Fisadco implements customer Kanban system

Fisadco Engineering, a precision engineering and fabrication sub-contractor, has implemented Kanban, an example of lean manufacturing.

Daren Smith, managing director of Fisadco, approached five of the company's best customers about signing up to this way of working: four of them agreed.

An agreement was reached on the price of components and the number required on a monthly basis, with an informal contract signed on a six-month rolling basis.

Components would be manufactured by Fisadco in line with the customer's previous usage history and placed in a quarantined area.

The customer would then email an order for the number of components required that month, confident the parts would be received within 24 hours.

Smith said: 'It has enabled us to plan our production.

'It certainly helps when you know a month in advance exactly what you will be making, although there has been a complete change in the way we now do things.

'It has helped our cash flow as we know exactly what our outgoings and incomings are.

'The benefit to our customers is that they will have components delivered to their premises exactly when they need them, with no financial outgoings until after the parts are delivered.

'We have also purchased a new plant to make parts more efficiently and in many cases have been able to reduce prices.

'When building up stocks of components for our customers, it was all at our expense, so a little frightening initially to see all the costs with little return for the first couple of months, but it soon evened out.' More than three years have passed since Fisadco's introduction to Kanban and more than 50 per cent of its customers are now enjoying the benefits.

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