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Project Brief

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Kanban System Solves Major Supply Chain Problem

A Fortune 500 manufacturer was experiencing difficulties with the start-up of a 3rd party logistics center. The project was over-due and over-budget. Much of the expensive delay was related to a lack of agreement regarding the necessary design and launch of a new kanban material replenishment system. Without the leaner inventories anticipated as a result of the kanban system, the space allotted in the warehouse facility chosen as the logistics hub would not be sufficient.

Systemental worked with the client’s in-house resources to complete an initial assessment, process design and pilot trials of a new kanban system. Systemental developed web-based software tools to work with the clients ERP system. A Systemental project management professional ensured coordination between the client’s multiple manufacturing facilities, headquarters, IT department, supply chain department, the 3rd party logistics company, and tens of supplier companies.

The pilot trials and new software broke the major project loose and led to nearly a million dollars of fast inventory reduction. In addition to inventory savings, the work was essential to the elimination of tens of thousands of dollars in monthly project overrun costs.

Summary

Client Fortune 500 Manufacturing Truck Component Manufacturer
Supply Chain Problem Excess inventory and lack of a Lean material replenishment system stall the launch of a major 3rd party logistics center. The client faces hundreds of thousands of dollars of unnecessary costs.
Solution Systemental detailed analysis of product movements between three factories, a multitude of suppliers and the proposed warehouse hub, confirms the opportunity for reduced inventories. Process design followed by pilot trials demonstrated the effectiveness of the proposed kanban system. Systemental’s development of custom software tools facilitates adoption across multiple locations. Impacts: stalled project gets moving again. Inventory is reduced, and waste is eliminated leading to improved manufacturing, warehousing, distribution, and production planning.
Results Annual savings: hundreds of thousands of dollars in lower inventory costs, reduced project overrun costs and faster realization of the savings anticipated from the 3rd party logistics center project.
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