A Washer Saved is a Million Dollars Earned

You have embraced lean; you have implemented manufacturing cells, and established pull systems for smooth demand/high repeaters. But what about the excess “C” and Expense item inventory that seem to be building up in the cells or in the corners of your warehouse as the design of the equipment or production mix changes?

Your first inclination may be to sort it by material type and sell it for scrap just to get out from under foot. The thought of searching for other uses for the parts is overwhelming. It is very probable the excess parts are called a different part number in another manufacturing cell(s). Before you jump to conclusions see how one of our top accounts partnered with us to provide a big financial return by managing the small things.

Coping with “Not Required” Parts
Our customer produces a broad mix of low volume, very large, complicated, and expensive equipment that requires thousands of small electro-mechanical components. The shifting tide of production levels and model mix has forced them to learn how quickly and efficiently to teardown manufacturing cells and reconfigure them for the next repeat or new product. Predictably the wheels fly off the cart when it comes to identifying and moving the hundreds of “not required” expensed items out of the cell and the new items in. It’s here that our unique Point of Use inventory system made a million dollar difference for this customer.

Introducing iZap as a Solution
Through implementation of a Point of Use inventory system, using our “iZap” bar code program, we were able to address our customer’s challenge. Every one of the parts we supply to our customer at point of use has been crossed referenced to the manufacturer’s part number. It is not uncommon to find six unique customer part numbers calling for the same Parker #13493-8-8, which happens to be a ½ Inch Fitting. It is also not uncommon to find that the part is used in upwards of 40-50 manufacturing cell locations. Once the customer decides to reconfigure a manufacturing cell we immediately deactivate the part in the iZap system as well as all its brothers and sisters on the production floor. Therefore, the next time a reorder point is hit for any of the sister bins our system points the material handlers to the burn down location to retrieve the part for rapid replenishment. Once the inventory in the burn down location is depleted the system reactivates all the brother and sister bins for discrete reordering and replenishment.

Let Demand Drive Replenishment
Here is a helpful hint we learned with the customer along the way. Since demand for these parts in other production cells is hard to predict there is little to no value in re-distributing the excess parts to the remaining brother and sister bins. Better to just identify the burn down location and let the demand for the part in the active cells drive replenishment activities rather than compound potentially slow moving inventory with wasted motion.

Over a seven year period our customer has documented a cost avoidance (not buying parts that are already on hand) of over $1million. When it comes to optimizing your investment in floor stock inventory, we’ve demonstrated we can help.

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The iPower Distribution Group of New England is a leader in VMI programs. iPower delivers the widest breadth and deepest supply of Tier 1 commodities in the Northeast. Our supply chain provides $800m annually of industrial components, supplies, and packaging materials. To learn more visit us at http://www.ipowerne.com.