Cost Savings

Making tools and supplies available to the work force at the point-of-use has been the driver for implementing KanBan and other inventory management solutions.

Bringing control to that distributed inventory can take you to the next level of real savings. Immediate return on investment is being realized by organizations as they provide control and bring accountability to supply consumption on the shop floor.

Material Savings
Annual Category Spend: 500,000
Monthly Addressable Spend: 29,167
% Spend Reduction: 30%
Monthly Product Throughput: 20,417
Monthly Gross Savings: 8,750
 
Number of SupplyPro Systems Utilized: 4
Monthly Lease/Application Investment: 1,060
Investment Overview:
Monthly Savings: 7,690
One-Time Implementation: 3,935
Payback: <1 month

The example to the right illustrates the return that can be realized by addressing a category spend of $500,000 and controlling the spend on the items that generate 70% of the total spend. A 30% reduction yields overall savings of 21% reduction; (i.e. 70% * 30%).

For most applications, this level of savings can pay for multiple point-of-use systems within one month.

 

Productivity Savings*
Avg storeroom visit time (minutes): 20
# visits per person per day: 1.3
Travel manhours per month: 1,131
Loaded cost per hour: $22
Productivity "Cost" per month: $24,875
 
Number of SupplyPro Systems Utilized: 13
Monthly Lease/Application Investment: 4,000
Investment Overview:
Monthly Soft Cost Savings: $20,875

Placing materials at the point-of-use to reduce travel time for the production workforce, and savings from storeroom attendant time at the window, provide productivity savings.

Recapturing previously lost work hours, and applying them to the day’s production, easily helps achieve productivity savings.

The example to the right is from a real-world experience for one customer.

Over the course of two years, they consistently saved over 1,000 man-hours per month resulting in a significant overall productivity improvement.