Material Systems Management
Managing materials systems is an entire job in and of itself. If not designed or executed properly, it could cause unnecessary stock-outs, waste, and downtime. This means less value delivered to customers.
Materials systems guide workers on how to move materials to and from where they belong, how to store them, and when they are needed in the quantity that is needed. It keeps the production line running at a steady tempo.
However, despite their deep roots in the production process, materials systems are often overlooked as a potential opportunity for focused improvement.
In this article, we will go over what gaps are often overlooked in Materials Systems, and use Kanban as an example for how you can digitize the process. We will also cover the benefits of digitization, and walk through some of the use cases with the Tulip app.
Materials Systems Example: Kanban
Material systems cover many grounds: material planning, inventory levels, material replenishment, and logistics. To keep things simple, let’s focus on just one part of a materials system: Kanban.
Kanban is often used to manage the knowledge flow of when materials need to be replenished and in what quantity. It is a consumption-based model that allows you to set up your value stream for replenishment strategies but not be directly responsible for planning every action and when it should occur. It will allow you to configure your supply chain with when and how to respond to signals and therefore allow it to act autonomically.
Gaps in Materials Systems and Kanban
Materials systems like Kanban are not as scalable unless they are operated digitally. Physical boards and paper Kanban cards work great with replenishments, but they fall short of providing actionable real-time data. And those data points that come as a result of digitization are what can be fed back into Kanban loops to better strategize for replenishment and production planning.
So the question is, how do we keep the structure of working materials systems like Kanban but optimize the operational aspect? How do we keep the already good parts and improve the rest?
The Problem with Non-Digital Materials Systems
The system of record that represents the materials, their routes through a process, and their statuses are often disconnected from the execution of production. That system of record does not represent reality, and the people working on the shop floor cannot use that information to improve their processes.
We all have an idea of what our inventory levels, lead times, reject rates, cycle times, and even process routing requirements maybe, but our assumptions will never be accurate unless they are backed by robust data. This means that the system of record, which operates under the assumption that these data points are always accurate, are in fact making plans that don’t adjust to changes in demand or supplier performance.
There needs to be a way to connect the planning system to the real world so that there is less friction between reality and what is being planned. And the easiest solution is digitization.
Why Digitize with Tulip?
What Tulip can do here is making it as easy as possible to connect the different nodes involved in materials systems. And by doing so, planning systems can work with real-time data.
These are some of the benefits of digitizing Materials Systems:
- Actionable data
- Data Traceability
- Real-time data
- Bottleneck Location
- Lead Time Data and Data Accuracy
- Dynamic Kanban
Actionable Real-time Data
A simplistic way of implementing materials systems is indicating a shortage of materials in an ERP. The system will already claim to know that there is a shortage, and a material handler (or a water spider) will have to indicate that there is a shortage on a metrics board. However, with Tulip, you will be given the possibility of signaling at the exact location that a material shortage is detected. Instead of writing down the shortage on a card and putting it up on a physical board, the digitization of this information can create data points that are traceable and actionable.
Shortages will always happen, but the whole point of materials systems is to stop shortages from happening. And there is no better way of insulating shortages than digitizing materials systems so that actions can be taken immediately.
Submit New Material Request
Here is one way of how material handlers on the shop floor would submit requests for new materials using Tulip. This is an example application that you can easily download from us:
Material handlers are already taking the time to appropriately notify material shortages. If that action is already being taken, why not go digital and make the information; 1) instantly actionable, 2) and traceable.
This would be the app on the internal supplier side that would fulfill these requests immediately upon entry. This is actionable data.
If you want to send a signal for re-order every time a bin is emptied, then there needs to be a simple way to ensure that these rules can be followed with minimal effort. Tulip can be configured and adapted to exist in any scenario and can, therefore, be the perfect tool to empower and connect your planning systems to the real world.
Dynamic Shop Floor
Digitization does not modify who communicates with who or what information is communicated. But it changes how the information is communicated. Directly connecting these nodes through a digital medium creates opportunities for people on the shop floor to improve their processes based on accurate data.
Take for example, Kanban Loops. The digitization of these loops does not change the nature of who communicates with who or what information is exchanged. Tulip would simply digitize the signals you are already generating. Tulip does not change the overall structure of the existing planning system but strengthens the connections in the network.
So instead of manually managing kanban loops that contain information such as the number of cards and expected lead time, a digital Kanban configuration above would allow for a more dynamic use of kanban cards. Based on the shop floor’s demand and capacity, these kanban settings can easily be adjusted to meet the current demands and needs. And with Tulip, kanban loops can also be sorted based on criteria, and they can be deactivated and activated when needed.
The above app configuration is just an example of what the digital entry for a kanban loop would look like with Tulip. This page can be set up to fit any existing materials systems used on the shop floor by using our drag and drop function.
Lead Time Data and Data Accuracy
Digital records benefit not only data traceability and real-time data but also the accuracy of lead time information. By logging data at various touch points throughout the production process such as when a material is moved to assembly, true lead time and/or cycle time can be measured.
Making the existing transactions digital and pipelining the information directly to execution allows planning systems to work with real information. Not just an assumption of the lead time.
The only way you would ever know that you have a lead time variation from what you think your lead time is, is if you are actually tracking your lead time and measuring it. Lead time matters. Making this electronic enables you to improve processes. You don’t need a whole infrastructure change, and you can do it just as well.
Some other benefits that come with digitizing with Tulip are:
No More Losing of Kanban Cards
Physical kanban cards get lost often and are impossible to trace. This would never happen with a digital system. You will know exactly when a kanban ‘card’ was picked up, returned, or taken out of the kanban loop, and it will lessen the administrative burden on the shop floor workers.
Changing Card Parameters Become Easier (Dynamic Kanban)
The nature of kanban cards is the parameters, and these have to be changed frequently. They contain key information such as daily usage, safety stock, lead time, quantity per container, and the number of cards. Digitization of this information makes Kanban much more approachable and dynamic.
Making the existing transactions digital and pipelining the information directly to execution allows planning systems to work with real information.
Kanban was just one example following the common practice of kanban, but these sorts of improvements and the opportunities that digital technologies present can be applied to all aspects of materials management.
We can help you uncover data without changing how your shop is run.
If you’re interested in transforming your materials systems, you can get started with a free trial of Tulip!