Kanban Can Make A Difference

An e-kanban solution helps manufacturer reduce inventory by 43%.

Implementing a kanban system with suppliers helps manufacturers reduce the risk of over-stocking or running out of stock. It's a best practice that a majority of IndustryWeek's Best Plants winners use to become world class. Specifically, 49% of Best Plants winners from 2002 through 2006 have "some" kanban system in place, and 47% state "wide" usage of kanban, according to the 2006 IndustryWeek Best Plants Statistical Profile.

For Commercial Vehicle Group Inc., a New Albany, Ohio-based supplier of fully integrated system solutions for the global commercial vehicle market, an electronic kanban solution helped the company increase inventory turns by 28% and reduced overall inventory by 43%.

"We benchmarked several opportunities to control kanban and inventory," notes Bryan Stiles, vice president of strategic business development at CVG.

Ultimately, CVG went with a solution from Ultriva Inc., a provider of electronic kanban software.

"It was Web-based, which made our program accessible to all of our suppliers large and small," says Rick Clevenger, director of IT for CVG's interior systems division. "Another attractive element is that it is using the Microsoft family of products -- both SQL Server 2005 and Visual Studio.net. And finally, Ultriva's electronic kanban system seamlessly integrates with CVG's back-end business systems."

Stiles notes that the solution gives CVG real-time opportunity to adjust inventory to run the most efficient lean material flow to be able to provide on-time delivery to its customers.

The solution also helps supplier relations.

"Our suppliers are an extension of us, so we are trying build synergies with our suppliers that they can see as soon as we use a product that we need it replenished," says Kim Stipes, materials manager of CVG's National Seating division. "You're not asking a supplier to go out and spend thousands of dollars. All they have to do is have an Internet connection and they can become part of you and see what you are using day in and day out, and see what they need to be sending back to you on a daily basis."

Indeed, before LMR Plastics, a Greeneville, Tenn.-based precision custom molder started using Ultriva, "We got two faxes a week that told us which parts needed to be shipped, and we made two large shipments every week," says Doris Schnabel, customer service. "Since then we make smaller more manageable shipments every day."

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