Professional Documents
Culture Documents
Reading, PA 19605-2961
Kanban Agreement
1. PURPOSE
2. PROCESS
When Fidelity calls/faxes a release for one Kanban quantity of a part number in the Kanban
arrangement, Supplier agrees to ship the appropriate quantity within 1 working day.
Shipments are estimated to take 1 working day. If shipments will be late, Supplier must
call Fidelity within 48 hours, as well as expedite shipping at supplier’s expense.
3. PACKAGE IDENTIFICATION
We ask that each box or package be clearly marked with the word “KANBAN,” the Supplier
name, the Fidelity part number, the Fidelity purchase order number, and the quantity of
each part number in the box or package (note: if there are multiple boxes each box should
include the quantity in each box). Additionally, we ask that the packing list be attached to
the outside of the box only, any overdue shipments be clearly labeled “HOT” for immediate
identification, and any reference to previous shipment information or other markings be
removed or crossed off.
4. DEMAND SPIKES
Due to spikes in demand, we ask that Supplier have some flexibility in the quantity
available for shipment. Specifically, Supplier must maintain a spike cushion at all times.
The amount of the spike cushion will be predetermined between Fidelity and Supplier.
5. SUPPLIER PERFORMANCE
Part of ensuring the success of this process is monitoring the performance of all our
suppliers. Each supplier will be measured on product quality, accuracy (including quantity
shipped, proper labeling and correct part number), and delivery performance.
6. TERMINATION In the event that Fidelity Technologies Corporation terminates this agreement
for any reason other than performance, Fidelity Technologies Corporation agrees to purchase
any stock on hand, not to exceed the predetermined releases held by supplier, plus the spike
cushion.
Fidelity Technologies
Corporation Inc. Kanban
Agreement (Cont.)
To avoid conflict between the provisions of the Kanban agreement and the Terms and
Conditions of Fidelity Technologies Corporation purchase orders, the Kanban agreement,
as outlined herein, shall prevail.
________________________________ _________________________________________
Title Title
JIT Lead Time – Length of time for Fidelity to receive a kanban quantity when
releasing it from an existing blanket purchase order. This time period includes
supplier order processing time as well as shipment time (days in transit). JIT lead
time is typically 1-3 days.
Replenishment Period – Length of time for supplier to restock one kanban
quantity.
Kanban Quantity – Predetermined release quantity based on usage, lead time
and safety stock.