Consultant Touts Katzkin's Procurement Model

TRAVERSE CITY, MI – John Waraniak is one of the oft-seen utility players at the annual Management Briefing Seminars here, and he sometimes brings some “out there” concepts to the table, says the Center for Automotive Research's Brett Smith, assistant director-manufacturing, engineering and technology.

But at least one idea actually may be worth a follow-up by certain members of the supply chain.

Waraniak is an automotive consultant, who holds down the role of strategic director at TATA Consultancy Services.

He says his company has been looking at an aftermarket leather interior supplier, Katzkin Leather Co., which is notable for following the Dell Inc. procurement model of purchasing material on consignment and not taking delivery of goods until a customer orders a product that needs the material.

John Waraniak's fascination with a California-based aftermarket interior supplier may be worth a second look.

The 22-year-old company has about 450 employees, Waraniak says, and it has outfitted some 700,000 vehicles for buyers looking to distribute personal flavor inside their vehicle.

Waraniak says the company works on a lean philosophy that allows it to supply one of 1,500 custom interiors designed to fit nearly any vehicle in as little as two to three days, “if you'd like.”

Katzkin, based in California, moves each interior through devoted production cells of workers who follow the unit from its genesis to completion. Waraniak calls this work model “unprecedented.”

The supplier's “1-piece flow” system increases throughput 60%, he says, and results in a defect rate of less than 250 problems per million units.

Waraniak says Katzkin's proven quick-to-market model works well in meeting the customization demands of younger buyers, who outfit everything from MP3 players to automobiles with signature items available from original manufacturers and aftermarket companies.

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