Framework for Implementing a Supplier Kanban System through Action Research Methodology

Purpose: The aim of this study is to develop a framework for the implementation of a Supplier Kanban System Design/methodology/approach: The research was conducted within a factory focusing on the warehousing and supplier-related operations using an action research methodology Findings: The study period spanning over six years was aimed to reduce the inventory and the manpower required to manage this inventory. This initiative led to a substantial average savings of more than 500,000 Malaysian Ringgit annually Research limitations/implications: The focus of the study is on a framework for implementing a Supplier Kanban System in a small or medium-sized company within the automotive industry Practical implications: This framework is designed to be self-sufficient such that the members of the organisation can use it without the help of external experts or consultants Social implications: Reduction in inventory stored in the warehouse, the amount of redundant work carried out by the employees and other non-monetary improvements which are difficult to a monetise resulted in a much better work environment and happier employees Originality/value: The changing in the paradigm of the manufacturing value chain affects the tier 1 and tier 2 suppliers in Malaysia. The lines and value chains posing challenges to the suppliers have brought the idea of the Supplier Kanban system. The Supplier Kanban System adopted the Action Research Cycles and Continuous Learning Cycles, and this process was documented and developed as the Framework for the Implementation of a Supplier Kanban System

Framework for the implementation of a supplier Kanban System in a small and medium scale industry

In the competitive environment of the automotive components industry, where the survival of a company is highly dependent on its ability to keep cost manageable and selling price low, an efficient inventory management system will reduce the cash tied down in inventory and improve the financial cost associated with it.This paper provided a step by step framework for small and medium scale industries (SMI) within the automotive component industry to implement a Supplier Kanban System (SKS) for managing and controlling the volume of stocks housed in their respective warehouse.The main benefit to be gained from implementing the Supplier Kanban System (SKS) is the reduction of inventory and manpower required to manage this inventory.When effectively implemented, the company will hold only three days inventory and the supplier will continuously replenish the inventory to sustain a three day stock level.The three day stock level is necessary because of the volatility of demand within the automotive industry in Malaysia and is designed to strike a balance between keeping Just in Time (JIT) stock and overstocking. The framework is divided into three levels and the first level evaluates a company‟s suitability to implement the Supplier Kanban System, the second level guides the company towards the preparation for the implementation and third level guides the company on the implementation and sustainability.Each of these levels has a series of steps, which has to be executed sequentially and one can move to the next level only when the current level has been successfully implemented