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Kanban System provides significant savings to expansion tank manufacturer

Press release from the issuing company

RANDOLPH, MA - Flexcon Industries USA, headquartered in Randolph, Massachusetts is a leading manufacturer of pre-pressurized diaphragm expansion tanks for water well, water pressure boosting, reverse osmosis, heating, and thermal applications.  The company is the second largest producer of diaphragm tanks in the Western Hemisphere. Through a grant from the Massachusetts Workforce Training Fund, Flexcon employees worked with Bob Elliott of the Greater Boston Manufacturing Partnership (GBMP) to apply continuous improvement principles and tools to improve their work processes.  Employees began with a one-day class called Introduction to Continuous Improvement, followed by a two-day 5S (workplace organization) class, and then participated in a two-day Kanban class to learn how to set-up pull systems to signal replenishment of parts and materials based on customer usage.  As a result of the training Flexcon set up several pilot parts on a Kanban system in the late summer of 2008 and the company has continued to add additional components to their Kanban program with good ongoing results. Below is a current summary of the Kanban project activities and outcomes to date.

The Kanban project goals were two-fold:
    1.    Eliminate stock outs on components required on the composite production line
    2.    Reduce component inventory levels
    •    Flexcon has experienced ZERO stock outs on initial items placed on the Kanban system since it was set up.
    •    Inventory dollars for initial Kanban items have been reduced by more than $70,000, well below previous maximum levels.
    •    Flexcon has seen a dramatic improvement in time wasted "moving things around".
    •    The Kanban system provides space for everything and ensures the company does not have too much inventory to store in designated areas.
    •    Flexcon has set up a system to visually track progress on inventory reduction.

As a result of their positive experience with the initial pilot of the Kanban system, Flexcon went on to add many more items to the Kanban system, including 27 composite corrugated items.  Flexcon considered these items to be the most difficult components to plan and they were frequently out of stock.  Since placing them on the Kanban system there have been zero stockouts! 
Ten plastic bags are now on a "breadman" system of replenishment and this program has given Flexcon the added benefit of significant reductions in required inventory space.  Other recent results from parts placed on the Kanban program include:

Glass & Resin
·   4 part numbers on kanban resulting in over $14,000 reduction in inventory dollars
·   6 part numbers on kanban for a reduction of over $15,000 in inventory dollars
·   3 part numbers on kanban resulted in a reduction of over $54,000 in inventory dollars
·   9 part numbers on kanban for a reduction of almost $15,000 in inventory dollars
·   7 part numbers on kanban for a reduction of almost $8,000 inventory dollars
Total cost reduction: $106,000........so far.