Electrical Components Manufacturer
Faced with inefficient handling production scheduling through its MRP, this international manufacturer of electrical components was faced with stock outs, excess inventory, shortages that affected customers’ lead times, and loss of machine time in multiple plants.
This Electrical Components Manufacturer (ECM), is a manufacturer of the world’s most complete line of custom fractional horsepower motors, blowers and gear motors for the automotive, HVAC and other industries. ECM employs over 5,000 individuals across 13 facilities
ECM’s operations were spread across multiple plant locations in the U.S. and in one plant in Mexico. Components manufactured in the U.S. plants were being consumed primarily by the assembly plant in Mexico and then shipped directly to their customers worldwide. Sometimes parts were delayed in customs and the plant in Mexico had no visibility as to when parts would arrive. ECM is a repetitive goods manufacturer and their MRP system was unable to handle the production scheduling efficiently. This led to the following problems:
- Excess inventory
- Planners spending most of their time on emergencies
- Problems with suppliers flooding parts based on MRP schedules and blanket Purchase Orders
- Shortages resulting in long customer lead times
Loss of machine time in both plants
- Facilities across geographic borders lacked visibility into each other’s operations and inventory status
First, Ultriva did a study of ECM’s inventory and was able to show where processes could be streamlined and excess inventory could be reduced. Then Ultriva implemented the Collaborative Supply Portal featuring Electronic Kanban or eKanban.
The successful implementation of Ultriva resulted in the following benefits for ECM:
- 35% savings on inventory. This included not only savings on inventory carrying cost, but also associated overhead in storage, tracking, obsolescence, etc.
- Elimination of lost machine time due to unavailability of inventory.
- Line side scheduling instead of forecast based ordering saved several thousands of manual ERP transactions per year resulting in substantial bottom line savings.
- Supplier communication and delivery performance improved dramatically and also gave ECM better control over supplier shipments.
- Better customer retention and sales based on improved delivery cycles.
- Real time visibility of Work in Progress (WIP).
- Plants gained the ability to control and manage the ‘Physical Flow of Goods’ between the facilities and with suppliers.