avnet company confidential lean product fulfillment (lpf) proposal overview september 25, 2007
TRANSCRIPT
Avnet Company Confidential
Meeting Agenda
• Review the Key Objectives of the LFM Model
• High level review of the material flow• Open Discussion on the Model
– Initial Thoughts….– Challenges to over come
• Implementation Elements• Next Steps
Avnet Company Confidential
LPF Program Objectives
• Enhance our current In-Plant store program to:– Provide more inventory available to support
manufacturing– Reduce Micron Inventory Ownership for WIP– Reduce the number of System transactions– Enable flexibility for growth as more production
comes to Micron-Puerto Rico– Enable more focus by on-site resources to manage
material issues– Utilize an e-commerce solution to enhance Quality
and efficiency
Avnet Company Confidential
High Level Solution Summary
• Line Side Consignment Kan bans owned and managed by Avnet. – (2 Bins – 1 Week worth of inventory Each)
• Bins scanned and replenished by Avnet
• POURS.COM manages all transactions
• Billing of Bin when fully empty
• Material replenished within 24 hours
• Avnet Personnel managing process and transactions
Avnet Company Confidential
LPF Process Flow
1wk 1 wk
1 wk1 wk
Bin 1
Bin 1
Bin 2
Bin 2
Avnet owned Kan Bans
Kan Ban Material is stagedLine side And owned by Avnet.2 (1 Week) kan bans per part
Material is consumed by the manufacturing lineOperators from Kan Ban 1
Avnet Company Confidential
LPF Process Flow
1wk 1 wk
1 wk1 wk
Bin 1
Bin 1
Bin 2
Bin 2
Avnet owned Kan Bans
Kan Ban Material is stagedLine side And owned by Avnet.2 (1 Week) kan bans per part
Material is consumed by the manufacturing lineOperators from Kan Ban 1
Avnet IPS Mgr routinely goes to Floor Stocking Locations to observeand signal Kan Ban Replenishment for consumed Items.
IPS Mgr. Scans PoursBin Boxes with Bar Code scannerReturns to Avnet IPS and transfers ScanInformation into POURS.COM
Avnet Company Confidential
LPF Process Flow
IPS
InventoryEDI
Replenishment
Signal
IPS Operator
Processes POURS
Release Trigger
POURS Packing
Slip Prints
Next Day
Delivery
To POU
Line side
Kan Ban
Location
Components
Delivered to the POU
Export of Inventory ReplenishmentTo Micron SAP System
Invoicing against existingBlanket PO
Parts are Pulled
By Warehouse
Operator
Serialization Barcode
Labels applied
Avnet Company Confidential
Solution Benefits• This model removes the high transaction activity involved in the kitting
process…by 2/3 rds– More productivity from Existing Resources…Avnet and Micron
• Moves Avnet Buffer inventory from our IPS to the Point of Use…..– More flexibility for Manufacturing to keep building
• E-Commerce Solution utilizing POURS to manage all transactions via EDI– More Quality in Data / Faster processing / Higher Efficiency
• Micron Inventory Reduction for WIP and residual inventory…– Reduction in 4-6 Days of Inventory (RM/WIP) $110+K Inventory
Reduction based on Avnet Business Level ($8 Mil/ $22k/Day)
• Reduce and eliminate Material shortages and allow for more up-stream pipeline focus by on-site resources
• Minimal Process Change for Micron
Avnet Company Confidential
Model Discussions
• What are your initial thoughts? • What changes would you make to the model?• Are there any issues/challenges to over come?
(Yellow Lights…we need to slow down and discuss that you think might inhibit this model?– Labeling requirements– Space requirements– System Transactions / Inventory Information– Other issues we might have note have considered
• What metrics shall we be tracking to insure success?
Avnet Company Confidential
Finalize Model…Next Steps
• Review Solution proposal with key players in Manufacturing / IT / Purchasing / Materials
• Discuss the value proposition and determine quantified savings jointly with the program
• Obtain Green Light to move forward…
• Establish Implementation Team
• Begin Safe Passage Model Implementation
• Pilot….Refine Process….Expand program
Avnet Company Confidential
Point Of Use Replenishment System• Web Based - www.pours.com
• Secure access from any Internet connected PC
• No custom software to install or support
• Simple, Intuitive User Interface
• Automate Replenishment Signal to Any Supplier• Scan to trigger electronic orders
• Reduce Administration
• Reduce Inventory / Increase Turns
• Manage Multiple Supply Chain Models• Kanban – Scan to “Pull” replenishment inventory
• Min-Max – Manage QOH within specified parameters
• Consignment/VMI – Automate communications to suppliers
Avnet Company Confidential
POURS Features POURS Features (1)(1) Web Based
Secure access from any Internet based PC Share data across multiple facilities, departments or partners in the supply chain
Ease of Use Simple, online, intuitive user interface Minimizes training and support
Configurability Configurable to meet the specific needs of your supply chain model Kanban, VMI or Min/Max models
Security Your data remains secure and confidential in an enterprise-class data center
Multi-Supplier Create consistent processes across all material – regardless of supplier Manage replenishment or consignments from any supplier
EDI Industry standard EDI transactions Automate transactions to & from any EDI capable trading partner No additional software required
Avnet Company Confidential
POURS Features POURS Features (2)(2) Data
Extensive list of reports and label formats Data exportable to Excel or other applications Integration with MRP/ERP systems
Exception Based Processing Exceptions identified in heads-up area of each screen Can be configured to send email alerts proactively notifying the
appropriate user(s) of exceptions
External Data Linked to Avnet’s database of nearly 3 million part numbers Automatically look-up Avnet’s Inventory, hazmat details,
package quantities, etc.
Advance Ship Notices Integrated ASNs provide online access to tracking information Direct links to FedEx, UPS & DHL
Avnet Company Confidential
Benefits of POURS.COMBenefits of POURS.COM Reduce the cost of procurement by eliminating non-value-add activities.
Increased inventory turns.
Reduction in inventory frees working capital for re-deployment.
Increased manufacturing flexibility due to part availability.
Replenishment triggered by line-side personnel.
Improved quality through bar code driven processes.
Increased material balance control and visibility.
Quick implementation.
Reduced burden on your IT resources.
Single point of purchasing in multi site engagements.