Original Date: 02/09/1998
Revision Date: 04/22/2003
Information : Supplier KanBan
UE has implemented a KanBan approach with some of its suppliers. Of these, some operate as “breadperson” suppliers who deliver directly to the storage location of UE’s central stores. In these cases, the supplier comes in and checks the inventory to determine if the quantity of a part has reached the preset safety margin (typically a one-week supply of parts). Other suppliers are notified by UE’s purchasing group when the part quantities reach the preset level.
In the past, UE purchased parts in advance, stored them in a stockroom, and dispensed them as needed. In 1993, the company began using stock storage at the point-of-use in workcells. However, UE encountered inaccurate part counts, an increase of parts in inventory, and situations where the safety stock was used up without anyone being informed, resulting in production stoppage due to part shortages. In 1996, the company then started its Supplier KanBan system, using central stores for parts. The central stores have 1,550 purchased part numbers. A three-week supply of parts is the maximum in these stores at any time.
The first supplier to operate under UE’s Supplier KanBan system was the casting supplier. Here, UE notifies the supplier whenever the stock in the central stores reaches a one-week supply. The supplier then ships the product to UE on a pallet which contains a one-week supply wrapped in reusable packaging. After the parts are used, the reusable packaging is bundled and the supplier picks up the packaging when the next delivery is made. Another example is the metal bellows supplier who operates as a “breadperson” supplier. Here, the delivery person goes directly to the central stores and examines the part’s bin to see if more parts are needed. If this is the case, the supplier delivers a shipment to UE within the week. Currently, 35 suppliers operate on some form of the Supplier KanBan system, and more are being added.
The Supplier KanBan system is working well for UE. Parts are delivered when needed and no excess stock is maintained. Through a concentrated effort begun in 1997, the company is also decreasing the number of suppliers.
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