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Tuesday, April 3, 2007

KANBAN introduction


Most Japanese manufacturing companies view the making of a product as continuous-from design, manufacture, and distribution to sales and customer service. For many Japanese companies the heart of this process is the Kanban, a Japanese term for "visual record", which directly or indirectly drives much of the manufacturing
organization. It was originally developed at Toyota in the 1950s as a way of managing material flow on the assembly line (Perelman, 1994: 85). Over the past three decades the Kanban process, which Bernstein (1984: 48) identifies as "a highly efficient and effective factory production system", has developed into an optimum manufacturing environment leading to global competitiveness.

The Japanese Kanban process of production is sometimes incorrectly described as a simple just-in-time management technique, a concept which attempts to maintain minimum inventory. The Japanese Kanban process involves more than fine tuning production and supplier scheduling systems, where inventories are minimized by supplying these when needed in production and work in progress in closely monitored. It also encourages; Industrial re-engineering, such as a 'module and cellular production' system, and, Japanese human resources management, where team members are responsible for specific work elements and employees are encouraged to effectively participate in continuously improving Kanban processes within the Kaizen concept

Kanban (in kanji 看板 also in katakana カンバン, where "kan 看 カン" means visual, and "ban 板 バン" means card or board) is a concept related to Lean or Just In Time (JIT) production, but these two concepts are not the same thing. According to Taiichi Ohno, the man credited with developing JIT, kanban is the means through which JIT is managed.
Kanban (kahn-bahn) means “visible record” or “visible part”. In general context, it refers to a signal of some kind. Thus, in the manufacturing environment, kanbans are signals used to replenish the inventory of items used repetitively within a facility. The kanban system is based on a customer of a part pulling the part from the supplier of that part. The customer of the part can be an actual consumer of a finished product (external) or the production personnel at the succeeding station in a manufacturing facility (internal). Likewise, the supplier could be the person at the preceding station in a manufacturing facility. The premise of kanbans is that material will not be produced or moved until a customer sends the signal to do so.

The typical kanban signal is an empty container designed to hold a standard quantity of material or parts. When the container is empty, the customer sends it back to the supplier. The container has attached to it instructions for refilling the container such as the part number, description, quantity, customer, supplier, and purchase or work order number. Some other common forms of kanban signals are supplier replaceable cards for cardboard boxed designed to hold a standard quantity, standard container enclosed by a painting of the outline of the container on the floor, and color coded striped golf balls sent via pneumatic tubes from station to station.

Kanbans serve many purposes. They act as communication devices from the point of use to the previous operation and as visual communication tools. They act as purchase orders for our suppliers and work orders for the production departments, thereby eliminating much of the paperwork that would otherwise be required. In addition, kanbans reinforce other manufacturing objectives such as increasing responsibility of the machine operator and allowing for proactive action on quality defects. However, kanbans should not be used when lot production or safety stock is required because the kanban system will not account for these requirements.

Push vs. Pull System:

A Pull system is a method of controlling the flow of resources by replacing only what has been consumed. A pull system relies on customer demand. A Kanban system is a Pull system that uses color-coded cards attached to parts or part containers to regulate the upstream production and delivery flow. In a Kanban system, we establish the minimum and maximum on-hand quantities for raw materials, supplies, and each assembly or product manufactured.
As an example, a color-coded card is used to indicate that a specific quantity of parts needs to be made. When the card is delivered to a machinist, he or she will create the specified number of the part ordered – no parts are made until this card is received. Another simple Kanban incorporates a color-coded carton that will always contain a particular part. The container is delivered back to the producing department for refilling when it becomes empty, triggering the creation of more of that specific part.
When customer demand drives the flow of resources and delivery of product in this way, we reduce the wastes incurred by overproduction. Since our workers are not spending time making excess product, overall turnaround times decrease. This decrease in turnaround time increases customer satisfaction, as well as our ability to compete for orders, and decreases our investment of time and resources in forecasting and scheduling systems.

The Kanban system described is a pull system. Traditionally, a push system is and has been employed. The push system is also more commonly known as the Materials Requirements Planning (MRP) system. This system is based on the Planning Department setting up a long-term production schedule which is then dissected to give a detailed schedule for making or buying parts. This detailed schedule then pushes the production people to make a part and push it forward to the next station. The major weakness of this system is that it relies on guessing the future customer demand to develop the schedule that production is based on and guessing the time it takes to produce each part. Over-estimation and under-estimation may lead to excess inventory or part shortages, respectively.

One of the major reasons kanbans are used is to eliminate or reduce the above mentioned wastes throughout an organization due to the pull system that is employed. Waste can come from over-production (inventory) and therefore, the need for a stockroom. This waste is eliminated. Part shortages (under-production) are also eliminated. Costs are reduced by eliminating the need for many of the purchasing personnel and the paperwork associated with purchasing. The planning department’s workload is also reduced as they no longer need to produce work orders.


Dual-Card Kanban

This kanban system is more commonly referred to as the Toyota kanban system as Toyota was the first to employ this system in full scale use. It is a more useful kanban technique in large-scale, high variety manufacturing facilities. In this system, each part has its own special container designed to hold a precise quantity of that part. Two cards are used: the production kanban which serves the supplier workstation and the conveyance kanban, which serves the customer workstation. Each container cycles from the supplier workstation to its stockpoint to the customer workstation and its stockpoint, and back while one kanban is exchanged for another. No parts are produced unless a P-kanban authorizes it. There is only one C-kanban and one P-kanban for each container and each container holds a standard quantity (no more, no less).

Single-Card Kanban

The single-card kanban system is a more convenient system for manufacturing facilities requiring less variety in their parts. Essentially, the single-card kanban system is simply a dual-card kanban system with the absence of the production kanban and designated stock points.


Implementing a kanban system entails four major steps (which may be slightly modified depending on the requirements of the facility):

Step #1 is to pick the parts we would like to kanban. In general, these parts should be used repetitively within the plant with fairly smooth production requirements from month to month.
Kanban is not suited for all inventory items – look for
– items with frequent usage
– items with short lead times
– items with “willing” suppliers

Step #2 is to calculate the kanban quantity
The weekly part usage is, as the name implies, the quantity of the part under consideration used per week. The lead time is given by the supplier. The usual manufacturing facility lead time is 5 working days per week. The number of locations tells us how many locations should have a full container to begin with. The smoothing factor is used to account for seasonal fluctuations in demand. It is a constant determined by the ratio of the fluctuating demand to the regular demand.

Step #3 is to pick the type of signal and container to be used which holds a standard quantity. The container should aid visual identification, ease of storage, and count of material at the point of use.

Step #4 is to calculate the number of containers.

KANBAN introduction

Lets see how does Kanban replenishment cycle works in Oracle...

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