Boston Centerless - Precision Matters Magazine Boston Centerless Precision Matters Fall 2019 | Page 5

CASE STUDY: VMI KANBAN PROGRAM WITH SPECIAL DELIVERY REQUIREMENTS Problem: A fluid control manufacturer in the Midwest was having difficulty receiving and unloading large shipments of bar material. The oversized bars were very heavy, and the customer did not have an overhead crane at its facility, requiring deliveries to be made with a flatbed truck. They were also experiencing a large spike in material usage, and as a result, they were having difficulty procuring material fast enough to keep up with their customer’s demand. The usage got to a point where they could no longer accurately forecast when they would need Boston Centerless to deliver the material. They could only tell us they would need more—at a moment’s notice. Solutions: Boston Centerless arranged a Kanban program to hold finished goods inventory in our Minneapolis distribution center (DC). We then contracted with a local flatbed company that would work on an on-call basis to make same-day deliveries from our DC to the customer. To solve the issue with the spike in material demand, we installed a short-term solution to get them back on track and long- term solutions to keep material flowing optimally for the months and years ahead. “A VMI program will not only reduce cost but it will also increase speed to market by eliminating additional time needed to move the material from vendor to vendor.” Short Term: • We contacted our suppliers and procured as much material as possible. • After grinding the material, we held it in our finished goods inventory in Woburn, Massachusetts. • We contracted with an LTL carrier that would pick up in Woburn and deliver the product within miles of the customer where it would be transferred to a flatbed delivery truck for “final mile” delivery to our customer. The LTL carrier also furnished the flatbed and final mile service, allowing for faster delivery by eliminating the need for a second carrier. Long Term: • Boston Centerless pre-produces a quantity equal to multiple months of their annual usage for that part. • We hold the multiple releases in our Minneapolis DC, guaranteeing 24-hour delivery from the request for delivery. • To manage the future flow of product, our Field Sales Manager meets with our customer’s planners to review raw material and finished good inventory levels versus current and future demand for the product. This allows us to make adjustments where required and ensure that supply and demand are in sync, preventing stock outs and excess inventory situations. 5 Benefits to the Customer: • Transportation costs were reduced by 75 percent. • Procurement of larger volume of material generated cost savings. • Finished product is available locally with same-day delivery via a flatbed truck. • Boston Centerless manages logistics and ensures that receiving material deliveries would not be an issue at their facility, saving the customer time and headaches in managing the process. VMI programs can be arranged for round bar, precision flats, precision shapes, precision wire, precision tube, and cannulated bar. To better serve our customers, Boston Centerless has distribution centers strategically located across the country in Woburn, Massachusetts; Cleveland, Ohio; and Minneapolis, Minnesota. This enables rapid shipment of material to customer facilities and reduces lead times and freight costs. Let us put our experience with designing inventory management programs to work for you. We look forward to helping you with your challenge.