The Company
Premier Pet Products manufactures and distributes pet products directly to 10,000 independent pet supply retailers, veterinarians and dog trainers, as well as to big-box pet specialty chains. Premier is the sole manufacturer of a leading head collar, The Gentle Leader®, worn by more than one million dogs. From its inception in 1989 with a $5,000 loan backed by the U.S. Small Business Administration, the company has grown to 114 employees and annual sales nearing $16 million.

The Situation
About the time that Premier had moved manufacturing, warehousing, order picking, and order fulfillment operations into a new facility, John Connell, Sr., VP of Manufacturing for Premier, had completed a tour of a manufacturer of similar products where he saw first-hand the impact of Lean techniques. Premier contacted GENEDGE ALLIANCE to assist in the implementation of a Kanban system designed to work with incoming material and finished goods inventory.

The Response
Kanban is a visual, customer-driven pull material replenishment system that matches lot sizes with capacity (not economic order quantity theory) while interfacing with planning systems and optimizing point-of-use material storage. GENEDGE ALLIANCE Project Manager, Tom Zbell, assisted with the creation of Kanban cards that Premier refers to as hangtags. The hangtags are color coded to indicate product width and include such product information as product description, quantity needed, a Face number, a UPC (Universal Product Code) number, and an SKU (Stock Keeping Unit) number. By reading the Face number, the stock clerk knows how many facings (places) are reserved by each SKU and can quickly identify a potentially missing Kanban card—a very important function of this visual system.

The Results
Before the Kanban system was used at Premier, inaccurate production proposals created out-of-stocks. After the implementation, out-of-stocks declined to zero allowing Order Fulfillment to complete more orders on their first attempt. Premier's fulfillment rate increased to 98% within 24 hours of the order date; previously monthly fulfillment had been bouncing between 70-80%. The Kanban system also eliminated overstocking resulting in a reduction of inventory carrying cost.

Connell has seen the system restore the confidence of upper management in the company's ability to manage the inventory, respond rapidly to order increases, and contribute to the cash conservation of operations through inventory control. Morale of the production staff improved when the smaller batch sizes reduced lead time. "It feels like the work is going faster," employees have stated. The most impressive result of small batch sizes was evident when work-in-process (WIP) decreased by 62%, providing a savings in WIP carrying costs.

Management's Comments
According to Connell, "The Kanban System of inventory control and production planning has provided a simplistic visual system that has allowed Premier Pet Products to manage it's inventory and plan production to meet the demands of a growing company in an even more demanding market. I have worked with several Manufacturing Resource Planning (MRP) systems and none of them have given me the day-in day-out confidence I have in the Kanban System we've implemented with the assistance of GENEDGE ALLIANCE."

View their site! http://www.premier.com/