One of the most overlooked aspects that cost you money in managing your inventory is the cost of freight for the parts you buy and the overtime paid to storage staff to stay after work to get and ship urgent orders. If you haven`t made these deals and suddenly need the parts, you usually pay extra from your supplier to make the parts, higher acceleration fees for freight to get them faster, and then overtime for your storage employees to get the parts. Transportation costs and overtime contribute significantly to your inventory costs. These agreements reduce their impact on your inventory. Other benefits are to avoid the potential for these parts to be damaged in your warehouse or become obsolete and obsolete. Therefore, with both types of delivery agreements, you can make sure you use inventory quickly, don`t keep it too long for it to be accidentally damaged, and overcome the daily cost of money by making sure you bill your own customer faster and get paid faster. This helps cash flow. While you need to pay within 30 days of taking these coins, also make sure that your business is paid by your own customers within 30 days. Everything seems very simple, doesn`t it? Well, it can be, but there are important issues that need to be taken into account. When the factory tank is empty (because the parts in it have been consumed in a manufacturing process), the empty container and its Kanban card are returned to the factory warehouse (the stock checkpoint). The factory store replaces the empty container on the factory floor with the full tank of the factory warehouse, which also contains a kanban card. The factory store sends the empty container with its Kanban card to the supplier.
The complete container of the supplier with his Kanban card is delivered to the factory store. the supplier keeps the container empty. This is the last step in this process. Thus, the process is never short of product – and it could be called a closed circuit, because it provides exactly the necessary quantity with a single replacement container, so that there is never an oversupply. This “replacement tank” allows for uncertainties during delivery, use and transport in the storage system. . . .