Introduction

Companies that use ERP and MRP systems are constantly looking for solutions to increase inventory turns, streamline the procurement process and improve supply chain agility. Many of these companies assume that the only way to reduce cost, lower risk or increase flexibility is to improve forecast accuracy. But various factors including customer demand variations, changing market conditions and questionable sales projections make it exponentially difficult to improve forecasting. One solution that most of these companies often don’t contemplate is moving away from a forecast based or MRP replenishment methodology to Electronic Kanban (eKanban) for high consumption items.

While manual shop floor kanban systems are common practice within manufacturing plants,manual supplier kanban systems are much rarer. One of the primary reasons for this is the difficulty faced when trying to scale a manual visual kanban system beyond the four walls of the plant. However, the operational and financial benefits of supplier kanban are so great that manufacturing firms are now looking to electronic supplier kanban systems (a.k.a. supplier ekanban) as the answer to their supplier kanban needs. The following list was compiled from feedback by Ultriva customers over the past 12 years of implementing successful supplier ekanban programs.

We all understand how difficult it is to change the wheels on a moving bus. If you've heard that analogy applied before, it was probably to justify why business transformation or a change in process is so difficult.

What do distributed manufacturing, changing customer demand patterns, global supply chains, undesirable growth in inventory, and increasing pressure to reduce costs and improve profitability all have in common?   These are just a few of the challenges faced by today’s manufacturing executives.  Wouldn’t it be great if there was a system out there that could address each of the aforementioned challenges cost effectively and efficiently?  Well there is, it’s called a pull system (a.k.a. kanban) and it has been around for a long time.  Properly implemented, pull systems produce remarkable results.  So why isn’t pull more pervasive in manufacturing?  The simple reason is there have been more failures than successes.

Walk through any manufacturing facility and you’ll notice they all have the same type of charts displayed on the walls, bulletin boards, or electronic displays highlighting results of lean six sigma programs. The shop floor constantly runs Kaizens to improve factory-floor operations.

Surprisingly, most of the emphasis on the shop floor has been on streamlining production, relocating equipment, reducing production down time, and optimizing production capacity. Everything is focused on activities within the four walls of the factory shop floor. A very small percentage of these activities revolve around improving on-time-delivery, or improving supplier collaboration and material availability (i.e. processes that are occurring outside the facility).