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05/10/2011 11:15 AM
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Hi,
Does anyone have some bibliography conserning Lean Procurement, its benefits, methos for implementation and case studies?
I'm studing the traditional MRP purchasing process versus the benefits of implementing a good lean procurement process.
Any help is very welcome.
Thanks
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05/10/2011 01:19 PM
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Ernesto, do a GOOGLE search for Lean Procurement on your computer . You will find all kinds of information on this subject.
Sam Tomas
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05/20/2011 10:59 AM
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I am doing a Black Belt project on material ordering and heading down a "Lean" road on the procurement side. Moving the plant's material ordering process to more of a Kanban system and, if we can pull it off, going all the way to "Supplier managed inventory". Not all the way there yet but there are lots of opportunities in this area.
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05/20/2011 11:14 AM
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Nancy,
Good for you! IMHO, the farther away inventory replenishment gets from MRP, the better.
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05/27/2011 11:35 AM
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Vendor Managed Inventory (VMI) is not a progression of improvement from kanban. Usually VMI increases cost over the long term.
VMI works when the supplier has unique or special tools and abilities to manage the inventory better than you. I have found this, rarely, but more common is that VMI is used to remove ourselves from the responsibility of management.
VMI can allow companies that track inventory turns to improve the metric while costs increase. If I force my supplier (most are not looking to manage these parts in my locations) to carry the inventory and manage it, those costs will be passed on in the pice price or contract, or the next. At the same time I quit worrying about whether I give accurate forecasts or information to the supplier because, hey, it's not my problem if he can't manage me.
If the supplier does do a better job than I did managing the inventory, will he share the savings with me? Of course not.
Summary: VMI has some application but should be applied very cautiously and carefully after understanding why and how the supplier can manage the material better than I. VMI usually increases costs, eliminates future cost savings, can increase supply chain risk but can allow me a one-time improvement to my inventory turns metric without doing any real hard work like actually reducing inventory.
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05/27/2011 11:35 AM
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Please explain your comment.
I am not a fan of MRP and work to eliminate it's use inside the factories but it does have some applications in the supply chain because the computer can handle very high workloads and complexity better than people. I would like to understand what you use to replace MRP for low volume/high quantity variance parts.
Kanban or other replenishment strategy can be used to replace MRP inside and outside the factory but kanban works best for medium or higher volumes of products that have recurring and regular consumption.
Products that have irregular orders, irregular quantities, low volume/high cost products, one time buys, etc. are typically managed and ordered with less cost and more accurately using MRP or similar software. The thousands of individual or spot-buy parts to support a large factory can generate hundreds or thousands of purchase orders and would require dozens of buyers and purchasing folks to try to manage. MRP can do that.
To have everything on kanban could require millions of dollars in inventory of spare parts I may only use once a year or even less. Of course I want kanban where it is an improvement, but products that have less than one-a-day consumption or an order variance buy-to-buy greater than 30% usually are not candidates.
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05/31/2011 12:25 PM
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Robert,
Enjoyed your comment as it is somewhat related to a post I made last week about MRP and Lean. It appears that someone else agrees that in the correct application and with the proper design MRP can be an effective tool.
I'm not aware that ERP requires schedules to be driven off forecasts and massive amounts of safety stock. These are left up to the user to decide.
My impression is that in many cases those in charge of leading the ERP implementation and design are not fully versed in Manufacturing Systems methods (i.e. Lean) and the full capabilites of their systems which leads to sub-optimal design and performance.
The ERP vendors seem to want to push all the fancy tools, bells and whistles and more is not always better.
Brian
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09/20/2011 03:08 PM
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My point is that if ERP can really benefit people than Kanban orother tools , it is better IF taken it as a trend, needs people to help ERP , it is not so helpful.
We have to do some basic data maintance and regulate the process in ERP, if there is little Various in it, It will stop and caused catastrophe.
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10/07/2011 01:06 PM
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Doesn't MRP stand for "Material Requirements Planning"? MRP certainly has some value as a "planning" tool. For example, if you are going to set up kanban for component items, how are you going to refresh their anticipated rates of usage? MRP can help make sure that all component supermarkets are tied to the same end item master schedule rates.
However, for execution, you should use pull systems (not just kanban). And of course you can use pull systems with both internal and external suppliers, including make-to-order demand as well as kanban requirements. The basic idea (and I emphasize basic) is to pull to the capacity of the supplier, not just to individual supermarkets, and to spread that capacity over the highest priority requirements from that supplier. This will stabilize the supplier's lead time and ensure that you get what you need when you need it. So, not everything will be on "kanban", but it will be on a pull system.
BTW, why do you need purchase orders? Here's how one company I know of does it. Raw materials are consigned and managed by the vendor. At the end of each month, the company explodes the bills of materials on everything they shipped that month (thanks, MRP), and writes each vendor a check for its content in their shipments. And, yes, they do have reconciliation procedures in place.
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