19-Nov-09 1:15 AM AWST

A Kanban-Driven Material "Supermarket" at Braun, Shanghai, Limited in China

Lean Production

When James Womack and Daniel Jones visited the Toyota production plants in 1982 they were struck by the firm's superior process management capability which they dubbed "lean production." They describe how this translated into Toyota's ability to manage "a series of actions conducted properly in the correct sequence at the right time to create value for customers" (Lean Solutions, Womack and Jones, 2005).

Today, as global enterprises become ever more aware of the strategic importance of managing the entire supply chain, lean thinking is being applied outside the production shop floor and into the full spectrum of supply chain activities.

This case study reviews an initiative at the Braun production plant located in Shanghai, China in which lean principles were applied to improving manufacturing inventory control through streamlined warehouse operations incorporating a kanban-driven materials supermarket.

Background

The Braun Shanghai Limited manufacturing plant is located on the outskirts of Shanghai and comprises a legacy factory dating
from the 1980s. "When I came to Shanghai in 2007, the warehouse at our factory was traditional in its design, with corresponding systems and practices," said Liam Cassidy, General Manager, at Braun Shanghai Limited. I wanted to implement a full program of Lean Manufacturing Practices from supplier to the dispatch of our final product. The transformation of our warehouse to allow for this was critical."

There were a number of practical inconveniences at the plant that presented serious challenges to achieving this goal. The long narrow shape of the factory and warehouse buildings gave rise to long travel distances from warehouse to production areas and produced congestion of traffic and materials production-warehouse interface. Additionally, there was no dock leveling equipment for the loading and offloading of vehicles servicing the plant.

Project Aims and Goals

The major aims and goals of the project were to develop a design solution layout for the warehouse providing:
- Easy and rapid access to all materials in the warehouse.
- Improved material flow and labor productivity in the warehouse.
- Improved service to production lines.
- Improved inventory management across the plant.

Project Challenges

The major challenge facing the plant was accommodating increasing quantities of transactions during routine work as throughput volumes continued to increase coupled with the re-education of the warehouse staff to adapt to the new ways of working.

On the facilities side, the major challenge was to greatly enhance the use of physical space and access to materials in the warehouse while at the same time maintaining very high level of health and safety compliance and material security.

Additionally, WMS system changes would need to be incorporated to support the new ways of working and the improvement in the control and accuracy of inventory.

Formulation and Implementation

The Approach

Because the project involved the overhaul of the current state operations rather than a simple modification, the structured approach used to tackle the challenge followed the DMEDI (for Define-Measure- Explore-Develop-Implement) improvement model.

The Solution

The main characteristics of the solution were as follows:
- Value Streams are grouped together in order to facilitate access to replenishment and picking.
- SKU item codes that are common to more than one Value Stream are located in a central passageway that is always traversed by pickers.
- SKU item codes with large box sizes are also located in the central passageway adjacent to the common items.
- Replenishment and picking take place in mutually exclusive dedicated aisles thus ensuring that fork lift traffic and pedestrian traffic are separated.
- 80 percent of picking now takes place within about 30 percent of the floor area that was previously used for picking.

The Data

Optimizing the size of stock location for materials and the access routes to the locations required a careful analysis of both historical data and future case scenarios. The main items of data required were;
- Stock movement transactions spanning a period of 12 months.
- Material Master Data for each and every SKU item code.
- Dimensional data by SKU with both supplier and issue pack dimensions and weights.
- Current storage equipment type, location and capacity and suitability for reconfiguration.
- CAD drawings of warehouse buildings, docks and yard.

The Analysis

A range of analyses was carried out and included a combined analysis of the Movements and Master databases. The daily and weekly movements per SKU were calculated both in terms of quantities and volume and a cross check done against the Planners' current schedules in order to validate figures.
In addition, an analysis was carried out to identify those SKUs deemed suitable for insertion into "supermarket" shelf modules

as distinct from those deemed to be "bulky" and requiring pallet pick locations. A range of criteria including dimensions, weights and throughput were used for this distinction.

Finally, an analysis was carried out to identify those SKUs that were unique to a particular Value Stream as distinct from those that were common to more than one Value Stream in order to inform the layout and flow for dedicated picking routes.

Getting it Done - Production Side

On the Production side the specific elements of work that had to be undertaken included determining the One-Time Picking Quantity and the related information required on the kanban pull card.

It was also required to determine ideal trolley size and format to transfer issue packs back and forth to the warehouse and to implement.

Getting it Done - Warehouse Side

On the warehouse side, it was necessary to quantify the projected warehouse workload and compare current state operations with future options.

Following on from this was the definition of the physical locations for material within the racking and shelving and setting up the beginning inventory with clear visibility of information on the rack.

On the systems software and hardware side it was required to clarify with the system vendor the specification and functionality of the scan solution for data capture and then install, test and commission the hardware and software.

A structured training programme for operatives on the new procedures was an integral and necessary component of the work.

Results and Benefits

The three major benefits obtained from the implementation of the kanban supermarket were as follows:
1. Increased work efficiency.
2. Reduced material issue lead time.
3. Reduced inventory on the shop floor.

Increased Work Efficiency

The overall reduction in goods issue/picking time was 28 percent and this was achieved through a combination of factors.

The defined delivery routes reduced the non-value added walking and consolidated the movement activities covering all materials movements.

Another crucial factor was that previously work order picking had taken place on all four storage levels in the warehouse using a turret truck/order picker. With the supermarket, almost all kanban picking could now take place from the ground.

Reduce Material Issue Lead Time

This was reduced from over four hours on average to less than one hour. In the previous arrangement, production was required to submit a picking slip to the warehouse one shift in advance of its requirements with resultant low flexibility.

In the revamped regime, the pickers simply select the material required through kanban as a function of line demand. This provides much greater flexibility and a speedy response to changeover requirements.

Reduced Inventory on the Shop Floor

Previously the process orders were for one to two shifts-worth of demand. This made it very difficult to follow the 5S guidelines for an organized workplace. During changeovers there was a risk of confusion and mixing of materials. This has now reduced to two to four hours of line output.

Lessons Learned

- High quality systems data is an essential foundation to conduct an accurate analysis. This is particularly true of the dimensional data on supplier and issue packs held in the Master data file.
- Dimensional data is often not well maintained in enterprise system databases for a variety of reasons. It is therefore imperative that dimensions are verified and the necessary corrections made before proceeding with analysis.
- One of the crucial challenges of the solution formulation was to strike the right balance between the travel time for pickers selecting materials in the supermarket and the frequency of replenishment into the supermarket. The larger the supermarket bin-locations the lower the frequency of replenishment but the longer the dedicated pick routes.
- The final solution allowed for an average of one week’s usage to be accommodated within the supermarket with all SKUs accessible by means of simple manual picking from the ground. The supermarket area now accounts for over 80 percent of all picking activity from ground level on just 30 percent of the previous footprint.

Patrick Daly is Managing Director of Alba Consulting Group, which provides consulting and training to best-in-class operators in manufacturing, distribution and logistics services across Europe, Asia and North America. He can be reached at pdaly@albalogistics.com.