What is seiban? "Seiban allows you to assign a number at the time you launch the very top level of an assembly order. Everything underneath it, all work orders, purchase orders, bills of material, inventory reservations — all the order's 'children' — get launched with that one number. You don't have to put any intelligence into the work order or the part number — that's a common work around — because they inherit the same seiban number as the parent has," explains James Gorham, vice president of Glovia International. "Now I can type in my seiban number and see that product structure from top to bottom; all the work orders, purchase orders, inventory, everything. I can, with rifle-like precision, move a purchase order or work order if I want, and see the impact up and down that product structure of any change that I make."

Why is there seiban? "The Japanese were looking for a way of having the concept of MRP (material requirements planning), the idea of a gross per net calculation for a bill of material — that's a very sound concept — but with additional benefits," claims Gorham. "One of the flaws of MRP is that you lose visibility. If you go down to the third or fourth level in the bill of material, and suddenly MRP is committing inventory, you don't know what the ultimate parent is: who it is, what it's for, when it's due, things like that."

He continues his explanation of how seiban came to be. "On the shop floor, you often want to know what is the end effect of delaying a work order or purchase order by three days, or taking resources from another order to make a new one," Gorham says. "MRP can't really help because it aggregates everything on the same due date. So the seiban concept was invented."

Gorham is, of course, somewhat biased on the subject. Glovia, a joint venture of Fujitsu and MDIS, is taking the seiban idea to market in a software program called Seiban Workbench. However, he's not the only one who sees value in the concept. David Caruso, an analyst with AMR Research, indicates that Gorham and Glovia might be on to something. "In a lot of ways, Glovia is on a bit of a missionary sell with the whole seiban thing," says Caruso. "In a number of industries, particularly those that tend to do things specifically to customer order — heavy equipment, telecom projects, complex system arrangements — being able to link all that activity up and down a bill of material for a specific custom order using the seiban number is a pretty powerful tool. In my view, it gets to the critical path of what's either helping or preventing a customer from getting his shipment on time and complete. The idea of linking across multiple levels of bill is a pretty unique feature. But frankly, from an AMR standpoint, we don't see a lot of folks knocking on the door looking for that just yet. I think it's one of those things where people see what it can do, they say, 'Oh that's great.'

"In fact," Caruso continues, "there have been iterations of this type of capability before but primarily in the aerospace and defense world — what they call top- and end-level pegging. The difference was it just pegged the orders together; it didn't really give you a sense of the critical path nature that seiban is really focused on. With Glovia's project resource planning capability, you can look across that seiban grouping and it will show you the ones that have become the critical path in accomplishing that customer's shipment at the right time."

Other benefits, according to Gorham, are that you can have purchase orders from suppliers directly linked into the production schedule of a particular manufactured lot. In effect, it takes Just-in-Time another step in capability. In fact, he says, it proves the Just-in-Time philosophy. "You're not making too much inventory too quick, or too little inventory too slowly. You make exactly the right thing at exactly the right time."

Another benefit of seiban, Gorham claims, is that you can do a lot more cost tracking. "Japanese companies did a lot of good work with quality management, allowing us to develop TQM (total quality management) concepts and diminish rework requirements. Now seiban allows you to track the actual costs of every single purchase or work order of a product you're making. You may still be doing standard costing or average costing in your bookkeeping, but your shop floor manager can now tell you the manufactured cost, including any overheads for heat, light, whatever, of each individual manufactured lot that went through the shop."

But is this a marketing tool or a manufacturing tool? Has Glovia hit on a new buzzword or just made one up? For the word, seiban, literal translation out of context is difficult. Some say it means "manufacturing number" while others use "work number." Either way, the important part is "ban" or number. The idea is to apply a number at the earliest launch of the order and use that common number throughout the acquisition, production, costing, shipping and billing cycles. Caruso sees this as a positive approach in managing suppliers. "The seiban number is actually a secondary control number that gets tagged to purchase orders and requests for purchase orders as well. Picture it this way: You have good relationship with a supplier, and they know they're delivering a certain shipment that has several seiban numbers. For some reason, they have a failure. They can call up the company and tell them that specific shipments, based on the seiban numbers, are in trouble. Or somebody calls up and says. 'I've got a critical path item, I need two units, send me this one and tag it with a specific seiban number.' Even though I'm not getting the full shipment, I know what my critical path item is. So you could certainly use this concept beyond the four walls of the factory, out into your supply chain. That's where Glovia has done a good job; rather than just being a function of one planning program, they've really extended it into other areas as well."

Another piece that is being put into the implementation of seiban is the ability to do engineering change by a seiban number. Many companies are moving into engineer-to-order manufacturing with the capability to build products at the time the customer places the order. That's a great philosophy; but if you have a product that's highly engineered with a lot of technical capabilities — a computer or other high-tech equipment — you need to be able to utilize your engineering changes in conjunction with the ability to manufacture optimally. That can be stressful for a company. Again, seiban allows you enough visibility to introduce an engineering change based on that seiban number. "I don't want to change the revision number, I don't want to change the part number," comments Gorham. "This is not a form, fit or function issue; this is just an engineering change, and I want to start it with a particular manufacturing lot."

The aerospace industry is the epitome when it comes to complex projects. In many ways, seiban is an extension of the government contract method of issuing a build number for an aircraft and using that to follow all production, subcontracting and material acquisition and usage for the airframe. The tail number or Navy Bureau Number plays a similar function. Gorham admits that although they have some aerospace companies using seiban, that's not a target market for Glovia. "Seiban allows you to do 'hard-pegging' and 'soft-pegging,'" he explains, using the aerospace and defense (A&D;) industry terms. "Sometimes I want to buy material in bulk, but at the end of the day have it feed specific manufactured orders. This would be good for TV or electronics manufacturers, people with the pressures of commercial manufacturing. That's in contrast to those who come from the A&D; perspective, where it is more focused on government audit responsibility and where you need to control material issues from an audit point of view. You need to prove you issued this nut and bolt to this order. That is almost a byproduct of seiban. It wasn't why it was invented, but it may actually give you some of that capability. If so, that's purely by accident more than design."

As long as we are on the subject of buzzwords, how about "mass customization?" Gorham lights up when he hears that term. "To come down to a manufacturing lot size of one is the ultimate dream. If a customer orders 400 television sets, make each one of those television sets as an individual unit. It may have different engineering configurations, it may have different costs, it may be made in different manufacturing plants. In other words, how I make the product is now completely invisible to how I've sold the product, but it's the same product.

"In the old days, with MRP you had to do that through fancy work around the part number or the order number and put some artificial intelligence in there to keep it all together," Gorham recalls. "If I could tell how much each individual TV set cost to make, as well as the quality of each TV set, how the engineering changes were done, I'll be in a pretty powerful position the next time the customer orders one or 400 TV sets. With seiban, I can feed that information into my quoting, so I know it might benefit me to give him a discount to order a certain type of set because it's easier for me to make it."

Caruso sees an added benefit of seiban by saying, "I see the whole seiban thing as an additive on the planning side. Even though I might be making a specific component, and know I'm building it to seiban number 12345 — which attaches to that customer's delivery — I still have all the same requirements: lot tracing, tracking, serial number tracking as well. I know that's still in place in the system. Think of it as a control entity that lives for the planning world as opposed to identifying specific parts."

Tom Inglesby is publisher and editor of Evolving Enterprise.

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