Kanban (1)

KANBAN

Kanban DefinitionWhat is Kanban?

• Card system that controls production & inventory

• Visual “pull” system vs. a “black box” push system (ie - MRP)

WHAT IS KANBAN?• DEVELOPED AT TOYOTA 1950S TO MANAGE LINE MATERIAL FLOWS. • KANBAN ( KAN=CARD, BAN= SIGNAL )• SIMPLE MOVEMENT SYSTEM

– “CARDS” TO SIGNAL & COMMUNICATE REORDER INFORMATION– BOXES/CONTAINERS TO TAKE “LOTS” OF PARTS FROM ONE

WORK STATION TO ANOTHER (CLIENT-SERVER).• SERVER ONLY DELIVERS COMPONENTS TO CLIENT WORK STATION

AS & WHEN NEEDED (CALLED/PULLED). • MINIMISE STORAGE IN THE PRODUCTION AREA.• WORKSTATIONS ONLY PRODUCE/DELIVER COMPONENTS WHEN

CALLED (THEY RECEIVE CARD + EMPTY CONTAINER). • THE WORK-STATION PRODUCES ENOUGH TO FILL THE CONTAINER• KANBAN = AN AUTHORIZATION TO PRODUCE MORE INVENTORY• WE THUS LIMIT THE AMOUNT OF INVENTORY IN PROCESS.

WHAT IS KANBAN• TECHNIQUE FOR WORK AND INVENTORY RELEASE • MAJOR COMPONENT OF JIT AND LEAN MFG• DEVELOPED BY TOYOTA TO MANAGE MATERIAL FLOW IN

ASSEMBLY LINE• KANBAN STANDS FOR KAN – CARD BAN - SIGNAL• ESSENCE OF KANBAN IS SUPPLIER , WAREHOUSE ,

MANUFACTURER SHOULD DELIVER COMPONENTS ONLY WHEN THEY ARE NEEDED SO THAT THERE IS NO EXCESS INVENTORY

• WITHIN SYSTEMS WORK STATIONS LOCATED ALONG PRODUCTION LINES AND PRODUCE ONLY THE DESIRED COMPONENTS WHEN THEY RECEIVE A CARD AND AN EMPTY CONTAINER WHICH INDICATES MORE PARTS ARE NEEDED IN PRODUCTION

WHAT IS KANBAN • TWO BIN SYSTEM WHERE REORDER CARD PLACED

AT BOTTOM OF FIRST BIN• WHEN BIN IS EMPTY A THIRD PARTY SUPPLIER OR

PREVIOUS WKSTN USE THE REORDER CARD TO REPLENISH BIN

• SECOND BIN IS EMPLOYED SUCH THAT WHEN FIRST BIN IS REPLENISHED SECOND BIN IS READY FOR REPLENISHMENT

• NO REPLENISHMENT WOULD TAKE PLACE WITHOUT REORDER CARD ENSURING THAT OVERSTOCKING DOES NOT TAKE PLACE

WHAT IS KANBAN

• INCASE OF INTERRUPTION MEASURES ARE TAKEN SO THAT EACH WKSTN WILL ONLY PRODUCE ENOUGH COMPONENTS TO FILL CONTAINER

• KANBAN LIMITS AMOUNT OF INVENTORY IN THE PROCESS BY ACTING AS A AUTHORIZATION TO PRODUCE MORE INVENTORY

WHAT IS KANBAN

• AS KANBAN IS A CHAIN PROCESS IN WHICH ORDERS FLOW FROM ONE PROCESS TO ANOTHER, PRODUCTION OF COMPONENTSARE PULLED THRU THE LINE

• IN JIT SYSTEMS COMPONENTS ARE NEEDED FOR FINAL ASSEMBLY ;THEY ARE PULLED IN SMALL BATCHES FROM THE SUPPLYING WORKSTATION

• KANBAN IS A CRITICAL COMPONENT OF JIT• EMPLOYED WITHIN PRODUCTION PULL SYSTEM

TO MAINTAIN PROCESS SUPPLY

WHAT IS KANBAN• IN CASE OF LINE INTERUPTION MEASURES TAKEN SO

THAT EACH WORK STATION ONLY PRODUCES ENOUGH COMPONENTS TO FILL CONTAINER AND THEN STOP

• KANBAN LIMITS ACCUMULATION OF INVENTORY IN WIP BY ACTING AS AN AUTHORIZATION TO PRODUCE MORE\

• KANBAN IS A CHAIN PROCESS IN WHICH ORDERS FLOW FROM ONE PROCESS TO ANOTHER

• PRODUCTION OR DELIVERY OF COMPONENTS PULLED THRU PRODUCTION LINE

• IN JIT SYSTEMS WHEN COMPONENTS/PARTS NEEDED FOR FINAL ASSEMBLY , THEY ARE PULLED IN SMALL BATCHES FROM SUPPLYING WORK CENTRES

WHAT IS KANBAN• KANBAN WORKS AUTOMATICALLY IN PULL SYSTEM (CUSTOMER

DRIVEN)• KANBAN SHOWS -

WHAT PARTS TO MFG -WHEN TO START MFG -HOW MUCH TO MFG

• EMPLOYED WITHIN A PRODUCTION PULL SYSTEM TO MAINTAIN PROCESS SUPPLY

• SYSTEM EMPLOYS SIGNALS TO LINK PROCESSES THAT ARE USED TO REPLENISH STOCKS BASED ON CUSTOMER USAGE

• SIZE OF KANBAN CONTAINER NO MORE THAN 10 OF DAILY DEMAND AND STANDARDIZED IN SIZE

• KANBAN SUITED FOR PRODUCTS WITH HIGH VOLUME SALES AND LOW VARIETY

WHAT IS KANBAN

• KANBAN AUTHORIZES OUTPUT FROM DOWNSTREAM OPERATIONS BASED ON PHYSICAL CONSUMPTION

• CAN BE A CARD , FLAG, SIGNAL • USED WITH FIXED SIZED CONTAINERS • KANBAN QUANTITIES ARE FUNCTION OF LEAD

TIMES AND CONSUMPTION RATES OF ITEM BEING REPLENISHED ( MIN QTY = (LEAD TIME DEMAND + SAFETY STOCK)/CONTAINER QTY)

What is the Kanban System?A Card System is used to monitor work-in-process

• A withdrawal Kanban• A production Kanban• A vendor Kanban

Kanban System

6-12

Kanban Cards

6-13

• Kanbans are All Around Us• Kanbans are Inventory• Inventory Is waste (costly!)• Goal Is To Minimize Inventory In Kanbans

And Eliminate If Possible

Basic Kanban (Pull signal)Basic Kanban (Pull signal)

Ultimate Goal of Kanban is to not Ultimate Goal of Kanban is to not have a KANBAN ! have a KANBAN !

One-Piece Flow is the Answer !One-Piece Flow is the Answer !

The Kanban ProcessWithdrawal

Store

LCD ScreenWithdrawal

Lot with P-Kanban

ProductionOrdering Post

(6) Signal

LCD Assembly

Remove(4) P-Kanban

Attach

(5) AttachW-Kanban

(1) Remove W-Kanban Attach

Withdrawal Post

(2), (3)

(7)

Final Assembly

(1)

Kanban Production Control

• At the core of JIT manufacturing at Toyota is Kanban, an amazingly simple system of planning and controlling production

• Kanban, in Japanese, means card or marquee• Kanban is the means of signaling to the

upstream workstation that the downstream workstation is ready for the upstream workstation to produce another batch of parts

Kanban Systems

• Logistical ropes connect the various work stations and drive their JIT systems.

• Set up MPS which is determined by market demand.

• The projected daily demand for each product is the amount that is scheduled to be produced for that day.

Kanban Systems, cont.

• The smoothed production schedule is then set for a fixed period of time-normally one month.

• Then final assembly is scheduled in order to meet the daily production requirements.

Kanban Systems

Can use different methods to trigger replenishment activity

– kanban cards are the most common

– kanban containers are frequently used

– bar coding of cards / containers helps when automating kanban systems

Kanban Systems

Not suited for all inventory items – look for

– items with frequent usage

– items with short lead times

– items with “willing” suppliers

21

KANBAN Prodn Control

Kanban: • Card or other device that communicates

demand for work or materials from the preceding station

• Kanban is the Japanese word meaning “signal” or “visible record” card

• Paperless production control system• Authority to pull, or produce from a

downstream process

22

Kanban is not for everybody

• The conditions necessary for Kanban to work well are:– “Smooth” production involving a stable product

mix– Short setups– Proper machine layout– Standardization of jobs– Improvement activities– Autonomation (autonomous defect control)

24

Kanban Production Control System• Kanban card indicates standard quantity of

production

• Derived from two-bin inventory system

• Kanban maintains discipline of pull production

• Production kanban authorizes production

• Withdrawal kanban authorizes movement of goods

25

A Sample Kanban

26

The Origin of Kanban

a) Two-bin inventory system b) Kanban inventory system

Reorder Reorder cardcard

Bin 1Bin 1

Bin 2Bin 2

Q - R

KanbanKanban

RR

QQ = order quantity = order quantity

RR = reorder point - demand during lead time = reorder point - demand during lead time

• No Cards– Visual (Tape On Floor)– Two-Bin or Bin Systems– Supplier Containers– Painted floors, i.e. squares, circles

• Card Systems– Electronic Kanbans - Fax or Emails– Warehouse Or Parts Racks– Kanban Boards – Magnetic or Cards– Containers– Flow Thru Racks– Supplier Boxes

Kanban Options

Categories of Kanban

Instruction

Withdrawal

Kanban

Production Kanban (non lot production)

Triangle Kanban (for lot production)

Interprocess Kanban

Supplier Kanban

© 2007 Pearson Education

The Single-Card Kanban System• Kanban means “card” or “visible record” in Japanese & refers

to cards used to control the flow of production through a factory.

• General Operating Rules:1. Each container must have a card.2. The assembly line always withdraws materials from fabrication

(pull system). 3. Containers of parts must never be removed from a storage area without a

kanban being posted on the receiving post.4. The containers should always contain the same number of good parts. The

use of nonstandard containers or irregularly filled containers disrupts the production flow of the assembly line.

5. Only nondefective parts should be passed along. 6. Total production should not exceed the total amount authorized on the

kanbans in the system.

Two card Kanban System

• Toyota, which uses a dual-card kanban system, has its own inbound and outbound material storage areas. *inbound stock area- holds material that is ready for processing at the work station. *outbound stock area- material that has been processed and is stored until needed at the next downstream station.

31

Kanban Example

Workcenter B uses parts produced by Workcenter A

How can we control the flow of materials so that B alwayshas parts and A doesn’t overproduce?

Workcenter A Workcenter B

32

When a container is opened by Workcenter B, its kanban card is removed and sent back to Workcenter A.This is a signal to Workcenter A to produce another box of parts.

Kanban card: Signal to produceWorkcenter A Workcenter B

Kanban Card

33

Empty Box: Signal to pull

Empty box sent back. Signal to pull another full box intoWorkcenter B.Question: How many kanban cards here? Why?

Workcenter A Workcenter B

34

Types of Kanbans

35

Types of Kanbans

36

Types of Kanbans

37

Types of Kanbans• Kanban Square– Marked area designed to hold items

• Signal Kanban– Triangular kanban used to signal production at the

previous workstation• Material Kanban

– Used to order material in advance of a process• Supplier Kanbans

– Rotate between the factory and suppliers

freeleansite.com

Production or (In-Process)-Kanban– Provides production instructions for the work center– Tells the workers exactly the quantity and the type of part to

produce– Used for work centers that produce only one part number or

have minimal setups in spite of multiple part number production

• Rectangular – one piece flow production• Triangular – for small lot production

Withdrawal-Kanban– Inter-Process Kanban

• Delivers order for parts from a preceding process• Specifies quantity and type of parts to deliver from Location

A to Location B– Later replenishment system – kanban are filled from

suppliers finished goods shelf– Sequenced withdrawal – supplier sequences parts in

reverse order for truck loading – Supplier Kanban

• Same as an inter-process Kanban, except it signals conveyance of part from an outside supplier

Kanban Types

freeleansite.com

Job order-Kanban– Issued for each job order

Through-Kanban– When two processes are very close, it doesn’t make sense to issue two

Kanbans. Used where one process directly feeds (conveyor) the next process.

Common-Kanban– Where a withdrawal kanban is used as a production ordering kanban if

the distance between two processes is very short and share the same supervisor.

– Emergency-Kanban

– Temporary, when there is a defect or problem, can be withdrawal or production

Other Kanban Types

freeleansite.com

• Never Pass on A Bad Part• The Parts Are Always Withdrawn From The Prior

Process• Produce Only What Is Necessary To Replenish The

Quantity Withdrawn• Level Load Production, Rapid Changeover, Small Lot

Production, Zero Defects• Kanban Is Used To Fine Tune (Not Provide For Major

Changes)• The Process Must Be Capable Of Producing Good Parts

(Rational And Stable)• Need Efficient Methods Of Transportation, Shortest

Routes Possible• Disciplined Organization• Nothing Is Made or Transported Without A Kanban.• Kanban Cards Always Accompany the Parts

Themselves.• The Number of Kanbans Should Decrease over time.

Rules of the Kanban

41

Determining Number of Kanbans

where

N = number of kanbans or containersd = average demand over some time periodL = lead time to replenish an orderS = safety stockC = container size

No. of Kanbans =average demand during lead time + safety stockcontainer size

NN = = dLdL + + SSCC

42

Determining the Number of Kanbansd = 150 bottles per hour

L = 30 minutes = 0.5 hoursS = 0.10(150 x 0.5) = 7.5C = 25 bottles

Round up to 4 (to allow some slack) or down to 3 (to force improvement)

Containers or Kanbans 3.3

255.77525

5.7)5.0150(CSdLN

Solution

44

Product Specific One-card Kanban System

Product Zafter process A

Process AProcess BProcess C

Process A+B+CProcess A+B

Finished product X

Product Xafter process A

Finished product Z

product X kanban card

Process A

Location after process A

45

Signals From Parts And Cards

Product Z removed from FGI

Product Z Kanban card put up at C

Z1

Authorizes another product Z to be started

46

More details……process B & C

ZCompleted Z after process C goes with card to FGI

Z1

Z1

Z kanban put up at B to schedule production of another Z product

C removes partially completed Z from input buffer

47

Moving further upstream….

Completed Z after process B goes with card to output buffer

Z1

Z kanban put up at A to schedule production of another Z product

Z1

B removes partially completed Z from input buffer

48

Last step……...

Z and kanban card placed in step A output buffer

process step A creates product Z

49

Idle state

• No kanban cards at any process stage– No production occurs– Removing an X or Z from FGI would restart process

50

Kanban work authorization• If this is state, who’s authorized to work on a Z?1. A2. B3. C4. A,B5. B,C6. A,C7. A,B,C8. none

51

Scheduling Kanban systems

• Each stage has its ‘own schedule’ of Kanbans

• This schedule is determined at the Kanban system design stage

• Production is indirectly scheduled by Kanban

52

Kanban Control System• Kanban card indicates standard quantity of production• Derived from two-bin inventory system• Kanban maintains discipline of pull production

Q = order quantityR = reorder point = demand during lead time

Bin 1 Bin 2

Q - R

R

Reorder Card

Kanban

a. Two-bin inventory system b. Kanban Inventory System

53

Kanban Control System• Once implemented, a Kanban system acts a control

system rather than a scheduling system• It implements a repetitive schedule embedded in

the system• This schedule can be generated by a scheduling

algorithm• Simulation can be used to determine the number of

Kanbans, queue size, etc.

54

Kanban Control Systems• Roles of Kanban– To indicate what is needed at which production stage– To allow various stages to efficiently communicate with each other– The information can be obtained from the Kanbans

• Product name• Code• Volume • Preceding stage and subsequent stage (From .. To ..)

• Process– Company’s production plan is given only to the final line– Every stage automatically knows how much and when to produce

the parts required

55

General Kanban SystemOp1: when demand from stage i+1 occurs, withdraw a Kanban and place it on the dispatching board

Op2: production activity initiates when a Kanban is placed on the dispatching board

Op3: simultaneously, demand is sent to stage i-1 if demand occurs at stage i

Op4: completed parts with Kanbans are sent to stage i+1

56

Operations Principles of Kanban Systems

• Move a Kanban only when the lot it represents is consumed• No withdrawal of parts without a Kanban is allowed• Kanban should always be attached to the physical parts (box)• Do not send defective parts to the succeeding stages• Withdraw only the parts needed at each stage• Produce the exact quantity of parts withdrawn• The # of parts issued to the subsequent process must be the exact

number specified by the Kanban

• Avoid complex information and hierarchical control systems

57

Dual Kanban system

Using production and

withdrawal Kanbans

58

Dual Kanban system

Process

A

Process

B

P

W Container with withdrawal kanban

Container with production kanban

PWP

XXX X X

Flow of work

Flow of kanban

Minimizing Waste: Kanban Control System

Bin Part A

Bin Part AMachine

Center Assembly Line

Material Flow

Card (signal) Flow

withdrawal kanban

production kanban

A Two-Card Kanban JIT Operating System

Kanban Systems, Cont.

• Conveyance kanban- a card that identifies needed material, the feeding workstation, and the receiving workstation.

• Production kanban- Is the signal and authority for the work station operators to replenish the materials just forwarded to the from the outbound stock area.

Kanbans and Other Signals

• There are two types of Kanban cards:– a conveyance card (C-Kanban)– a production card (P-Kanban)

• Signals come in many forms other than cards, including:– an empty crate– an empty designated location on the floor

Kanban System

The number of Kanban cards is directly proportional to the amount of work-in-process inventory.Managers and employees strive to reduce the number of cards in the system through reduced lead times (p or w), lower α values, or other improvements.WIP inventories are similar to the water level in a lake. High levels hide critical inefficiencies. By reducing inventories, inefficiencies are exposed and must be solved using a JIT system.

Number of Kanban Cards Required:K = d(p + w)(1+ ) [17.1] C

where K = the number of Kanban cards in the operating system.

d = the average daily production rate as determined from the master production schedule.

w = the waiting time of Kanban cards in decimal fractions of a day (that is, the waiting time of a part).

p = the processing time per part, in decimal fractions of a day.

C = the capacity of a standard container in the proper units of measure (parts, items, etc.).

= a policy variable determined by the efficiency of the process and its workstations and the

uncertainty of the workplace, and therefore, a form of safety stock usually ranging from 0 to 1. However, technically there is no upper limit on the value of .

Chapter 17 Lean Operating Systems

Solved ProblemBracket Manufacturing uses a Kanban system for a component part. The daily demand is 800 brackets. Each container has a combined waiting and processing time of 0.34 days. The container size is 50 brackets and safety factor () is 9 percent. a) How many Kanban card sets should be authorized? b) What is the maximum inventory of brackets in the

system of brackets? c) What are the answers to (a) and (b) if waiting and

processing time are reduced by 25%?d) If we assume one-half the containers are empty and

one-half full at any given time, what is the average inventory in the system for the original problem?

Chapter 17 Lean Operating Systems

Solved Problem – Solution

Using Equation 17.1:a) K = d(p + w)(1+ )=(800 units)(.34)(1 + .09)=5.93 6

C 50Thus, 6 containers and 6 Kanban card sets are necessary to fulfill daily demand.

b) The maximum authorized inventory is K×C = 6×50 = 300 brackets.

c) K = d(p + w)(1+ )=(800 units)(.255)(1 + .09)=4.45 5 C 50

Thus, 5 containers and 5 Kanban card sets are necessary to fulfill daily demand. The maximum authorized inventory is now K×C = 5×50 = 250 brackets.

Chapter 17 Lean Operating Systems

Solved Problem - Solution

d) The average inventory under this assumption is 300/2 = 150 brackets.

Many variables in the JIT system determine whether this assumption is valid or not. For example, for a given combination of daily demand, processing and waiting times, and other process inefficiencies and uncertainties, it is possible for more or less containers to be empty (full).

Chapter 17 Lean Operating Systems

Determining the number of kanban cards / containers needed for each item

• An item has a 2 day lead time (when a kanban is emptied it will take 2 days to refill it)

• Thus, you need to activate 5 kanban cards (demand during lead time divided by kanban size)

• You will need 100 within the replenishment lead time (average daily demand times lead time)

• Average daily usage of the item is 50 per day

• An item has a 2 day lead time (when a kanban is emptied it will take 2 days to refill it)

ESSENTIAL ELEMENTS OF KANBAN

• STOCK POINTS• WITHDRAWAL SIGNAL• IMMEDIATE FEEDBACK• FREQUENT REPLENISHMENT

FUNCTIONS OF KANBAN

• PROVIDES PICK UP INFO• PROVIDES PRODUCTION INFO• PREVENTS OVER PRODUCTION• SERVES AS WORK ORDER ATTACHED TO GOODS• PREVENTS DEFECTS BY IDENTIFYING PROCESS

MAKING THE DEFECTS• MAINTAINS INVENTORY CONTROL

How Kanban Operates

When a worker at downstream Work Center #2 needs acontainer of parts, she does the following:

– She takes the C-Kanban from the container she just emptied

– She finds a full container of the needed part in storage– She places the C-Kanban in the full container and removes

the P-Kanban from the full container and places it on a post at Work Center #1

– She takes the full container of parts with its C-Kanban back to Work Center #2

Kanban CardsConveyance Kanban CardConveyance Kanban Card

Part number to produce: M471-36 Part description: Valve HousingPart number to produce: M471-36 Part description: Valve Housing

Lot size needed: 40Lot size needed: 40 Container type: RED Crate Container type: RED Crate

Card number: 2 of 5Card number: 2 of 5 Retrieval storage location: NW53D Retrieval storage location: NW53D

From work center: 22From work center: 22 To work center: 35 To work center: 35

Kanban CardsProduction Kanban CardProduction Kanban Card

Part number to produce: M471-36 Part description: Valve HousingPart number to produce: M471-36 Part description: Valve Housing

Lot size needed: 40Lot size needed: 40 Container type: RED crate Container type: RED crate

Card number: 4 of 5Card number: 4 of 5 Completed storage location: NW53D Completed storage location: NW53D

From work center: 22From work center: 22 To work center: 35 To work center: 35

Materials required:Materials required:Material no. 744BMaterial no. 744B Storage location: NW48CStorage location: NW48CPart no. B238-5Part no. B238-5 Storage location: NW47BStorage location: NW47B

Containers in a Kanban System

• Kanban is based on the simple idea of replacement of containers of parts, one at a time.

• Containers are reserved for specific parts, are purposely kept small, and always contain the same standard number of parts for each part number.

• At Toyota the containers must not hold more than about 10% of a day’s requirements.

• There is a minimum of two containers for each part number, one at the upstream “producing” work center and one at the downstream “using” work center.

How Kanban systems work

• Applies the basic principles of synchronous management.

• Principle 1: Do not focus on balancing capacities, focus on synchronizing the flow.

• Principle 2: The level of utilization of a non-bottleneck resource is controlled by other constraints within the system.

• Principle 3: Resources must be utilized, not simply activated.

How Kanbans work, cont.

• Principle 4: A transfer batch may not, and many times should not, be equal to the process batch.

• Principle 5: A process batch should be variable both along its route and over time.

Why consider kanban control?

Lower inventory investment

Better “customer” service

Reduced administrative costs

What makes kanban control different ?

• Kanban is “pull” based – driven by actual usage not forecasts

• Kanban replenishment is simple ?

PULL ENTITIES IN KANBAN• WORK CENTRE – WHEN WORK CENTRE KANBAN CHECKED OUT SYSTEM

FINDS AN OPEN WORK ORDER OR RATE SCHEDULE . WHEN NO WORK ORDER EXISTS SYSTEM CREATES A WORK ORDER TO FULFIL KANBAN DEMAND. WHEN KANBAN IS CHECKED TO INDICATE REPLACEMENT AN INVENTORY TRANSFER FROM SUPPLYING LOCATION TO CONSUMING LOCATION OCCURS

• INVENTORY-WHEN INVENTORY KANBAN CHECKED OUT SYSTEM CREAES INVENTORY TRANSFER TO MOVE MATERIAL FROM ITS SUPPLYING LOCATION TO CONSUMING LOCATION eg REQUIRED RAW MATERIAL MOVED FROM INVENTORY TO WORK CENTRELOCATION OR SHOP FLOOR

• SUPPLIER-WHEN A SUPPLIER KANBAN CHECKED OUT SYSTEM CREATES A PO OR INITIATES A BLANKET PO RELEASE.PO RECEIPT FOR GOODS RECEIPT DONE WHEN KANBAN CHECKED TO INDICATE REPLENISHMENTINVENTORY TRANSFER FROM SUPPLYING LOCATION TO CONSUMING LOCATIO DONE

PULL ENTITIES IN KANBAN• BRANCH-SYSTEM CREATES A SALES ORDER AND PO FOR ITEM.

SYSTEM RECEIVES PO CREATED• OUTSIDE ASSEMBLY – SYSTEM CREATES SALES ORDER FOR LIST

OF COMPONENTS REQUIRED TO MAKE A PRODUCT.PO CREATED FOR INVENTORY TRANSFER FROM SUPPLYING LOCATION TO CONSUMING LOCATION

Managing Kanban Systems

How is lead time (i) determined?

• By observation – start with “too many” kanbans in the system. Mark the time when a kanban leaves the output buffer to be replenished. Record when the kanban returns to the output buffer. Record a number of observations and find the mean and standard deviation. To build in a safety factor, the lead time should be calculated as the mean plus 2 or 3 standard deviations.

Managing Kanban Systems

Key factors which must be in place before implementing a kanban system:

• Demand is approximately constant over a planning period

• Small setup times

• Available, flexible capacity

• Disciplined workforce

STRATEGIES IN KANBAN• REPLENISHMENT STRATEGY (VARIABLE SS , ROL , EOQ)• ENVIRONMENT TURBULENCE INDICATORS SUCH AS

DYNAMIC CUSTOMER REQUIREMENT (CUSTOMER FUNCTION DEPLOYMENT) , SUPPLY CHAIN TURBULENCE (LOGISTICS)

• REQUIREMENT FOR AGILITY AND FLEXIBILITY eg MAGIC EYE

TIPS FOR EFFECTIVE KANBAN

• REPLENISHMENT PROCESS TO BE BALANCED TO REDUCE RISK OF OVER STOCKING OR POTENTIAL STOCKOUTS

• NO PART TO BE PRODUCED WITHOUT KANBAN SIGNAL AND CARDS TO ALWAYS ACCOMPANY CONTAINER FROM THE SUPPLIER SIDE UNTIL IT IS OUT OF THE KANBAN STAGING AREA

• EACH CONTAINER MUST HAVE A SEPARATE KANBAN CARD WITH PART NUMBER DESCRIPTION QTY AND LOCATION OF CONSUMER AND PRODUCER

• NO PART TO BE PRODUCED WITHOUT A KANBAN SIGNAL

TIPS FOR EFFECTIVE KANBAN

• PARTS TO BE PULLED THRU SUCCEEDING WORKSTATIONS OR PROCESS

• NO DEFECTIVE PART TO BE SENT TO SUCCEEDING WORK STATION OR PROCESS

• AMOUNT OF OUTPUT PRODUCED SHOULD CORRESPOND TO QUANTITY WITHDRAWN BY SUCCEEDING WORK STATION / PROCESS

MANAGEMENT PRACTICES IN KANBAN

• PRODUCTION SMOOTHING • REDUCTION OF SET UP TIME• STANDARDIZATION OF JOBS• IMPROVEMENT OF ACTIVITIES• AUTOMATION

How Do We Implement It?

• 3 Steps– Define the common goal so that it is understandable

and meaningful to everyone

– Develop what will cause individual actions to relate to the common goal

– Manage the various actions to achieve the greatest benefit

BENEFITS OF KANBAN

• PROVIDES QUICK AND PRECISE INFORMATION

• PROVIDES QUICK RESPONSE TO CHANGES• AVOIDS OVER PRODUCTION• MINIMIZES WASTE• MAINTAINS FULL CONTROL• DELEGATES RESPONSIBILITIES TO

WORKERS

freeleansite.com

Benefits of Kanban

• Primary– Eliminate over-production, the #1 waste– Produce only what is ordered, when ordered, & quantity

ordered

• Secondary– Increase flexibility to meet customer demand– Reduction in scheduling by Production Control &

Manufacturing– Competitive advantage by sequencing shipments to customers

(what they want, when they want it, in the order they want it!)