In Pursuit of Lean

Auto supplier uses supply chain solution to apply, enforce lean manufacturing at U.S. plants

Northville, MI  December 13, 2002  Auto industry supplier TOKICO (USA) is using a supply chain management solution to improve its order management and fulfillment processes as a way to apply and enforce lean manufacturing at its U.S. plants, realizing cost savings and streamlining its overall operations.

TOKICO, founded in 1979 as a division of TOKICO Ltd. of Japan, has three facilities in the United States responsible for the engineering, manufacture and sales of parts for auto manufacturers and the aftermarket.

One of TOKICO's main initiatives has been to deploy a lean manufacturing approach to its U.S. plants so that it could cut production costs and lower inventories. As one component of this initiative, the company elected to implement a supply chain solution from Northville, Mich.-based provider Future Three.

The manufacturer was counting on the solution to help control the flow of parts into the plant by managing order information out to suppliers and fulfillment information back from the supply base.

Future Three's Eclipz solution allows TOKICO to manage its order fulfillment process with its suppliers through a single solution and track the status of its parts procurement in real-time via a Web browser. Orders can be broadcast out in a variety of formats  including EDI, XML and CSV  and received by TOKICO's suppliers. Suppliers then flow these orders into their demand systems for production.

Suppliers also respond with delivery, quantity and other information that immediately becomes available to TOKICO for their production planning. In this way, TOKICO has up-to-date information on parts procurement to allow their plant scheduling staffs to anticipate when component parts will be available at the exact time they are needed for production runs.

Through better management of their order management and fulfillment process, TOKICO has been able to apply and enforce the lean manufacturing model within its plants. Sam Gibson, chief information officer at TOKICO, says that the implementation has allowed the company to cut $5 million in inventory annually and has improved communications with the company's suppliers. In addition to inventory reduction, TOKICO also reports savings in reducing premium freight charges.

"Our entire order management process is much more predictable," concludes Gibson.