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  Manufacturing Insights   |   April, 2009
Electronic Kanban for Faster Turns, Reduced Inventory Improves Top Supplier in Commercial Trucking
by Thomas R. Cutler
 

Commercial Vehicle Group (CVG), one of the world’s top suppliers of cabs and cab-related parts for the commercial trucking industry, needed to automate its implementation of kanban, a demand driven method of inventory replenishment, because the company’s manual approach to the method was complex, time-consuming, and error-prone. CVG implemented Ultriva electronic kanban, a fully automated solution based on Microsoft server and development technologies. Within just a few months of deployment at two of its plants, CVG saw turns increased, inventory reduced, and associates at all levels, within CVG and suppliers, better collaborating and communicating toward company objectives of total quality production, lean manufacturing, and elimination of waste.

Founded in 1997, Commercial Vehicle Group (CVG) is a leading supplier of cabs and cab-related products for heavy-duty commercial trucks and specialized vehicles used in construction, mining, agricultural, and marine environments. CVG introduced the first air suspension seat for the trucking industry and today is the only supplier that can offer a complete cab interior from state-of-the-art technology structures and assemblies to vision-safety solutions, wiper systems, switches and controls, wire harnesses, mirrors, and a full array of trim systems.

Through such advances, CVG is now ranked No. 1 or 2 in every aspect of the commercial vehicle body market, a marker of success that stems at least partly from the company’s innovative efforts to dramatically streamline the supply chain. Early on, CVG pursued a “colocation” strategy unique in the heavy-truck industry: establishing production and light assembly plants near to major-customer sites so as to expedite just-in-time parts shipment.

CVG also has deployed extensive enterprise resource planning (ERP) systems for its purchasers, manufacturers, and suppliers, and has implemented Six Sigma programs for process improvement on a similar scale. Most recently, CVG has implemented kanban, a demand-driven method of inventory replenishment that evolved from a total quality production system pioneered at Toyota Motor Corporation. Some CVG executives were among the first graduates of training programs in the method, and today every CVG employee must complete forty hours of instruction in a similar program, instruction that is provided by a member of the shop floor staff. Immersing new employees in learning the kanban method and empowering them to take the lead in eliminating waste, a key element of kanban, is emblematic of the way CVG approaches its entire business, says Bryan Stiles, Vice President, Strategic Business Development. “We focus heavily on employee involvement, bringing everyone’s skills to bear on eliminating waste in the manufacturing and supply chain, and using those skills to make the business better,” Stiles says. He further explains to make the most of its employees’ kanban skills requires not just training but also tools. When CVG first implemented kanban in 2004, it was a manual tool, based on plastic or cardboard cards that resided with every part in the company’s inventory. A card would travel with its corresponding part from its arrival at a CVG warehouse to its delivery at a customer site.

The card-based approach provided employees an excellent introduction to kanban, but also had drawbacks. “Inventory counts, signals to suppliers for inventory replenishment, and entry of new-inventory information were initiated or implemented by hand, making it very time-consuming and complex to adjust inventory,” he points out. Further, card-based kanban was subject to error. “A card is easy to misfile, drop, or accidentally get put into someone’s pocket, and when that happens its associated part doesn’t get replenished,” Stiles says. “For all these reasons, we decided to take kanban to the next level by implementing an electronic approach to the method.”

“Whether for kanban or another initiative, we are committed to involving employees in continuous improvement,” notes Butch Elliott, Lean Manufacturing Manager, Commercial Vehicle Group.

After evaluating a handful of kanban software products, CVG executives selected Ultriva electronic kanban based on a number of criteria. Perhaps most significantly, the solution was browser-based. “To get the most benefit from kanban, we needed a closed-loop solution that would support a continuous-flow process, a solution that any of our suppliers could access easily,” says Rick Clevenger, Director of IT Systems, CVG Interior Systems Division. “Browser-based Ultriva answered that need perfectly.” Another advantage of the solution’s browser based foundation was its accessibility to the shop-floor employees of CVG who would be using it daily, according to Butch Elliott, CVG Lean Manufacturing Manager. “Whether for kanban or another initiative, we are committed to involving employees in continuous improvement, to elevating their skill levels, and to giving them the tools they need to help CVG maintain its competitive advantage,” Elliott says. “An easily accessible, easily usable automated kanban solution is just that kind of tool.”

CVG executives also liked that the Ultriva solution was based on Microsoft server and development technologies, largely Microsoft Windows Server System, Internet Information Services, Microsoft SQL Server, and Visual Studio. “This would enable us to integrate the solution seamlessly with existing back-end applications also based on the Microsoft platform,” Clevenger explains. “It also would enable us to maintain and update the solution cost-effectively thanks to the wide availability of expertise in Visual Studio 2005, Visual Studio .NET, and other Microsoft technologies.” In early 2006, CVG launched its deployment of Ultriva Electronic Kanban at two of its plants. Within a few months, hundreds of shop-floor employees internally and at some CVG suppliers were using the solution on a daily basis.

Benefits

According to Clevenger, as a turnkey solution, hosted by Ultriva, and with its browser-based user interface, proved relatively easy to implement and adopt. CVG buyers and some suppliers were using the product smoothly after just two days of training. Since initial deployment, for those users and others, the benefits of the solution have become clear: faster turns and reduced inventory thanks to a vastly more automated process and better visibility of inventory; a system that empowers employees at all levels; comprehensive tracking and analysis of supplier performance; and closer involvement of suppliers in the process.

Faster Turns, Reduced Inventory

As Kim Stipes, Materials Manager, explains, the first job for Ultriva Electronic Kanban was to automate the scanning of parts coming in and to provide comprehensive real-time visibility of inventory to everyone involved. “We’re scanning products on the dock that used to be keyed in manually, so we’re getting parts accepted faster and stocking them faster, too.” Stipes also speaks to the benefits of automation in reducing errors: “Using Ultriva means the process is far less prone to errors than the manual approach we used before.” Another aspect of automation is the solution’s seamless integration with the company’s existing ERP system, enabling the company to provide any authorized user with an accurate and comprehensive real-time view of parts and inventory. “Shop-floor employees can access a total view of inventory at all points in the supply chain, so we can run a very efficient and lean material flow and on-time delivery to customers,” Clevenger reports. “At one warehouse, within just a few months of implementing the solution we saw turns speed up by twenty eight percent, inventory down by forty-three percent, and a savings of more than 6,500 feet in floor space.”


Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc, (www.trcutlerinc.com). Cutler is the founder of the Manufacturing Media Consortium of three thousand five hundred journalists and editors writing about trends in manufacturing. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, Committee of Concerned Journalists, as well as author of more than 300 feature articles annually regarding the manufacturing sector. Cutler can be contacted at trcutler@trcutlerinc.com. See More Details.

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