Ensto: the case of the Finnish multinational energy company
The success of the E-kanban to increase internal efficiency and increase the performance required of the Group's suppliers
A Better Life with Electricity. This is the mantra of Ensto, a Finnish industrial group specialized in the development, production, and marketing of electrical systems and components. A leader in the marine installation market, Ensto is also focused on the development and marketing of products for electrical installations and control systems for tertiary and residential buildings, heating and lighting solutions, and smart electrical solutions to increase the efficiency of smart grids, buildings, and transport systems.
Founded in 1958 by Ensio Miettinen, Ensto is still a family-owned Group with more than 1,600 employees in Europe, the USA, and Asia. Its products are assembled in seven countries, in compliance with the directives of sustainability and ecological production. In line with a highly advanced management model, Ensto has developed the Ensto Operational Excellence (EOX) program to promote the implementation of lean thinking in factories.
From the manual management kanban to the e-kanban
After a year of management of the manual kanban pull system, through kanban cards created with plasticized A4 sheets, in 2014 the company realized the need for an electronic system that would improve the management possibilities, finding in KanbanBOX the ideal tool to reorganize both the internal system and the network of suppliers. There are currently nearly 4,000 kanban cycles within the company and 23 vendors connected to the system.
We interviewed Lasse Lehtinen, head of the Lean Production and Supply Chain Development project at Ensto, to learn about the company’s experience with KanbanBOX: “To implement pull and kanban in enchainment on a large scale, an electronic kanban solution was needed to ensure efficiency and transparency of transactions. About future developments, in March 2017 we plan to connect the first customer to the KanbanBOX software”.
As the data collected in December 2016 shows, after about three years we have 3,833 kanban cycles in total, 793 kanban components purchased from external suppliers, and an average of 2,500 daily kanban releases. In all, between 20% and 70% of production hours take place under kanban management, in a variable way depending on the plant.
More stable and constant inventory levels, stock-outs reduced to a minimum
The benefits of having a pull management system and using software to manage kanban were:
- more stable and easy-to-control stock levels
- reduction in planning and management times
- minimization of stock-outs.
As a result, those who plan the production and flow of materials can focus on handling possible exceptions in terms of demand or production capacity.
The electronic kanban in practice
The internal material flow is managed using a pull system. Materials are divided into predefined quantity groups and organized into standard containers, each of which is applied a kanban card. The production cells are regularly replenished with the material grouped in containers, thanks to the regular service of an internal train. In this way, it was possible to minimize set-up times and stock-outs in production.
With KanbanBOX and a one-way material flow, we are able to accurately track the flow of materials in case of quality problems. This allows us to save time and costs in case of any recalls or investigations.
A positive experience for suppliers
Implementing KanbanBOX with suppliers was simple and proved to be a generally positive experience: the web software received positive feedback from them both regarding its visual qualities and the ease of reading Ensto’s inventory levels.
Currently, only a few carefully selected suppliers (23 in total) are connected to the system because, by company policy, “the supplier must act at high levels of quality and punctuality before receiving the ”privilege” of being part of the kanban system”. We can say that you have to work at high levels to be a pull supplier or KanbanBOX of Ensto. And, in turn, KanbanBOX is a great tool that makes it possible to work at even higher levels than before!
The positive effects of the e-kanban: more precision, less maintenance, fewer reminders
The increase in delivery accuracy can be defined in numerical terms. According to Lasse Lehtinen, in Ensto the products of production processes managed in pull (with e-kanban) achieved 3.3% better punctuality performance than products delivered by non-pull processes. “And this is a huge difference, especially considering that in general, we were already operating at a high level of punctuality of delivery!”.
The system requires little maintenance, and although the manual kanban system was on such a small scale that a direct comparison was not possible, Lasse confirms that the time required for kanban maintenance has decreased. As for reminders, in general, there has been a reduction in the need for reminders both by e-mail and telephone, which is found in all 23 suppliers connected to the KanbanBOX system.
It’s the best software I’ve used of its kind. It helps to manage the flow of materials, but most of all I like the development possibilities that the software provides. We can do things fast. And this for me was a pleasant surprise.
Easy and fast implementation along the supply chain
Introducing the software into the company was quick and easy. According to our interviewee, “Just register and start using the software. It’s simple. In my experience it is rare to find a system that has good visual characteristics, and is both user-friendly and easy to implement. The barcode functions make use fast and eliminate the possibility of typing errors”.
The relatively young age of the software also gave Ensto a customization advantage, designing adjustments to the service and including some modifications that met the specific needs of the company.
The set-up of the software is very fast, more than the start-up of a business ERP, and improves as the company becomes more experienced in using the program. With suppliers, when all the necessary data is prepared before implementation, the procedure does not require more than half a day of work: “We can add even more than 500 items in an hour. It’s a fast process”.
A software that is visibly effective and easy to use that can be developped and adapted
The greatest benefits of web software are the high visual effectiveness and simplicity of use, as well as easy implementation. In addition, Ensto appreciates the fact that the software can be customized and developed according to the specific needs of the company, thanks to the advice of Sintesia: “They support us in the development of the software. We receive quick and useful answers from Sintesia, in particular from Matteo with whom we have a consultancy relationship. This development of the software, I believe, benefits all the big customers who need similar measures” says Lasse.