McKesson Automation Profiled in Premiere Issue of Ultriva Lean Publication

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McKesson Automation Profiled in Premiere Issue of Ultriva Lean Publication

Published on: February 13th, 2010 12:01am by: trcutler

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(OPENPRESS) February 13, 2010 -- Narayan Laksham, CEO of Ultriva, (www.ultriva.com) announced in the introductory issue of Profit From Lean, a quarterly newsletter for Ultriva customers, partners, consultants, and manufacturers. The premiere issue looks at McKesson Automation as an important case study.

To identify supply-chain inefficiencies and implement lean inventory management, McKesson Automation partnered with Ultriva, the electronic kanban specialist. “McKesson had a solid foundation with its six sigma program and manual kanban systems, but our initial investigations revealed the efficiency of their supply chain could be improved,” said Laksham.

Ultriva’s Lean Execution Suite consists of modules like Customer Kanban, Supplier Kanban, Internal Kanban, SBR, Lean Production and OEE, which allow manufacturing companies to systemize, sustain, and scale lean disciplines across the organization. Ultriva's flagship product, Collaborative Electronic Kanban, eliminates stock-outs while reducing inventory levels up to 75%. Ultriva modules are in use in more than 130 plants worldwide, incorporating more than 5,000 suppliers, transacting over 1.5 billion dollars of inventory at industry leaders such as AGCO, CNH, Emerson, IR-Trane, McKesson, Rexnord, and ThermoFisher.

To identify areas for improvement, Ultriva scheduled an onsite diagnostic visit and took a read of McKesson’s supply chain ‘vital signs’. Based on this, in August 2007, Ultriva developed a plan for an initial six-week pilot with four focus areas:

1. Eliminate the use of spreadsheets for exchanging information with suppliers, in favor of an electronic closed-loop system.
2. Fix errors and scalability limitations associated with the manual system.
3. Address disconnects in the information flow between order entry, manufacturing shop floor and accounts payable.

At conclusion of the successful pilot, McKesson pressed for a full production system, which was implemented in December 2007 after a typical six-week integration period. With the majority of its suppliers and 60 percent of the dollar value of all in-bound parts running through Ultriva’s system, McKesson now had a collaborative platform—into which its suppliers were connected—that enabled all Kanban signals to be tracked and traced.

“One of the operational benefits Ultriva brings is much better visibility into our supply chain,” says Charles Stack, materials manager at McKesson Automation. “We can see what was ordered, when it was shipped, when it arrived, when it was used, and when it was paid for. This means my purchasing and accounts payable people can now ‘manage by exception’, and frees up valuable personnel.”

McKesson is on target to manage 90 percent of its materials spend on the Ultriva system by encouraging all its raw materials suppliers to tap into the portal, by the year end.

The results are impressive:
1. 10 percent improvement on inventory turns.
2. 50 percent reduction in supply chain administrative costs.
3. Improved communication between the shop floor and suppliers.
4. Sharpened competitive edge through faster delivery of custom products.
5. Shortages for JIT items reduced to less than 1 percent of deliveries.

To read the entire McKesson article users have to sign in to access the newsletter and will get instant access. The introductory issue is free of charge and can be access immediately by registering at http://www.ultriva.com/News/newsletterreg.aspx?smc.

Ultriva
www.ultriva.com
Cindy McGowan
pr@ultriva.com
408.248.9803