Electronic system streamlines fastener supply

APW is benefiting from major supply chain efficiencies following the introduction of a web-based inventory management system with key supplier Southco.

APW is benefiting from major supply chain efficiencies following the introduction of a web-based inventory management system with key supplier Southco, a global provider of engineered access hardware solutions.

The contract electronic equipment manufacturer APW, a subcontractor for companies such as Sun Microsystems, is the first Southco customer in Europe to implement the e-Kanban system, through which it now orders over 400,000 parts per year.

This signifies a huge step in inventory management, demonstrating the solidity of the relationship between APW and Southco.

The benefits of this e-system are endless.

The direct link to Southco stock levels enables APW to carry minimal inventory and have greater stock visibility and control, almost zero lead times, plus substantial cost savings incurred from buying direct from Southco.

This is a win-win solution for both partners.

The system is very quick and easy to use.

APW simply uploads its stock requirements onto Southco.com via a weblink at their end.

The e-Kanban calculator then analyses the Southco inventory position, lead time, daily demand and transit time.

When stock of products at APW reaches a trigger position, the e-Kanban system automatically releases the relevant Southco products and sends an e-mail notification to APW.

Richard Taylor, Materials Manager at APW explains: "Previously, we used a traditional MRP system which meant we were encompassing stock inaccuracies due to such large volumes of excessive stock being carried".

"The system required a physical stock inventory check every six to eight weeks which was proving to be very costly".

"The overall effect this was having on the supply chain was that it was beginning to cause delays in the production process which in turn meant we were not always able to fulfil lead times".

The new e-Kanban system has been up and running since mid-January 2004.

All system requirments were integrated at the Southco end, requiring little more than a 30min setup time with APW to initiate passwords.

Taylor continues: "The setup process was seamless".

"The whole system was up and running within 10 weeks of the initial proposal being discussed, and this was during the busiest time of the year for APW".

"There was no need for us to purchase any additional IT software to install the system and due to the simplicity of the system no training was required either".

"Southco walked us through the operating process on screen and we took it from there".

Since its implementation, the e-Kanban system has made a noticeable difference in numerous key areas at both APW and Southco.

The more obvious being: reduced inventory and man-hours, no purchase orders, no more stock outs, no lead times, a smooth production process due to ready availability of parts on the shop floor, and time savings resulting from the streamlined nature of the system which requires minimal supervision or process management.

Greater visibility over the supply chain has also helped APW improve its ability to operate more efficiently under the cost and time sensitive pressures found within the computing and electronics manufacturing industry.

The project was initially a European implementation using APW's Galway office as the test bed.

The success of this test site was such that the system was quickly deployed to its Dundee office before evolving on a global scale to the Shanghai operation, with future plans underway for the San Diego office to spearhead the US drive.

"The level of support provided by Southco throughout the project was unique", continues Taylor.

"Southco really led us to where we wanted to go, with great support from not only the UK, but also its US and Asian offices".

"Their commitment and industry expertise gave us confidence throughout the whole project".

"They understand the complex needs of our industry, of APW and of each link in the supply chain, and have provided a service to meet the needs of each".

"They are no longer a traditional component supplier, they are a valued service provider".

"The system has been 100% faultless.

It is very simple and easy to use and addresses some of the key business metrics that we use at APW".

"This has helped us greatly improve our key measures and we are looking to promote it to our other main suppliers".

Callum Whitelaw, Key Account Manager at Southco comments: "Our passion at Southco is to listen to our customers, understand their needs and meet the challenges they pose upon us".

"Our innovative way of thinking enables us to exceed our customers expectations and really help them save valuable time and resources".

"E-Kanban is just one of the many value adding services that Southco offers contract electronic manufacturers alongside global contract pricing, technical support and global program co-ordination".

"Working strategically and as part of a team with our customers is where Southco excels and this is key to our successful partnership with APW".

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