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Recent estimates suggest that more than a third of all metalworking and fabricating manufacturers engage in some type of lean-manufacturing initiative. There are many variables that drive the goal of waste elimination, none as keen as the need to be competitive in a global economy. As manufacturers implement these lean programs, they are bringing a key element of lean—kanban—into the fray in a seamless way: online.

Outokumpu Copper Franklin (OCF), a producer of copper and copper alloy sheet, strip and tubular products, has been on the lean journey for two years. Its internal efforts to reduce inventory and work toward production-smoothing were being hampered by a disconnection between the customers" needs and the company's production efforts. The firm was on a seemingly endless treadmill of reacting to customer-requirement flip-flops and other problems. Lead times grew to as much as six weeks. Continual last-minute modifications were made to order forecasts. Customers found it difficult keeping track of what they ordered and what they consumed. Too much capacity went to building parts that the customer turned out not to need until later. Customer-service reps spent a day or more a week dealing with last-minute changes, including costly (and stressful) expedited orders and Friday-afternoon emergencies that required "turning the plan upside down" to produce a part needed Monday. Strings of e-mails kept reading, "We forecast this … but we need to rush this!"

All this led the company to a "We need to build just in case" mentality. The company's worst fear: being caught short when customers changed their minds. Ultimately, this caused a costly cycle of overbuilding and inventory pileup.

Real-Time Production
Enter a solution called "e-kanban," designed to link a company with its customers, and their production efforts, in real-time. With this program from Datacraft Solutions, Durham, N.C., OCF knows what they'll need and when, so "we are now only producing what our customers are buying now," ays Scott Stringer, Outokumpu operations manager. "There is no more â??we need to build this just in case.""

Before, computer systems seemed to be more a part of the problem than a part of the solution. On the customer side, a large ERP system at one facility was not able to calculate requirements correctly.  On the supplier side, a cumbersome tracking system that had to be updated with scheduling, shipping and shop-floor information tied down a half-dozen people trying to keep up with the constant churn.

With e-kanban, all production is now initiated based on the immediate needs of customers. Inventory turns for e-kanban parts are now at 62 turns per year. Time spent by customer service communicating on expedited parts issues has practically been eliminated. They estimated that customer-service staff was spending 40 percent of their time on just expediting part orders, as well as the chaos that this created on the shop floor. Sales have increased because the company no longer uses capacity to build parts without an order to buy now. One-hundred percent of production capacity is used to build parts that are already sold as soon as they hit the shipping dock.

e-kanban: Business Process Efficiencies Realized
Outokumpu is no longer running each order through the scheduling department, cutting shop orders and batching them. Customer needs with e-kanban are now displayed real-time at a computer terminal in the cell that produces them. The cell personnel monitor the open kanbans and produce the parts in those quantities. Everyone including the customer can see the status of any kanban at any time, viewable by any user with a computer, a Web browser, Internet connection and the right password to access the platform's secure server.

The emergence of China in the world market has brought about new demands for the supply of raw materials. Prices of raw materials and WIP (work in progress) are high, and globalization has increased the complexity of supply-chain management. In this environment, "you must know what your customer wants, then be agile enough to produce it on demand," Stringer says.

Kanban: Only Part of "Lean"