• Why is kanban better than min/max replenishment?
    The Kanban system leads to lower inventory levels and more accurate inventory data and therefore fewer stock-outs. The min/max approach typically includes large and infrequent orders. These large orders result in significantly higher than needed inventory levels for several days or weeks during each replenishment cycle. In contrast, Kanban is based on more frequent, smaller orders and therefore lower inventory levels. Also, because Kanban cards or bar coded labels are tracked where the material is consumed, inventory data can be tracked very reliably. In contrast, most min/max replenishment is often dependent on calculated inventory levels that come from historical ERP functions. These ERP calculations are highly dependent on accurate bills of material and detailed tracking of scrap and defective material. Missing or inaccurate data in any of these areas can immediately lead to stock-outs.
  • Isn't it true that kanban increases inventory levels?
    No - typically, Ultriva customers experience 35% -40% in inventory reductions. Kanban ensures that the right inventory is available at the right location at the right time. Although moving to Kanban requires an increase in inventory levels for some parts to avoid stock-outs, this is significantly offset by decreases in inventory levels on other parts.
  • Will Kanban really work in my environment? (a low volume, low mix environment or long lead time complex environment?)
    Yes. Ultriva has customers in every kind of business environment, including complex manufacturing, high volume, low volume and high mix and low mix. The fact is that Kanban applies regardless of the manufacturing environment. Almost any part that’s usage is repetitive and moderately stable is an automatic fit for Kanban. Those parts with infrequent or highly variable consumption require more review. If manufacturers can accurately forecast demand, then they should determine inventory levels that will support the production required to meet that demand. If demand cannot be accurately forecast, then manufacturers must decide whether they will only order material once a customer order is placed or instead they will carry safety stock. This approach, of course, increases lead times significantly. If demand cannot be accurately forecast and customers will not wait while material is ordered, then Kanban is the best method to determine how much inventory should be carried.
  • Do I need a dedicated project team for my implementation?
    Initially, it is recommended that you dedicate one or two people to the project to lead and drive the implementation. Once Kanban is rolled out, material managers, buyers and planners will be using Kanban on a daily basis and maintaining Kanban replenishment will be part of their normal job. In general, these users will spend far less time expediting orders and placing orders and will have far more time to focus on supplier performance and supplier sourcing.
  • If I move to more frequent, smaller orders, won't this drive up my shipping costs?
    No. Ultriva offers several options to handle shipping costs. If suppliers are already delivering frequently, then the suppliers will be delivering a much more consistent mix of parts and there should be no change in shipping costs. Where necessary, Ultriva can allow suppliers to receive orders in real-time, but queue up these orders until they reach a minimum order quantity or full truck load.
  • Shouldn't I try manual Kanban before moving to an electronic solution?
    No. Ultriva supports the manual execution of all of the key Kanban activities while eliminating the non-value added activities. Ultriva customers can still print out Kanban cards and reuse these cards over and over. Customers can also use a manual Heijunka board so that everyone can see the status of all material and production. At the same time, users can scan the Kanban cards and Ultriva will update the ERP system. Ultriva will also help users calculate when cards should be added or deleted from the system and when a card is lost Ultriva can let users know which card is missing and where it was last seen.
  • My company has developed a custom eKanban system isn't that good enough?
    Ultriva’s only business is to create, implement and support electronic kanban software. As a leading provider of this application and the supporting services, your organization benefits from lessons learned throughout the industry. To determine whether further improvements can be made to your inventory management, an analysis of your inventory with Ultriva’s Inventory Analyzer will give you a graphical summary of any potential savings.
  • I realize this may benefit the plant floor, but will senior executives have visibility to the results of the Ultriva Electronic Kanban initiative?
    Yes. Hard metrics, such as inventory reduction, fewer stock-outs, improved on-time delivery performance, and improved supplier performance can all be tracked after an Ultriva Electronic Kanban implementation. Inventory reductions of 35% - 40% are regularly achieved and customers have seen on-time delivery performance increase from about 75% to about 95%. These are the kinds of metrics that matter most to senior executives and to Wall Street.
  • Can Kanban be used outside of the plant floor?
    Yes, but this is where Electronic Kanban is mandatory. Once Kanban is extended to suppliers it is critical to have a system that shares inventory and order status information with both buyers and suppliers. With extended supplier lead times, proactive alerts are essential so that users can react in time to divert a stock-out situation.
  • What are the typical results from Ultriva's Lean Assessment Tool compared to an organizations current inventory management system?
    Typically, the results are dramatic. Live implementations have shown that the average savings per plant is $2.2 million.
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Rexnord Corporation
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