eKanban: The Path to Growing Leaner
Although the concepts of Lean Manufacturing and Kanban originated with Toyota in Japan, their principles have since been adapted by the automotive industry and other high-volume manufacturing industries. Driven by Japan's "kaizen" initiatives for continuous improvement, the goals of today's Lean Manufacturing and Kanban software are to:
- Eliminate waste, scrap and costly overstocks
- Reduce inventories and associated costs through Just-in-Time (JIT) deliveries of materials for production
- Reduce operating costs by driving out inefficiencies and non-value added processes related to material flow, inventory management, and production planning and scheduling
- Improve customer service and on-time delivery rates
- Reduce operating costs, while maximizing profit margins, cash flow and profitability
Just-in-Time inventory refers to a material flow management strategy in which materials and parts required for production are delivered as they are needed to meet production schedules, thus eliminating the need for safety inventories or inventory storage space. One of the largest expenses borne by manufacturers is inventory - including materials and supplies, work-in-process and finished goods inventories. Incoming materials need to be received, recorded and taken to a designated warehouse or storage area until they are needed. When the production run is scheduled, the materials need to be retrieved from storage and brought to the production area. Work-in-process and finished goods inventories must also be stored until they are needed. These storage and retrieval activities require time and labor, as well as space, and add no value to finished products shipped to customers. Just-in-Time inventory management resolves this challenge.
Yet, to ensure the ability to meet market demand, many manufacturers continue to rely on outdated strategies involving material safety stocks, material storage costs, and overproduction of finished goods - an undeniably costly and risky proposition. Lean Manufacturing, with eKanban as its foundation, makes a lot more business sense in terms of a company's operational efficiency, cash flow and financial bottom-line.
eKanban Optimally Balances Material Flow with Production
Take a hard look at your material handling and production scheduling processes and procedures. Can you affirm that your current practices support your overall value stream? Chances are, the answer is no.
The Lean Manufacturing approach to material resource planning (MRP) and production planning and scheduling seeks to strike an optimum balance between material flow and production requirements, based on actual customer demand. In lean manufacturing companies, there is no material flow until there is a demand (i.e., an order). That is why lean manufacturing is sometimes called "pull manufacturing" as opposed to the "push manufacturing" policies that were so prevalent in years past. Pull-based techniques ensure the flow of materials for production in alignment with demand. They result in a Demand-Driven Supply Chain, which means effectively managing production to meet market demand.
Pushing manufactured products out to the marketplace regardless of demand may have worked reasonably well in the past, but it will not suffice anymore. Not in a fiercely competitive global economy where competition can come from around the corner - and from across the globe. Not at today's speed of business, where product life cycles are numbered in months or weeks rather than years, and customer demands for short lead time and product customization are the rule rather than the exception. In today's world, manufacturers require a whole new strategy for managing material inventory, material flow and production - and eKanban is one of the key technology-based innovations driving the successful execution of Lean Manufacturing.
Imagine what would happen if a company such as yours could implement a fully automated eKanban solution. A flexible solution that plugs seamlessly into your spreadsheet, financial, ERP and CRM systems. An "Instant MRP" toolset that can improve your business processes - from inventory, through production, engineering, shipping and receiving. An analytical solution that provides comprehensive reporting capabilities, allowing you to continually measure and evaluate the progress of your Lean Manufacturing initiative and discover its real-time business value. What a difference that could make!
That technology is here today - and progressive manufacturers are already finding out how it can help them reduce material inventory and safety stock costs, gain greater control of production, respond with speed and agility to changes in demand, and avoid the cost and risk of overproduction.
GSInnovate eKanban Edition from Glovia Services allows you to transform your MRP and production strategies right from your desktop. Flexible, affordable and delivered conveniently over the Web, GSInnovate eKanban Edition requires no additional software, hardware or IT staff and can be implemented quickly and easily, without disrupting your business. To learn more, request a Web demo for a closer view. Or call 1-877-474-8896 to speak with one of our experts.
