Gateway Install VMI Solution at G4S Technology

Background:

Since its inception in 2000 Gateway has been a supply partner to G4S at its UK manufacturing headquarters in Gloucestershire, UK. In the period since then Gateway has supplied millions of parts across hundreds of products to support G4S at its UK operation in Tewksbury, which manufactures the company’s fingerprint, swipe-card and premises access equipment.

Gateway Kanban

The Challenge

In June 2011 the Global Procurement Manager at G4S approached Gateway to help design and implement a supply chain solution to 'take control of the electronic supply chain, release costs of ownership but maintain security and integrity of supply'. At that time G4S used over 2000 different lines of electronic components from over 250 manufacturers, procured from over 160 different vendors; holding disproportionate levels of inventory on category C items and below. The challenge was to help G4S vendor reduce, optimise the bill-of-material, rationalise the vendor and manufacturer base, drive for cost down efficiencies, improve stock turn ratios, reduce working inventories and help reduce legacy stock liabilities.

The Solution

With its wealth of experience in reducing cost of ownership Gateway recommended a Point of Use Replenishment solution using the Kanban Supply concept, operating a two bin Vendor Managed Inventory programme with product shipped direct-to-line.

On both PTH and SMD parts storage locations were installed close to the production stations. Supply to these locations would be made by Gateway staff during the bi-weekly scan and replenishment visits.

Product bins were labelled with 2-dimensional barcode identifiers to enable error-free reading by the handheld scanning equipment used by Gateway. Gateway has written and developed its own software solutions to use in these handhelds to remove the risk of human error in both the scanning and replenishment phase of the supply cycle.

Mirror stock locations would then be maintained on the Gateway premises for each part within the supply programme; over 600 in phase one of the installation. These were held in a dedicated G4S zone in Gateway warehouse in Nantwich, Cheshire. The twice weekly inspection and replenishment cycle is then performed by Gateway VMI staff, who top up the empty Kanban bin and then scan new 'empties' before transmitting the call-off file electronically back to the Gateway system to begin the picking and packing routine for the next replenishment visit.

Prior to each replenishment visit Gateway would send the supply manifest to G4S electronically to enable it to be uploaded automatically into the G4S stock management system and enable G4S to initiate a self-billing cycle. This could then benefit G4S by avoiding the rather time consuming invoice entry routine within its bought ledger department.

All products transported to G4S would utilise the Gateway Green Box solution introduced a few years earlier to minimise the amount of packaging and waste material produced during the supply cycle. As part of an initiative with other Gateway customers' heavy-duty re-usable containers were supplied for which Gateway then arranged collection once the containers had been emptied. At G4S these containers are removed from site as part of the procedure.

Gateway maintain pre-agreed levels of buffer stock adjusted in line with demand levels to ensure a dynamic but continuous supply of products is maintained, and protects those inventories by ensuring a pipeline of supply is maintained beyond the lead-time of the component; and if for whatever reason shortages do occur then Gateway will use its extensive network of accredited vendors to mitigate against the risk of line-stops.

As part of the initial installation Gateway also integrated into the replenishment programme the ability to 'burn-off' G4S overstock on items within the Kanban programme enabling G4S to reduce its storage space on its premises.





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