft Dynamics AX, the simulation game itself actually quite easy, visual, and simple.

Our First Experience Using Legos to Learn Lean

Since our customer was planning to roll out lean and AX in every plant with a wide range of products, we decided that the simulated “products” we would build with Legos would be very simple but representative of their world. 

Multiple products would go down the same production processes. Two levels of a bill of material (BOM) for multiple subassembly operations fed into a final assembly operation.  Inventory would
be drawn from supplier-owned inventory, purchased inventory, and a pick-to-ship process.  We designed mats that we could print on a plotter to layout the “shop floor” on tables and got some plastic bins for inventory locations.

In Microsoft Dynamics AX, we defined the items, bills, production flows, workcells for our representative operation.  We used as many lean features as we expected they would use in their operation including event kanbans, scheduled kanbans from MRP, and traditional circulating kanban cards.

Finally, we wrote scripts for each round of simulation with instructions on how to build the Lego products, where to put them, what to scan or update in AX.  Each job role (the operators, material handlers and warehouse workers) had their own specific script.

Our simulation included all aspects of the lean operating environment, and gave the users a chance to try out the actual software and hardware that would be available in production.

Faster & More Fun Than Traditional Training   

Every audience within the company loved the simulation games.

  • The implementation team could trace material movement and try new ideas out.
  • The operators found the system easy to use & understood their part in the overall process. Plus – they were having fun as they learned.
  • The executives could see how lean would function in their business.
  • The operational excellence people decided they would use the simulation going forward as a way to train new employees in lean thinking.

Setting up a lean simulation took some time and care, but not a lot of money. The results have been well worth it! We see everyone getting to their own “aha” moment earlier than ever.

Recently, we hosted an event, “Learning Lean Simulation Using Legos” where I shared more about our process:

Written By:  Phil Coy

Lean Production Scheduling in Dynamics AX

By | Business Transformation, Lean, Manufacturing

]Let’s look in some detail at production scheduling for lean manufacturing in Dynamics AX.  If you haven’t read my blog series on production scheduling supporting lean principles, I encourage you to read it first.  Building on that knowledge base, we’ll take a look at how Microsoft Dynamics AX supports these seven guidelines for designing a future state with a special emphasis on production scheduling.

The seven lean manufacturing guidelines for the design of a future state value stream are:

1. Produce to your takt time.
2. Develop continuous flow wherever possible.
3. Use supermarkets to control production where continuous flow does not extend upstream.
4. Try to limit the customer schedule to only one production process.
5. Level the production mix by distributing the production of different products evenly over time at the pacemaker process.
6. Level the production volume by releasing small, consistent increments of work at the pacemaker.
7. Develop the ability to make “every part every day” (then every shift, then every hour, or pallet or pitch) upstream of the pacemaker process.

From Lean Enterprise Institute “Learning to See” workshop version 1.2, 1999

  1. How Microsoft Dynamics AX Can Produce to Takt Time

The truest method to produce to takt time is to make to order.  Microsoft Dynamics AX provides “event kanbans” that are driven from sales orders.  When a sales order is taken, a kanban is generated automatically, matching the quantity and due date.  That works nicely for final assembly.  An “event kanban” can also include a kanban line event so that when a kanban is created for a downstream production flow, a kanban to matching the quantity and due date is generated automatically for the subassembly required by the downstream production.  In this way, make-to-order manufacturing (MTO) is supported through multiple levels of the bill of materials (BOMs).


  1. How Microsoft Dynamics AX Can Develop Flow

A lean value stream is defined in Microsoft Dynamics AX as a production flow with multiple activities.  Each activity corresponds to a lean process.  AX allows you to build a product through multiple activities and record the product as semi-finished along the way without either having to have a level of the bill of material or receive the product into inventory.

This flexibility allows you to define your flow of multiple processes together.  You may decide to setup a U-shaped cell with multiple operator stations or create flow line with multiple work stations.  Kanbans set up for these flow situations show on the operator board as pegged requirements, allowing the operator to see the status of work coming from upstream activities.

NOTE: You must design your material flow first to support your visual factory, and only then configure AX to match that physical flow.  All of this is done by configuring standard software without any need for the IT Department to be involved.


  1. How Microsoft Dynamics AX Works With Supermarkets

Upstream from where you can flow, you must plan for intermediate inventory buffers. (In lean, we call these supermarkets.) These supermarkets ensure that downstream processes always have inventory available when needed to support customer orders.

As materials are withdrawn from the supermarket, pull signals or kanbans can be generated to build enough to replenish the supermarket to targeted stock levels.  This make-to-stock manufacturing (MTS) scenario is supported by two methods in Dynamics AX.

  1. Classic fixed kanban cards can be used to automatically replenish when inventory falls below a reorder point. Kanban cards can be pre-numbered for cards that cycle out and back quickly or can be one-time use kanban cards where a new kanban ID is assigned for each cycle to replenish.  Microsoft Dynamics AX includes kanban calculations to calculate the number of fixed cards needed based on transaction history and forecasted demand.
  2. Scheduled kanbans can be generated from MRP in a very complete integration supporting all the planning and aggregation capabilities of a full-featured MRP. Scheduled kanbans can be automatically generated to replenish stock to targeted levels.  This is more dynamic and flexible than fixed cards since kanbans are generated with the specific quantity needed.


  1. How Microsoft Dynamics AX Does Pull Scheduling at One Point

The lean principle is to schedule customer orders at one point and allow the rest of the value stream to respond with flow downstream and pull upstream.  This scheduling process can be easily designed to be implemented by Dynamics AX.  With the flow example above, the customer order generates the kanban at the first of the flow processes down the value stream.   That kanban can automatically generate subassembly kanbans for feeder areas to produce and can automatically generate withdrawal kanbans to move component inventory from stockroom to lineside locations.

A complete collection of kanbans for moving material and multiple subassemblies for feeder area production can be generated from a single customer order all automatically and all pegged to the original order.  For more complex situations where there are multiple production lines that must be balanced, mcaConnect offers a Fixed Interval Scheduling add-on for load balancing, substitutions, and configuration management.


  1. How to Level the Mix with Microsoft Dynamics AX

Leveling the mix involves distributing the work to produce different orders evenly over time.  Leveling can be done by the workers at a workcell using visual displays in Dynamics AX to see the overall loading of a workcell for the upcoming week.  Operators can then shift orders and sort like products together in order to group work together over their planning cycle.  For example, if a paint line has 3 days visibility of orders, the team leader can group work together as needed to minimize changeovers and smooth spikes and dips without compromising on-time delivery.


  1. How to Level the Volume with Microsoft Dynamics AX

Leveling the volume is to release a small increment of work on a regular schedule and monitor completion of each increment.  This is the lean concept of pitch.  As an add-on to standard Dynamics AX, mcaConnect offers a Fixed Interval Scheduling solution that supports this concept to level the volume and manage operations in short increments.  Each schedule is confirmed for both material and capacity before release.  Component substitutions are supported and as-built configurations captured.  Automatic load balancing across multiple lines supports leveling both mix and volume together for complete control of your total operations.  This supports ship-complete as well as partial shipments.

  1. How to Use EPEI to Size Upstream Supermarkets

Microsoft Dynamics AX allows you to set targeted inventory levels including safety stock by item at every location.  The MRP system will then plan to replenish to those stock levels automatically providing action messages or planned orders to help the planner identify situations where action is needed.

EPEI calculation is not done formally by Dynamics AX but the results of your EPEI are used in establishing production lead times.  mcaConnect offers the Areteium lean transformation toolkit, which has very complete calculations for EPEI for a wide range of complex manufacturing processes.  The results of the EPEI calculation from Areteium can be updated automatically back into Dynamics AX.

Obviously, there’s much more that could be said.  As you can see, Microsoft Dynamics AX as a top tier ERP solution provides a very comprehensive and solid enterprise business platform to support truly lean operations.

Learn how to address the challenges of high mix, low-volume manufacturing.

Want to learn more about Areteium or mcaConnect’s Fixed Interval Scheduling solution?

Contact me to learn more!

Written By:  Phil Coy

Production Scheduling – Every Part Every

By | Business Transformation

This post is part of our series discussing the 7 lean manufacturing guidelines. In this post we’ll discuss the every part every interval – EPEI – metric.

Post 1: The 7 Lean Manufacturing Guidelines
Post 2: Building to Takt Time
Post 3: Developing Flow
Post 4: Supermarkets & Pull
Post 5: The Pacemaker Process
Post 6: Leveling the Mix
Post 7: Leveling the Volume

The last of the seven guidelines for designing a lean future state is to develop the ability to make “every part every day” (then every shift, then every hour, or pallet or pitch) upstream of the pacemaker process.

The EPE & EPEI Lean Manufacturing Metric

Every Part Every (EPE) or Every Part Every Interval (EPEI) is a key lean metric especially for high mix manufacturers where machine changeover times are critical to determine available capacity. In brief, EPEI is the length of time that it takes to cycle through all the members of the product family including the changeovers between products. Or looking at it another way, EPEI sets your production batch sizes and therefore buffer inventory levels. The math for an EPEI calculation can be a bit daunting. See my blog series on EPEI for all the details on both the math and the meaning.

Calculating EPEI

EPEI should be calculated for every machine-based process and then used to establish the targeted stock level for all of your intermediate inventories replenished by these machine-based processes. That’s why the guideline is specific to upstream of the pacemaker.

Note carefully that the guideline is not to just calculate and know your EPEI but to work to continuously reduce that EPEI. In doing so, you continue to free up inventory and reduce overall lead time. In fact, EPEI is an excellent candidate for an overall lean metric that you should want to track over time to ensure that your EPEI is continually reducing.

Since this series is focused on production scheduling, it’s worth noting that EPEI is not directly related to any new production scheduling technique. It’s useful in helping to set your targeted stock levels for all of your upstream inventory supermarkets.

Future State Design Requires EPEI

Your future state design isn’t complete until you have calculated EPEI for each machine-based process and have compared to your targeted stock levels in supermarkets.

I hope that this series has been helpful to explore the various methods of lean production scheduling and how the future state design guidelines help you to identify opportunities to continually reduce lead time and reduce waste in your operations.

In future posts we’ll look at how production scheduling using lean principles is implemented in Microsoft Dynamics AX Lean Manufacturing.

Written By:  Phil Coy