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Purchasing Kanban: Another Example of Agility through Tools

Interview of Jeff Schneider, Senior buyer, RB Royal Industries, Inc.

1350 South Hickory St.
Fond du Lac, WI 54936
920-921-1550
www.rbroyal.com

RB Royal takes care in designing and producing fluid transfer components and assemblies for their customers on worldwide basis. Their components have a critical impact on the value of their customer’s products. Not only do they deliver on-time and provide value, they take responsibility to provide products that meet standards of performance and reliability.

For most of their 70+ years, they have been providing service to OEM customers in the areas of engineering, prototyping, short-run to high-volume production of machined parts and assemblies, testing and logistics.

Mixing Tools to Optimize

A number of years ago, RB Royal added Kanban to their set of tools used in optimizing their purchasing and inventory efforts. They now use four separate methods for controlling their inventory and purchases including VMI, Kanban, MRP and reorder point stocking. “We use VMI (vendor managed inventory) for those class C items such as nuts, bolts and the like. The vendors view the stock and replenish as necessary for these low dollar items”, said Jeff. For high dollar, fast moving items, RB Royal uses Kanban. “Kanban works excellent for parts that are highly repetitive with stable demand. The Kanban card keeps a consistent order quantity, which our vendors can depend on. With that stability, our vendors have been able to cut our lead times substantially. The administrative time is also cut substantially, as the Kanban number is entered in the stock room and automatically forwards to the vendor. With a prearranged blanket order, purchasing has little to do in this process” indicated Jeff.

“For other items with more erratic demand, we use the MRP system. This brings the material in as close to the production date as possible, and keeps our inventories low. For customer replacement parts, we use the reorder point system. This helps to control our external demands and to stops the pilfering of parts from our production needs”, mentioned Jeff.

How Does Purchasing Kanban Work for RB Royal?

“It is really quite simple. When someone empties a bin in the warehouse, they take the Kanban card and enter it to a screen. We only have to enter two digits, and the system knows the part number, quantity, and vendor. The Kanban card is then sent to receiving awaiting the shipment. The system also creates a release to the blanket, which automatically forwards to the vendor by email or fax. The vendor returns an acknowledgement, which is matched to the PO”, said Jeff.
Jeff continued, “When the part is received, the Kanban card is matched to the shipping document, and the two digit Kanban number is entered to the system. The inventory and purchase order are automatically updated, and the receiver is updated as to whether the part needs to go to inspection”.

What were the Benefits?

Overall, we have been able to raise our inventory turns from 6 to 9.5. For the Kanban items alone, we have had parts with a turn of 10 that have improved to 35 turns. As additional benefit, our stock outs have dropped substantially. Our vendors have also grown to like the system. At first, they didn’t like my requirements for short turnaround, but they have realized the benefits of uniform orders. This allows them to make the kind of changes in their environment that can speed deliveries and lower costs”, Jeff concluded.

Summary

RB Royal is an excellent example of the agility that WorkWise products offer their customers. With a broad array of tools, and the ability to use them simultaneously in the same environment, WorkWise allows you to squeeze maximum profits from your efforts. Our promise to you is the right tool for the right circumstance. Learn our difference today.

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