A company that produces coffee-brewing equipment for the North American market has expanded its use of lean manufacturing to drive costs out of its supply chain and manufacturing operations, while moving into new markets in Europe and Japan.
VKI Technologies has rolled out QAD’s MFG/PRO eB2 to eliminate parallel systems and ensure consistency across its operations, from the finance department to the factory floor. VKI, based in Montreal, has been a QAD customer for the past 15 years.
“We tried to apply some of those lean manufacturing concepts,” said Robert Primeau, director of business strategies and customer support with VKI Technologies. “Having that information readily available can provide the basic analysis to see customer profiles and customer sales.”
While lean manufacturing is not a new term, over the past few years it’s expanded beyond the automotive industry into other sectors, such as aerospace, consumer goods and industrial equipment. Lean manufacturing processes have revolutionized the way that many enterprises deliver products to their customers and manage their supplier relationships, according to a recent study by the Aberdeen Group. However, the study found that while C-level executives are enthusiastic about the benefits that can be derived by “leaning out” operations, there is a large performance gap between those companies that are simply using lean techniques on the shop floor versus those that have built a culture based on lean thinking.
“The two main things are, how do we drive cost out of the operation and how do we increase revenue,” said Dave Parrish, senior vertical marketing manager for electronics and industrial with QAD Inc. “It sounds like mom and apple pie but until you really start focusing on those things and start quantifying them, to drive down supply chain costs and subsequently increase revenues to the business, it’s not that easy to do without technology.”
Access to more timely information has allowed VKI to build some 30 key performance indicators, including financial, technical and customer support information. “We do not have to wait anymore for end-of-the-month reports because all these KPIs are in real time,” said Primeau. “I can go into our dashboard at any time during the day and I have live information on those KPIs, be it on-time delivery, sales for the day or various statistics on inventory.” Having that information allows executives to make more timely decisions, he said, and it will eventually put them in a better position to support customers and expand markets, particularly in Europe and Japan.
“What the lean applications really do is give them the ability to drive waste out of the system,” said Parrish. “Waste can be anything that doesn’t add value to the end customer.” It also allows them to react to the marketplace and to demand patterns in a more flexible way, he added. “Whether demand goes down or demand spikes, you have the agility within your organization to react to that, so you’re not sitting on mounds of inventory or you’re not over capacity.”
Previously, VKI had a number of parallel systems and customized applications that weren’t available across the organization. “With eB2, some of those applications were part of the standard package, so we were able to reduce some of those customized applications and make better use of one centralized system,” said Primeau. “By eliminating those parallel systems or spreadsheets or applications, everybody has the same information.”
The company is considering QAD’s customer self-service module for customer support, warranty support and after-sales support via the Internet. It’s also evaluating QAD Supply Visualization to automate its Kanban system and specific events, such as signaling stock minimums and providing up-to-date Kanban status to suppliers. This would help VKI meet on-time delivery targets and production planning needs, according to Primeau.
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