Multiply the number of (suppliers) X (number of parts they supply) X (number of times the part is ordered per month).
Each order is a fax. If a manufacturer has 5 suppliers each supplying 20 different part numbers and they send a kanban signal once per week, 400 signals per month are being sent or about 20 faxes per day.
Fax Kanban is not Efficient and not Lean
At ten minutes per fax, someone is spending 3.5 hours per day in administration time. That inefficiency results in less time to utilize more suppliers or improve the relationships with existing suppliers.
Furthermore, even if 99% of those faxes are trouble free procurement signals, four faxes per month are going to be problematic and dilute the entire rationale for a lean manufacturing operation. Suppliers claim they did not receive the fax kanban; suppliers cannot make the shipment date requested and expedited shipping fees are incurred, or worse, there will be a stockout which will negatively impact customer service levels.
According to Sam Bayer, President of Datacraft Solutions (www.datacraftsolutions.com), the leading e-kanban provider in North America, “Signum, our electronic kanban system gives manufacturers a heads up to which of those four faxes might be the problem and then frees you up to deal with them because our system has dealt with the other 396 kanban signals with zero effort.” Bayer also noted that process improvement with existing suppliers will further reduce lead times and inventory levels and bring more suppliers onto the system.
The “Success Paradox” of e-Kanban
Bayer refers to this e-kanban Lean manufacturing efficiency as the “success paradox”. According to Bayer, “The more it works the more you want to do it. The more you do it the less time you have to do it because of the administrative overhead required to manage it. It appears as if the natural cutoff point is 400 faxes per month. At 100 a month, secretaries manage it. 200-300 buyer planners deal with it, but hate it. Over 400 per month and something has to be done.”
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Sam Bayer
Datacraft Solutions
919- 667-9804
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