Original Date: 10/20/1997
Revision Date: 01/18/2007
Information : Standard Parts Management
Northrop Grumman initiated a Standard Parts Management program to address its parts shortages and inventory issues. This Standard Parts Management program consists of two phases: the ReOrder Point Analysis Summary (ROPAS) program and the Just in Time (JIT) Integrated Supplier program.
The first phase, the ROPAS program, was a significant effort to improve reordering data and eliminate parts shortage problems. As a dynamic system, ROPAS analyzes and recalculates reorder data on a weekly basis instead of the previous once a year method. The data is now more accurate and is prioritized by IPT personnel according to production requirements. A significant benefit of ROPAS was the reduction of the parts management personnel from ten to two.
In the second phase, Northrop Grumman implemented the JIT Integrated Supplier program. Here, the company teamed with a quality supplier to eliminate non-value-added, in-house tasks and further reduce inventory costs and parts. The supplier manages the inventory, fills the bins on the production lines, and conducts scheduled reviews of the parts inventory. The parts’ bins are replenished by the supplier as needed. Northrop Grumman achieved some indirect labor savings by automating these functions with the supplier. The current supplier, Tristar, has a 99% performance rate on bin replenishment. Northrop Grumman maintains a valuable one-month supply of parts on hand and purchases 12 to 18 months of parts as needed.
Through its Standard Parts Management program, Northrop Grumman achieved its overall objectives to reduce/eliminate parts shortages and reduce overall parts inventory. In addition, the company strengthened the team effort between itself and its supplier by using a non-typical JIT method.
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