Velocity

2013

NovAtel's Annual Journal of GNSS Technology Solutions and Innovation

Issue link: http://velocitymagazine.epubxp.com/i/164724

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Lean Manufacturing "pull" from a customer, they don't order component parts from their suppliers until they need them. In lean manufacturing, this technique is called kanban—a Japanese term for "sign" or "billboard" and refers to the logistical chain underlying production planning. Sharing the Lean The Lean manufacturing system extends into NovAtel's relationships with supply partners. This is especially evident in the relationship with electronic service providers such as Creation Technologies Inc. and Dynamic Source Manufacturing. Stan Krzyczkowski, general manager of Creation Technologies' Burnaby, B.C., manufacturing facility, says, "NovAtel has been a key customer to Creation Technologies for the last six years. Together we have been able to make many improvements which have enabled NovAtel to better service their customers and win new business. When customers and suppliers are aligned with Lean thinking, they can truly achieve breakthrough results." "We provide them monthly forecasts for about six months, but then we have an agreement with them that they are working to produce only against actual customer orders" says McAloney. "As we use product on the production floor today, say a particular circuit card assembly, this evening we will send them a pull request to replenish the material we used today. So, they get the information the same day the material is being consumed." NovAtel also has service-level agreements with vendors on how quickly these are replenished. At the circuit card level, for instance, that is on the order of about 10 days, McAloney says. With product-level builds happening in five days, McAloney estimates that the company only needs finishedgood buffers of perhaps two weeks to provide near–real-time delivery of products to customers. "You can only get away with this if you have oneday WIP," he adds. "So, if you're using the parts and then recognizing that you used them the same day, it's okay. If you're going multiple days and not rec- For more Solutions visit http:/ /www.novatel.com ognizing that you are using the parts, you're going to run into some serious trouble." The one-day WIP, used in conjunction with the kanban system, means that products are built to specific orders from the start, and customers get what they ordered faster. "In the old days, when we were doing a 'push' system, we could only react in, like, 14 days," said Ho. The firm would build up a lot of inventory, which would have to be sorted through and modified to meet orders. With a pull system, NovAtel only builds products when it has an order, and any changes are incorporated as products are built. The result, Ho says, is that delivery time is now down to two days after receiving an order. And sometimes even less. "It used to be that we were quite pleased that we had 90 percent on-time delivery to our promised dates…to customers," Ho says. "About two years ago, we decided that it really didn't matter what we are promising for delivery dates—we were setting our own target and meeting it. What really mattered was when customers wanted product." Now NovAtel tracks the customer request date or CRD—the date the customer wants to receive the ordered products. That has produced a 95 percent or better rate of on-time delivery in an environment where about 70 percent of the company's customers want next-day delivery. With more than 200 products and the ability to rapidly reconfigure production, NovAtel expe- By implementing "lean" principles, NovAtel was able to reduce the footprint of its manufacturing line. Image credit: NovAtel photo 2013 velocity 43

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