DIY: Converting the C-parts supply to Kanban

The material supply of your production is the heart of your internal supply chains. If something doesn’t work here, it has a fundamental impact on your output. The supply of C-parts in particular is an irritating topic in many companies. Should the materials be picked to order? Does it make sense for you to commission an external supplier with C-parts management? Or is an internal kanban cycle the solution for you? These questions are often put on the back burner because they are not considered important. As the supply of C-Parts in purchasing, logistics and production often generates high costs, you should evaluate the introduction of a kanban system. With the following 5 simple steps, you can set up an optimal supply process:

1. Careful selection of Kanban items
2. Subdivide the Kanban items into internal and external Kanban
3. Establishing the Kanban processes
4. Definition of a responsible person and regular master data update
5. Optimization of the kanban circuit

1. careful selection of Kanban items

Selecting the right materials is the most important step for the introduction of C-Parts Kanban in your company. First of all, carry out an ABC-XYZ analysis.

Data analysis

You will mainly find Kanban items in the XC category, as Kanban items are characterized by the following properties in particular:

• High consumption
• Consistent consumption
• High access figures
• low value
• Can be stored close to the workplace (low weight, small dimensions)

After analyzing the data, you should define limit values for each of the above categories. On the one hand, you should ensure that you select a suitable observation period (e.g. averaged monthly consumption/averaged over one year), and on the other hand, you should carry out your data analysis specifically for each reference point (workplace, production area, plant, etc.). Classic Kanb components are, for example, screws, nuts or O-rings, as these fulfill the limit values. A housing of high value that is customized, on the other hand, is not suitable as a kanban item.

Definition of Kanban article

You then coordinate the list of materials resulting from the data analysis with the respective supply center in order to also make use of the employees’ experience. They can tell you exactly which parts on your list do not make sense to establish a Kanban supply and which parts may have fallen through the cracks during the data analysis but are perfectly suitable in practice. For example, it makes no sense to have standard screws in certain sizes on the Kanban shelf and to pick one size according to order, as this only leads to confusion for the employees concerned.

Once the kanban items have been identified, the number of kanban containers and the quantity per container are determined for each material number. Use the consumption and packaging units as a guide here. It is best to start with a larger container quantity and slowly approach the optimum. For example, start with the quantity of a month’s consumption as a container quantity and gradually reduce this to a week’s consumption.

Now you have all the important information about your Kanban parts range – the most important step in converting your material supply.

New introduction of Kanban

If you are not yet using Kanban in your company, we recommend that you first establish an internal Kanban cycle and then gradually check where outsourcing makes sense. In this way, you can slowly establish the processes and at the same time gather support within your company before switching to an external partner. To check where outsourcing makes sense, you should prepare a detailed business case in which you compare personnel and storage/logistics costs with the costs of the service provider. Of course, your product range also plays a major role here. For example, if you have a lot of in-house manufactured parts in your Kanban, outsourcing may not make as much sense.

Keeping an eye on the overall optimum

When considering internal or external Kanban, never lose sight of the overall optimum. For some departments, as mentioned above, internal Kanban makes sense as a partial optimum – for other departments it is the other way around. If you decide to use an external Kanban at some point, then concentrate on one provider if possible. With most providers, you can also have parts that they do not offer handled. You can use Kanban databases to help you find a suitable system provider. These list the items that each provider has on offer. You can then compare these with your list to find the closest match. When selecting a supplier, you should also take into account the fact that they will take over an important process for you with the material supply. You should therefore look for a reliable partner.

3. establishing the Kanban processes

Defining the range of parts and assigning them to internal and external Kanban is not enough. Now you need to design and, above all, implement the appropriate processes. You should consider your processes for both logistics and the procurement of C-parts. For each process step, it must be clearly defined who has to do what and when. It is important to involve the people concerned right from the start in order to create understanding for the changes. With external Kanban, process planning takes place together with your partner.

We have shown you all the necessary process steps for the logistics area in the graphic below. In the article Process management: Our experience with tools, standards and training, we show you how you can best get started with process management – perhaps even directly with your Kanban processes!

Container circuit and hardware

In addition to defining the processes, you also need to take care of the necessary hardware. On the one hand, shelves and containers need to be purchased, which also need to be labeled. The kanban card plays a particularly important role here, as this is the trigger for replenishment. You should therefore make sure that the kanban card is designed clearly and comprehensibly. You can also use solutions from external partners such as Manufactus for this purpose. At this point, you should also check how you can map the kanban information in your ERP system and how interfaces can be designed here. You should also take advantage of the opportunity to change adjacent processes with the help of a kanban introduction and establish a container cycle based on your kanban containers, for example. You can find information on introducing a container cycle in the article Central goods receipt – saving costs made easy!

At this point, let’s summarize once again how far we have come. We have defined Kanban materials, divided them into internal and external Kanban, established processes and procured the necessary hardware. We have everything we need for the start of our C-Parts Kanban supply and can therefore get started!

4. definition of a responsible person and regular master data update

The points above relate to the one-off introduction of Kanban for your C-parts supply. The important thing now is to keep at it! For long-term success, you need a person responsible for Kanban and a regular update of your data. The Kanban manager should be at the interface between production and logistics and have an understanding of both areas. He or she is responsible for maintaining the kanban master data, such as the container quantity or number of containers in the kanban cycle. Depending on the size of your kanban cycle, this activity can be a full-time or part-time job.

Regular checks and updates

At regular intervals – we recommend once a quarter – the Kanban manager carries out step 1 of this article (the update interval may vary depending on the industry and company). In other words, they create a new list of Kanban materials. You can also largely automate this update with software support. Due to changes in the product portfolio, there will always be changes in the kanban range as well as in the container quantities and the number of containers. These changes are then coordinated with the respective supply point and the master data is adjusted accordingly. It is important here that you update the respective kanban types or container labels and establish a discontinuation control for the materials that are no longer to be provided via kanban. The person responsible for Kanban is also the contact person if changes occur between two data updates.

If your company’s product portfolio is constantly changing, updates are of fundamental importance, as you have the wrong materials in Kanban management and are picking Kanban materials for specific orders at the same time. This leads to high costs and your material supply process is hardly any better than before the introduction of Kanban. Regular updates are therefore your key to long-term success!

5. optimize your kanban circuit

You have now completed the most important point – converting your material supply. In the last part of our do-it-yourself guide, we would like to give you a few suggestions on how you can optimize your kanban cycle once it is up and running. As already mentioned in step 2, you should think about which parts you want to manage internally and which you want to have managed externally. This review should be a regular process, as changes to your Kanban materials will also change the framework conditions for deciding whether to use internal or external Kanban.

When it comes to hardware, you can rely on intelligent bin and shelving solutions for optimization. Using RFID technology, for example, these enable the automatic detection of empty bins when they are placed on a defined area. You can also combine this with automated ordering, both for internal and external Kanban. Furthermore, you can optimize the selection of materials, the determination of container quantities and the number of containers in the system as well as scheduling with intelligent software systems.

Summary

Check the production supply with C-parts. Kanban supply is a good option for many companies. With our 5 steps in this article, we show you how you can easily introduce Kanban in your company yourself. We have already supported some of our customers with this methodology and have been able to leverage undreamt-of potential. When implementing Kanban, it is important to do so in small steps and to allow for sufficient personnel capacity during the ramp-up so that the material supply is always available.