NewsDesk Software: Lean Supply-Chain Solutions Help Streamline Manufacturing Operations
Narayan Laksham is founder and CEO of Ultriva Inc. (Cupertino, CA), a developer of supply-chain manufacturing software solutions.
Manufacturing Engineering: Your company recently updated its supply-chain solutions. Describe the system and what it does for manufacturing productivity.
Narayan Laksham: Ultriva’s cloud-based supply-chain solutions streamline the production schedules with customer demand and synchronize the supply with shop-floor consumption. It uses the consumption-driven replenishment model to establish a true pull process across the value chain. The primary goal of the system is to right-size the inventory whether it is finished goods, work-in-process or raw materials. Using a unique supply-chain-loop-based architecture, manufacturing companies can establish real-time collaboration with their customers and suppliers. This collaboration allows manufacturers to carry the right mix of inventory at the distribution center, shorten the lead time to their customers and improve the service levels through elimination of part shortages.
ME: What are the latest features in the new system?
Laksham: Our supply-chain solutions have three primary modules—Collaborative Supply Portal (CSP) to manage raw material replenishment, Lean Factory Management (LFM) to manage shop-floor schedules and Collaborative Demand Portal (CDP) to service distribution centers, dealers and OEMs. All these modules are focused on the execution side of factory floor. In the new release, we have added modules to supplement planning and procurement. The collaborative request for quote [RFQ] module allows buyers and suppliers to collaborate easily and effectively in a bidding process. The iterative process tracks and traces the bids in real time until a winning bid is converted into a purchase order. The collaborative Planning Module integrates planning data with execution and establishes a feedback loop.
ME: How do your solutions further lean efforts, with capabilities like electronic Kanban?
Laksham: Ultriva focuses on leaning the supply chain. One of the key factors to ‘leaning the material replenishment process’ is to set up a pull system. The underlying methodology for implementing a pull system is referred to as Kanban, and historically Kanban has always been used as a manual card-based system. This worked well in the past where manufacturing was vertically integrated and the suppliers were located within a short radius. In today’s environment where manufacturing is less integrated and the suppliers are global, the manual card system doesn’t cut it. In response to the changing realities of the supply chain, Ultriva devised an electronic Kanban that turns the manual card system into a powerful closed-loop Kanban through supplier collaboration and the real-time flow of order, shipment and receipt information. The electronic Kanban is workflow-controlled and it allows for several metrics to be automatically computed, resulting in the next important step of lean—referred to as Kaizen, or continuous improvement.
ME: How important is lean to today?
Laksham: Lean in its purest form is removal of waste. Manufacturing is more competitive than ever with shorter lead times, higher service levels, exploding number of finished goods SKUs and thinning margins. Over the last couple of decades, the focus of leaning in manufacturing was concentrated on streamlining the factory floor, aligning of production lines, optimization of space and standardizing of operating procedures. One key area which was not touched was the supply chain material replenishment. Given that purchase parts could be as high as 60% of manufacturing costs, applying lean methodologies to this process is critical. As excess inventory eats the margins, part shortages reduce customer service levels and result in lost revenues. Today, leaning efforts have been applied only to areas where companies have full control, such as the shop floor; however, it is high time they start applying lean principles to areas where they have less control, such as supplier and customer collaboration.
ME: How has going to the cloud and employing Software-as-a-Service (SaaS) changed the software industry?
Laksham: SaaS is an evolving process. Even though in principle it follows the utility market, the software purchasing process needs to follow this evolution. Over the last 50 years, we have transitioned from leasing the software (during the mainframe era) with a dumb terminal, to purchasing the license outright and customizing it. With SaaS, customers can transition to a ‘use as you need’ and ‘pay as you use’ model. This is a big change of mindset, as the software is not controlled by the customer but only by its usage. The concept of a private vs. public cloud will aid in this process as well. The point of distinction is that SaaS is a deployment model, while cloud is a platform for deployment. It is important for applications to follow the SaaS model irrespective of on which platform they are deployed. ME
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Edited by Senior Editor Patrick Waurzyniak:
Published Date : 12/1/2012