Case Study: Kanban Improves Inventory Management
Most manufacturers in today’s market are struggling with shortages and supply chain issues. This has caused many problems with inventory management. One of the most common shortages are the materials needed to make their products i.e. convert raw goods into finished product that drives company revenue. In response, we’ve helped numerous companies implement Kanban to manage inventory effectively.
Since materials are the lifeblood of any manufacturer, business is not only impacted by the lack of a consistent inventory but additional cost may be needed to get materials rush ordered or may even cost the company sales because they do not have the materials necessary to handle the job.
Our client was struggling getting materials known as consumables that they needed to build the machines they sell to other companies. Many times, consumables are utilized to change the form, fit, and function of their product. With the shortage being so prevalent, the company started to lose the ability to manage their consumables effectively and consume them at the appropriate rate.
The client hired Prosit for help with managing these material shortages. We started by identifying and eliminating waste which led to the establishment of a Kanban process to ensure materials were on hand when needed. It turned out that managing the consumable inventory was occupying 15-20% of their capacity. We worked in close coordination with the parts manager to implement the Kanban process so it would work effectively and be easy to maintain daily.
A basic two bin system was created and most of the parts were able to fit in a small cubby on a rack. With over 200 SKU’s, the Kanban system was able to run itself with very little intervention.
The Kanban system resulted in the ability to manage the inventory of consumable parts effectively. This relieved the parts manager of having to constantly micro-manage the consumable inventory. With the Kanban system freeing up the parts manager’s time, the company can now focus on more important inventory needs for the rest of the facility.
Please contact us for any of your lean enterprise or lean consulting needs.