Material supply to assembly stations - A study at Nederman, Helsingborg

Abstract

Purpose: The purpose of this study is to improve the material supply to assembly stations at Nedermans and identify parameters and principles that determine if the components should be stored at the assembly station or in the warehouse. The improvement should reduce the floor space used for assembly, increase the assembly utilization rate and reduce waste of time in the material handling.<br>
Method: The study has been accomplished with a system approach, which fits the task where the holistic environment is of greatest importance. An abductive research method has been used, due to the authors’ wandering between theory and empirics. The study has both a qualitative and quantitative focus. Interviews, company visit and observations compose the main qualitative data collection. Quantitative data from the enterprise resource program and theoretical studies has also been of greatest importance. The authors have mapped the ordering process at three assembly stations at Nederman. Data about demand variability, picking frequency and number of transportation orders was collected. From this data, the distribution of transportation orders was plotted. The demand variability and picking frequency are two of the fundamental decision variables for Kanban. The inventory turnover and picking frequency were also plotted in a developed framework. These plots are together the foundation of the analysis.<br>
Theory The report includes several theory sections used as a base for the study. A high share of the theory covers parts from Lean production such as Kanban, Two-bin Kanban, standardized working methods, stabilize the load of work and mapping of waste. Theory about warehousing is also included like inventory turnover, inventory carrying cost and location of articles in an inventory.<br>
Conclusions: The authors suggest that Nederman should start using Kanban for an improved component ordering process. Kanban should only be used for components with a high picking frequency and a low variability. The study provides a framework that Nederman can use as a guideline in the identification of Kanban components. The authors have identified three possible Kanban areas, Kanban-A, Kanban-B and Kanban-C. Nederman should start with the Kanban-A components. The Kanban-A components have a variability factor of demand between 0 to 0.6 and a picking frequency that is at least 125 times per year. The Kanban solution reduces the inventory at the assembly stations and increases the assembly utilization rate. A Kanban solution will stabilize the work load for the warehouse personnel. The number of pallet locations in the station buffer will be reduced up to 25% due to the Kanban implementation. A Kanban solution will also reduce the component ordering time by 73 hours per year at the detail studied assembly stations at Nederman in Helsingborg. To facilitate an implementation of Kanban and take care of all ideas from the involved personnel, the authors suggest that quality circles should be started. Quality circles also encourage and motivate the involved personnel to contribute in process improvements.<br>
The study has also identified a potential improvement in the material handling from the warehouse to the assembly station. By investing in a conveyer with a sensor, unnecessary movements and waiting time can be eliminated and correct picking order can be ensured. A conveyer solution would reduce the internal logistics circulating time with 133 hours per year.<br>
By standardizing the load carrier where cartons are replaced by bins, a reduction floor space can be achieved. The bins can be placed in shelves which will optimize the allocated floor space and improves the visualization of the station buffer.<br>
The study also provides Nederman with a framework that identifies components in the station buffer with a low inventory turnover. For the components within the Kanban-A area with a turnover less than 50 should change order quantity according to the framework. By reducing the component order quantity for these components the inventory will decrease and hence release floor space.<br>
Material supply, Lean, Assembly, Inventory turnover, Kanban, Lead time, Stabilize the load of work

• author: Fredriksson, Karl and Sallmén, Charlotte
• supervisor: Andreas Norrman
• organization: Engineering Logistics
• course: MTT820
• year: 2011
• type: M1 - University Diploma
• subject: Technology and Engineering
• keywords: Material supply, Lean, Assembly, Inventory turnover, Kanban, Lead time, Stabilize the load of work
• language: English
• additional info: ISRN LUTMDN/TMTP--5712--SE
• id: 1883097
• date added to LUP: 2011-03-31 15:36:35
• date last changed: 2011-03-31 15:36:35