That kind of supply chain requires real-time visibility, but not at the expense of having to implement cumbersome and costly software at all the supply chain's touch points. That's why Metaldyne is turning to new software from ERP vendor QAD Inc. that will keep track of supply and demand at its customers' and suppliers' facilities using little more than a Web browser and scanning technology.
In July, Metaldyne will begin testing a new module in QAD's hosted Supply Visualization software called Kanban Visualization (kanban is a Japanese word describing cards used to control work-in-progress, production, and inventory flows). Metaldyne will use the software, unveiled this week, with the automakers it supplies; the software will show Metaldyne in real time when new supplies need to be shipped to ensure that the customer's plant never runs out.
Here's how the Kanban Visualization works: When a customer receives supplies, it can scan a bar code; the data from the scanner is uploaded into the Web-based QAD program on the customer's PC, where it's electronically sent to Metaldyne. The same process occurs when the customer uses the supply. At Metaldyne, the software tracks all the information coming from the customer; if supplies drop below a pre-set level, the appropriate managers at Metaldyne can be alerted via E-mail or cell phone.
Metaldyne now plans its supply schedule based on material requirements planning from the tier one supplier that sits between Metaldyne and the automaker. But Ed Witkow, director of supply chain for Metaldyne, says errors and inexact planning can throw off the supplier's schedule. "If I can see when [a customer] consumes something and make sure that we keep supply at certain levels based on that information, then it doesn't matter if an engineer put a bill of materials in wrong," Witkow says.
"The software is about keeping the shelf full. When I run low, send me more. And I'm not going to tell you when to send, I will provide you visibility into my shelf, and you keep me between the minimum and maximum levels," says Jim Kirkley, chief technology officer at QAD.
Metaldyne already has had success with QAD's Supply Visualization software, which tracks supply schedules via EDI. At its plant in Hamburg, Mich., for example, Supply Visualization helped Metaldyne reduce its raw materials stock on hand and open up 6,000 square feet of space. "We were able to put in another production line and put out more product, which in turn generates more revenue," Witkow says. "It's a win-win situation."
The Kanban Visualization module is available now as part of Supply Visualization. Pricing depends upon configuration and how many parts or materials are put through the system.