AO Smith Use of Ultriva’s e-Kanban Profiled by Manufacturing Journalist TR Cutler

By implementing electronic kanban software, A. O. Smith has been able to make its plant-floor personnel and suppliers effective agents in the replenishment cycle, squeezing out inefficiencies, errors, and costs. The company boosted its on-time customer delivery rate significantly, increased inventory turns by 100 percent, and substantially reduced inventory.

Ultriva (www.Ultriva.com) is live at over 120 plants across 10 countries.  Companies like Emerson, BE Aerospace, Trane, Ingersoll-Rand, McKesson, AO Smith, FRANKE and AGCO among others are using Ultriva to collaborate with over 4000 suppliers and transacting $1.5 billion of purchased parts every year.

Ultriva, the lean leader, with an electronic kanban focus, is featured in the current issue of Business Excellence.  Manufacturing journalist, TR Cutler, profiled AO Smith which deployed Ultriva Electronic Kanban at its Ashland City plant in three business days. Approximately twenty suppliers also started using the system. This new system automated the manual kanban process and gave materials managers, receiving personnel, and suppliers instant, accurate visibility into inventory, using a Web-based interface. When suppliers manufacture parts for the company, they attach a kanban label; when the parts arrive at the loading dock, the receiving clerk scans the label, which updates the parts’ status as “received,” and stores the parts in inventory. When a part is removed from inventory, it is scanned again, which automatically eliminates the part from inventory and sends a new order to the supplier. Because orders are placed automatically, planners can spend more time improving the efficiency of the supply chain. When a part reaches a critically low level, the system sends an e-mail message to the internal planner and the supplier.

Improved On-Time Supplier Performance

1. O. Smith measures supplier performance more easily and effectively.  According to the company leadership, “Now we can calculate supplier delivery performance faster and more accurately and share the figures with suppliers. Our average on-time supplier performance has improved by 16.8 percent.” Cyndi Boehmer, Inside Salesperson for the A. O. Smith Protective Coatings Division, an internal supplier, reflected that, “With the new software, I can go in and see how much material each plant has on hand. As they use parts, I can see what they need, which helps me plan truck scheduling. My job is much easier; I don’t have to call the plant and ask someone to run out on the floor and count inventory.”  Similarly, Denise Provence, Manager of Customer Service and Master Scheduling at White-Rodgers, another A. O. Smith supplier, shared, “Before, I received an inventory report each week from the company….now, I can use the new system any time of the day or week to see their balance on hand.”

Ultriva

www.ultriva.com

Cindy McGowan

pr@ultriva.com

408.248.9803