If one tries to consider every facet of plant systems and management, it becomes apparent that there are too many topics to list. Narrowing the concept to inventory still leaves multiple considerations. Fine tune even further to just-in-time hose delivery and inventory management, and you're starting to talk serious benefits and substantial increases in your inventory investment performance.
Just in time
The greatest benefit of just-in-time hose product delivery is that the plant warehouse doesn't need to hold excess inventory. In the days before just-in-time practices were common, purchasing departments bought hose product once a month and also kept months' worth of stock on hand. It wasn't necessarily a problem if demand for the month was low. But if demand was high, or an order arrived late, companies ran the risk of running out of hose products, possibly stopping production and missing order ship dates. Just-in-time warehousing and delivery reduces inventory and with it, the costs of holding stock. The more that product flows directly to the point of use, the greater the decrease in warehousing needs. Because more frequent delivery is available, the chances of getting caught short almost disappear and significant cost savings are realized.
Facing hose inventory challenges
The hose industry serves a variety of applications. STAMPED Size, Temperature, Application, Media, Pressure, End connections, Delivery is an acronym used in the industry to characterize applications. It's also used to ensure that hoses are not misapplied, as most hoses are used in locations or areas where safety is of particular concern.
Hose ranges in size from small 1/8-in. inside diameter hoses that might be used on a compact piece of medical equipment to hoses as large as 48-in. inside diameter, which might be used to transfer hot air in a steel mill. Consideration must be given to the temperatures of the media being transferred and the environment around the hose.
Consideration also is given to the media being transferred. Hoses might be used for shop air or for something as hazardous as transferring hot sulfuric acid. The pressure the hose needs to withstand is critical. A hose must have different properties and characteristics to be used in Alaska in December versus the desert in July. Hoses must handle the media, the temperature and the pressure. Different safety factors apply to the different materials that can be transferred. The end connections offer a unique challenge because of the wide variety of types and sizes available. Delivery takes these considerations and ties them to just-in-time delivery.
Just-in-time inventory gives a hose supplier many ways to keep a customer's pipeline filled. It can include partnerships with vendors who have back-up inventory of highly engineered parts. A local branch location could carry the required customer inventory, usually a one-month back-up supply. The local branch also could work with the hose shop to store back-up inventory.
In the case of a customer-specific need, the local branch passes along information to its ISO-certified hose shops. The hose shop is responsible for ordering the product. The local branch also performs quality inspections, cleaning and any reworking involved. The result is that the customer is able to keep a plant running, but isn't bogged down with excess inventory.
When developing a just-in-time inventory program, it's important for customers and suppliers to be able to interface via computer. For example, an engine manufacturing company that consumes large numbers of hose products can use just-in-time inventory to manage the hose products. The supplier might keep up with as many as 500 to 1,000 live parts relating to hose and rubber needs. The engine manufacturer places blanket orders as much as 24 months ahead. Blanket orders are placed with release dates for each particular part number, assigned according to production schedules. New orders are placed and change orders are added twice a week based on updated production schedules. These orders and change orders funnel directly to the distributor electronically. Both companies save paper and real time through the just-in-time relationship and by transmitting needs through an Internet purchase order processing system.
Production demands and supplier management are linked strategically and operationally. Advances in technology also have an impact on inventory management. IT-based stock control systems with bar coding are integrated with other systems to give better control over order assembly, stock availability and monitoring.
Keeping up with production
Just-in-time covers a broad range of items a supplier might handle. For example, the supplier often performs a twice-a-week physical inventory of items on the floor. Stock is replenished based on use. The big challenge a hose supplier faces in keeping up with production is the number of combinations and products involved under the hose and rubber umbrella. Additionally, maintaining the related inventory is labor intensive. Hydraulics-related products alone include male and female pipefittings, JIC fittings, metric fittings, flat-face fittings and high-pressure flanges, among other things. Metal hose involves male pipe fittings, female unions, high-pressure flanges, and more. Bear in mind too that these products are available in many sizes. The supplier must stock many components and end connections and be able to pick items quickly if they aren't already assembled. Additionally, a supplier must be flexible and able to respond to change orders quickly. For example, a customer may require 600 pieces in June, but when sales are good, the 600 pieces might be needed in April. Conversely, a large order due in April may get pushed back to July.
Finding the right fit
When identifying a supplier to integrate just-in-time hose inventory management into your shop, look for a company with proven capabilities in bringing different operational systems together. Whether it's hoses or any other product, just-in-time inventory management is a worthwhile operational system for manufacturing companies and suppliers to adopt and implement. Technically, procedurally and managerially, just-in-time requires attention to data, information and communication. Assessment of requirements, programs to establish new structure for production, materials handling, manufacturing processes and distribution facilities also must be taken into consideration. The right supplier provides an integrated perspective with coherent strategic direction along with reliable delivery, consistent quality and the ability to respond quickly to demand fluctuations. Data flowing in the just-in-time system and the ability of suppliers to respond ensures a functional, seamless and cooperative relationship. Through just-in-time practices, increases in productivity and effectiveness can be seen at each operational level to give the entire supply chain a competitive edge.
Tony Cefalu is assistant vice president, Mi Hose and Rubber at Motion Industries. He can be reached at (630) 876-6094.