IMPLEMENTATION OF ORDERING KANBAN FOR SUPPLIER AT COMPANY PROREKA (M) SDN BHD LIM QIAN BING Thesis submitted in partial fulfillment of the requirements for the award of the degree of Bachelor of Manufacturing Engineering Faculty of Manufacturing Engineering UNIVERSITI MALAYSIA PAHANG JUNE 2012
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IMPLEMENTATION OF ORDERING KANBAN FOR SUPPLIER AT
COMPANY PROREKA (M) SDN BHD
LIM QIAN BING
Thesis submitted in partial fulfillment of the requirements
for the award of the degree of
Bachelor of Manufacturing Engineering
Faculty of Manufacturing Engineering
UNIVERSITI MALAYSIA PAHANG
JUNE 2012
vii
ABSTRACT
Lean Production System is a manufacturing management in which time can be
shortened for customer order and delivery time; and service parts order can be
increased through the elimination of all forms of waste. The main component for
“Just-In-Time”, one of the pillars of Lean production System is "Pull System" or
Kanban System. Kanban system is a pull system of inventory control that typically
uses cards or bins to signal when materials or work-in-process should be moved
forward; stock inventory is moved through production stages only when it is needed,
and minimizing stock inventories. This is an important revolution in the concept of
the Lean Production System. The objective of this research is to simulate Kanban
policies for three major materials in warehouse of Proreka (M) Sdn Bhd which is a
Malaysia Tier-1 vendor and manufacturer of automotive components. Another
objective is to investigate the stock control efficiencies between Material
Requirement Planning and Kanban System. The main target of this research is to
implement small lot ordering by using Kanban policy to reduce the stock inventories.
A simulation model of delivery frequency was developed for the replenishment
process of the selected stocks to analyse the delivery frequency from supplier after
Kanban implementation. The average stock holding before and after Kanban
implementation was analysed to compare the stock control effectiveness between
Material Requirement Planning and Kanban System. Interview session and survey by
questionnaire were conducted to analyse the performance of Kanban System in point
of view of employees. The result obtained indicated that Kanban policy can reduce
stock inventories and improve the efficiency in stock control. Other significant
improvements with the implementation of Kanban are such as physical condition of
the manufacturing environment, production efficiency, and motivation of workers.
viii
ABSTRAK
Sistem Pengeluaran Berpada adalah pengurusan pembuatan yang membolehkan
masa untuk pesanan pelanggan dan masa penghantaran dipendekkan, dan
perkhidmatan untuk komponen dapat dipertingkatkan melalui penghapusan semua
bentuk sisa. Komponen utama bagi “Just-In-Time”, salah satu tunggak Sistem
pengeluaran Berpada adalah “Sistem Tarik” atau Sistem Kanban. Sistem Kanban
adalah sistem tarik kawalan inventori yang biasanya menggunakan kad atau bekas
bertutup untuk memberi isyarat apabila stok atau kerja dalam proses harus bergerak
ke hadapan; stok inventori bergerak melalui peringkat pengeluaran hanya apabila ia
diperlukan, dan meminimumkan stok inventori. Ini adalah revolusi penting dalam
konsep Sistem Pengeluaran Berpada. Objektif kajian ini adalah untuk
mensimulasikan polisi Kanban pada tiga stok utama dalam gudang Proreka (M) Sdn
Bhd yang merupakan vendor dan pengilang komponen automotif tahap satu dalam
negara Malaysia. Objektif lain adalah untuk menyiasat kecekapan kawalan stok
antara Perancangan Keperluan Bahan dan Sistem Kanban. Sasaran utama kajian ini
adalah untuk melaksanakan pesanan lot yang kecil dengan menggunakan polisi
Kanban untuk mengurangkan inventori stok. Model simulasi bagi kekerapan
penghantaran untuk proses pengisian semula bagi stok yang dipilih dihasilkan untuk
menganalisis frekuensi penghantaran daripada pembekal selepas perlaksanaan
Kanban. Purata pegangan stok sebelum dan selepas perlaksanaan Kanban dianalisis
untuk membandingkan keberkesanan kawalan stok antara Perancangan Keperluan
Bahan dan Sistem Kanban. Sesi temuramah dan kaji selidik dengan pengunaan
borang soal selidik dijalankan untuk menganalisis prestasi Sistem Kanban dari
persepsi pekerja. Hasil kajian yang diperoleh menunjukkan bahawa dasar Kanban
boleh mengurangkan stok inventori dan meningkatkan kecekapan dalam kawalan
stok. Peningkatan lain yang ketara dengan perlaksanaan Kanban adalah seperti
keadaan fizikal persekitaran pembuatan, kecekapan pengeluaran, dan motivasi
pekerja.
ix
TABLE OF CONTENTS
Page
SUPERVISORS’ DECLARATION iii
STUDENT DECLARATION iv
DEDICATION v
ACKNOWLEDGEMENT vi
ABSTRACT vii
ABSTRAK viii
TABLE OF CONTENTS ix
LIST OF TABLES xii
LIST OF FIGURES xiii
LIST OF ABBREVIATIONS xv
CHAPTER 1 INTRODUCTION
1.1 Introduction 1
1.2 Problem Statement 2
1.3 Objectives of the Research 3
1.4 Hypethesis of the Research 4
1.5 Scope of Project 4
CHAPTER 2 LITERATURE REVIEW
2.1 Introduction 6
2.2 History of Lean Production 6
2.3 Lean Production System (LPS) 9
2.4 Just-In-Time (JIT) 12
2.4.1 Kanban System 15
2.5 Jidoka 19
2.6 Other Methods in LPS 23
2.6.1 Standard Operating Procedure (SOP) 23
2.6.2 Continuous Improvement (Kaizen) 24
2.6.3 Cellular Manufacturing 24
x
2.7 Success Factors of LPS 26
2.7.1 Implementation of LPS Leadership 26
2.7.2 Requirements of Culture 27
2.8 Barriers of LPS 28
2.9 Conclusion 30
CHAPTER 3 METHODOLOGY
3.1 Introduction 31
3.2 Design of Research Procedures 31
3.2.1 Flow Chart 33
3.3 Research Location 34
3.3.1 Corporate Information 34
3.3.2 Research and Development 34
3.3.3 OEM Parts and Components 35
3.4 Model Selection 36
3.4.1 ABC Classification 36
3.5 Research Instruments 37
3.5.1 Packaging and Storage 37
3.5.2 Kanban Card Design 37
3.5.3 Questionnaire and Interview Session 38
3.6 Data Collection and Analysis Methods 38
3.6.1 Delivery Frequency Simulation 38
3.6.2 Stock Holding Calculation 39
3.7 Project Report Writing 39
3.8 Summary 39
CHAPTER 4 RESULTS AND DISCUSSION
4.1 Introduction 40
4.2 Material Storage before Kanban Implementation 40
4.3 Part Selection 41
xi
4.4 Kanban Sizing 42
4.4.1 Stock Holding Calculation 42
4.4.2 Kanban Quantity and Number of Kanban 44
4.5 Delivery Simulation 45
4.5.1 Material Number: 1036/2HSUV1-7C52 45
4.5.2 Material Number: C218V15-Grey2236 48
4.5.3 Material Number: 90137-TCP-PP42136 51
4.5.4 Reponds from Suppliers 54
4.6 In-house Preparation 54
4.6.1 Kanban Card Design 54
4.6.2 Kanban Board Design 55
4.6.3 Standard Pull Schedule 56
4.6.4 Storage Method 57
4.7 Achievements 58
4.7.1 Stock Holding Day 58
4.7.2 Time for Issuing Out Material 65
4.7.3 Storage Space 66
4.8 Survey Analysis 68
4.8.1 Questionnaire 68
4.8.2 Interview Session 71
CHAPTER 5 CONCLUSION AND RECOMMENDATIONS
5.1 Introduction 73
5.2 Conclusion 73
5.3 Problems Encountered 74
5.4 Countermeasure 74
5.5 Recommendations 75
REFERENCES 76
APPENDICES
I Survey Questionnaire On Performance Of Lean (Kanban) 80
II Value Stream Mapping Of Proreka Before Kanban Implentation 82
III Value Stream Mapping Of Proreka After Kanban Implentation 83
IV Gantt Chart Of Kanban Implementation 84
xii
LIST OF TABLES
Table No. Title Page
2.1 Barriers of LPS 29
4.1 Stock Holding Calculation for Material Number: 43
1036/2HSUV1-7C52
4.2 Stock Holding Calculation for Material Number: 43
C218V15-Grey2236
4.3 Stock Holding Calculation for Material Number: 44
90137-TCP-PP42136
4.4 Material Quantity per Kanban and Number of Kanban Cards 44
4.5 Feb 2012 Stock Holding and Delivery Simulation 45
(1036/2HSUV1-7C52)
4.6 Mar 2012 Stock Holding and Delivery Simulation 46
(1036/2HSUV1-7C52)
4.7 Feb 2012 Stock Holding and Delivery Simulation 48
(C218V15-Grey2236)
4.8 Mar 2012 Stock Holding and Delivery Simulation 49
(C218V15-Grey2236)
4.9 Feb 2012 Stock Holding and Delivery Simulation 51
(90137-TCP-PP42136)
4.10 Mar 2012 Stock Holding and Delivery Simulation 52
(90137-TCP-PP42136)
4.11 Standard Pull Schedule for Material Kanban Ordering 56
4.12 Apr-May 2012 Kanban Ordering Stock Holding and Delivery 59
(1036/2HSUV1-7C52)
4.13 Apr-May 2012 Kanban Ordering Stock Holding and Delivery 61
(C218V15-Grey2236)
4.14 Apr-May 2012 Kanban Ordering Stock Holding and Delivery 63
(90137-TCP-PP421)
xiii
LIST OF FIGURES
Figure No. Title Page
2.1 Production System Developed by Toyota Motor Corporation 8
2.2 Push System 14
2.3 Pull System 14
2.4 Kanban System 19
2.5 Andon System in the Making 20
2.6 Visual Control in the Workplace 22
2.7 Traditional and U-shape Work Cell 25
3.1 Research Flow Chart 33
4.1 Material Storage before Kanban Implementation 41
4.2 ABC Classification for Average Monthly Material Usage 42
4.3 Feb 2012 Simulation Stock Holding Graph 47
(1036/2HSUV1-7C52)
4.4 Mar 2012 Simulation Stock Holding Graph 47
(1036/2HSUV1-7C52)
4.5 Feb 2012 Simulation Stock Holding Graph 50
(C218V15-Grey2236)
4.6 Mar 2012 Simulation Stock Holding Graph 50
(C218V15-Grey2236)
4.7 Feb 2012 Simulation Stock Holding Graph 53
(90137-TCP-PP42136)
4.8 Mar 2012 Simulation Stock Holding Graph 53
(90137-TCP-PP42136)
4.9 In-house Kanban Card for Material 1036/2HSUV1-7C52 55
4.10 Kanban Board for Selected Material 56
4.11 FIFO Tag Implementation 57
xiv
4.12 Allocate and Standardize Material Storage Location 58