There are many reasons for this staggering level of inefficiency, starting with the simple fact that running a supply chain with numerous moving parts—material, equipment, people, etc.—scattered about the globe is a complex undertaking. In recent years, manufacturers have made great strides in improving supply chain performance through the adoption of lean manufacturing and other cutting-edge management principles. Yet the ultimate goal of a low-cost supply chain that delivers the perfect order on time, every time remains elusive for many manufacturing enterprises.
Achieving that goal requires something that many early lean practitioners opposed: using IT to automate those well-crafted lean processes. Companies that follow lean principles like building to actual customer demand—rather than adhering to forecasts—and bringing material to the plant only when needed, as opposed to keeping large stockpiles on hand, operate with extreme efficiency when business conditions are stable. Customer demand is predictable, raw material prices are stable, and suppliers are always reliable, making it easy to map and execute streamlined production processes.
Global Business Realities
In reality, however, few manufacturers—especially those operating global supply chains—ever see such stable business conditions. Most contemporary manufacturers operate in a world in which change is the only constant. Customer demand changes weekly, commodity prices fluctuate daily and an unforeseen global financial crisis forces previously dependable suppliers out of business with little or no notice.
In this environment, simply running a lean operation is not sufficient. In the current business climate, manufacturers need to take lean principles a step further. They must build a level of flexibility into their lean processes, providing the ability to respond quickly-and appropriately-to constantly changing business conditions without ratcheting up operating costs.
That flexibility comes through deployment of IT systems that not only quicken the pace at which business processes are executed, but also can analyse if those processes are working well enough to support the company’s current business goals. Ultimately, these systems should give a manufacturer the necessary information to revise business processes before they start to impair the company’s overall performance.
One area in which IT systems can significantly enhance a manufacturer’s flexibility is the parts replenishment process. Automating parts replenishment is especially effective in industries such as automotive, aerospace and industrial manufacturing- where large numbers of parts are routinely moved to production lines in just-in-time fashion.
In these plants, forklift drivers typically move parts from storage areas to the production line. The challenge is making sure the right parts—in the right quantities-are always moving to the right locations at the appropriate times. With most companies in these industries now operating global supply chains, they also face the added challenge of keeping suppliers informed of the proper times for delivering parts to the plants.
In companies that employ lean principles, a kanban process generally is used to manage the flow of material both into and around the plant. In a kanban-based Material Flow operation, production workers place cards—or some other recognisable item, such as an empty parts bin—in certain locations to let the forklift drivers know when to deliver more material.
Fostering continuous improvement
Most companies that employ this method instruct production workers to signal for a new delivery when the current batch of material they are using gets below a certain level. The idea is to keep the production line moving continuously, which is one of the key tenets of lean manufacturing.
Invariably, however, there are hiccups when a manual kanban process is unleashed in a real production environment. “Any type of manual replenishment process is inherently inefficient,” notes John Fulton, product manager - Material Flow for Zebra Enterprise Solutions, a supplier of technology for tracking and managing inventory and other industrial assets. “In the worst cases, there is no systematic way for assembly workers to notify forklift drivers of when to bring more parts. Often, drivers are sitting around waiting for someone to call or wave them over.”
In addition to being inherently inefficient, a manual kanban process seriously inhibits a company’s ability to apply continuous improvement-a major lean tenet-to its parts replenishment operation.
“Kanban is a live, real-time solution that tells you when parts are short,” Mr Fulton says, “but it doesn’t give you a way of analysing your process. There is no data being collected to tell if a particular line is consistently running out of the same part. If you have those types of issues, you have no way of resolving them and improving the process.”
Most manufacturers rely on ERP systems to manage the bulk of their business processes—including the flow of material -but few manufacturers get full value out of those systems. Recent research from the industry analyst firm Aberdeen Group found that, on average, companies use only 28% of the functionality available in their ERP systems. Many manufacturers are hamstrung when it comes to getting full value from an ERP system because they are working with older systems that lack the ability to send data across functional areas within an enterprise or out into the extended supply chain.
Zebra Enterprise Solutions has developed an application that works in concert with ERP systems to support—and enhance—lean parts replenishment processes. Zebra’s Material Flow Wireless Parts Replenishment solution integrates seamlessly with a manufacturer’s existing ERP system. It uses information stored in the ERP system’s master data repository—such as part numbers, daily usages and inventory locations—to determine the optimal times and routes for moving material from internal storage areas and/or external suppliers to the assembly line.
This around-the-clock visibility into the company’s global supply chain allows for altering parts replenishment routes and schedules, on the fly, to keep up with fluctuating customer demand.
Zebra’s Material Flow Wireless Parts Replenishment solution is a fully integrated IT platform consisting of hardware and software for managing the movement of material, as well as the middleware for connecting with and extracting pertinent data from an ERP system.
The solution uses RFID technology to handle material request signals.
When the system is installed a series of devices known as WhereCall buttons are placed at each assembly area. When an assembly worker presses a WhereCall button, it transmits a signal to an antenna located in the ceiling of the plant. The antenna, in turn, relays the message to the software application.
The system message—which includes the location of the worker sending the parts request, the parts they need, where the parts are stored, and in what priority they should be delivered—is sent to a specified list of material handlers assigned to those parts and locations. The Zebra Material Flow Replenishment software, upon receiving the RFID call, displays the prioritised delivery instructions on industrial-hardened PCs that companies typically mount on the forklifts used to move material around plants.
These hardened PCs are equipped with touch screens, making them easy for material handling workers to access as they move around the plant. When forklift operators log into the Zebra Material Flow Replenishment application, they are presented with a list of part requests that are colour-coded so the drivers know which ones they should respond to first. These instructions also can be sent to handheld Microsoft Windows Mobile wireless devices.
Setting the right priorities
“Not all parts are on the same time schedule,” Mr Fulton says in explaining the reason for colour-coding the requests. “If you have a small part that typically comes 5,000 to a pack, and a larger part that comes 10 to a pack, the second part is going to need replenishing more often. So, when a request for that second part is sent to the system, it will automatically move up the priority list more quickly.”
Zebra employs consultants who work with its customers before the system is installed to determine which parts should be given priority over others. This pre-implementation consultation also can include an examination of the best routes for moving specific parts.
Measure, analyse and adjust
“We can model a typical route through the facility—taking parts from a storage area, putting them on a cart, and moving them to a work cell or assembly line in a particular sequence,” says David Phillips, director of Sales Engineering, Zebra Enterprise Solutions.
“We can create models that cover a single facility, multiple facilities that are part of a single enterprise, as well as suppliers’ facilities,” he adds.
If supplier facilities are included, Zebra advises adopting the Supplier Portal that is an optional component of the Material Flow solution so kanban-style replenishment signals can be sent to suppliers on a regular basis.
Once a model is adopted—complete with routes, kanban sizes, and priority levels for all parts—the Material Flow Replenishment solution uses those rules for sorting parts requests until the company decides to change them.
Decisions to change the rules come through the company’s continuous improvement program, which the solution also supports. “Continuous improvement requires that you first measure the performance of a process, then analyse, adjust, and measure again,” Mr Phillips says. “The Material Flow Replenishment solution is designed to do all of that. Individual facilities, business units, or entire enterprises can look at data holistically and determine if they are deploying the proper amount of labour, equipment and other resources to support the business.”
A leading global car manufacturer credits the Zebra Material Flow Wireless Parts Replenishment solution with taking the lean manufacturing program at one of its North American plants to a new level.
“After realising more than 12% efficiency gains from implementing the Material Flow Replenishment solution in one part of our factory, we expanded its use so that we now manage 750 parts across a span of more than 1.5 million square feet,” says the automaker’s material flow project manager. “With access to real-time data and analytics-rich reports, we have everything at our fingertips to make intelligent decisions and change business processes on the fly.”
That is exactly what all manufacturers need to stay competitive in this increasingly volatile business environment.
This whitepaper is done by Zebra Enterprise Solutions. |
For nearly two decades, some of the world’s best minds have been devoted to the practice of supply chain management. Still, a large percentage of manufacturing companies struggle to optimise supply chain operations. In fact, IDC Manufacturing Insights, a leading industry analyst firm, recently concluded that there is currently US$900 billion of waste in global manufacturing supply chains.
