PRODUCT DELIVERY - KANBAN and JIT

CJ Tools appreciate the advantages that can be gained from demand pull systems, by customers who are assembling our manufactured components/sub-assemblies into their finished products. We also recognise that the aim of these methodologies is to work towards an economic batch size of one, by minimising set up times and associated costs.

As a manufacturing company that has for many years specialised in the production of small batch requirements, we have already implemented policies that minimise tooling costs, component costs and unnecessary set up time. Where components are processed through many operations which may include purchase of castings, forging or laser cut blanks, machining plating painting fitting of inserts, assembly, inspection and delivery, J.I.T. in its present form must be considered an ideal, rather than a practical approach to us as manufacturers.

Therefore to enable customers to meet their objectives of minimal stock holding, maximum flexibility of production and minimum lead times (Lean Manufacturing), we have developed an approach which enables us to hold a stock of components to customer specification, which can be called off monthly, weekly or even daily. The delivery triggered by Fax (Faxban) or EDI Link.

To enable us to provide this service economically, we must produce in economic batch sizes, we must hold stock, and we must ask for guarantees that customers will provide us with the information required to manage the process and a commitment to purchase a pre-agreed quantity of stock within a defined period. Actual stock levels would need to be calculated bearing in mind economic batch sizes and production times. Any likely fluctuations in demand indicated by customer forecast and seasonal trends must be taken into account at the outset.

Contracts will be open ended but will be reviewed each year, such review will consider revision of annual requirements, price and any other relevant issues. There will be a small premium on piece part price to cover the cost of stockholding by CJ Tools, but this may be offset by savings made because the batches produced may be larger than would otherwise be called off in one lot.

Customers would be expected to indemnify CJ Tools against losses resulting from stock or work in progress produced within agreed limits, which were not called off of within a six-month period. CJ Tools would also retain the right to cancel the agreement or vary the agreed price if quantity called off fell below 25% of annual requirement in any six month period.

CJ Tools prices normally include delivery, however a premium may be charged on consignments below a certain value that would otherwise be uneconomic.

In some instances CJ Tools would expect to hold finished, part finished and raw materials stock., this would be appropriate when:

1. holding a buffer stock of raw materials where supply to us is not Kanban (extrusions, castings and difficult to source materials)
2. final stages such as surface treatment or painting constitute a high percentage of production cost.
3. silk screen printing or assembly are changed to produce different product variants, but take a relatively short time to process at that stage.

Conditions would need to cover action to be taken in circumstances where engineering changes were required and work in progress to previous issue was being held in stock.