Just-in-time and Kanban
Push or Pull?
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Just-in-time Philosophy
JIT manufacturing is defined as the elimination of all waste
and continuous improvement of productivity.
Waste means anything other than the minimum amount of
equipment, parts, space, material, and workers’ time absolutely
necessary to add value to the product. This means there should
be no surplus, there should be no safety stocks, and lead times
should be minimal.
The concept of JIT:
To have the right parts and quantities at the right time and
place.
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JIT Environment
Many elements are characteristic of a JIT environment:
•
•
•
•
•
•
•
•
Flow manufacturing
Process flexibility
Total quality management
Total productive maintenance
Uninterrupted flow
Continuous process improvement
Supplier partnerships
Total employee involvement
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The Pull System
The pull system was developed as an alternative
to classical “push” MRP.
The underlying concept is not to preplan and
generate schedules, but instead to react to the final
customer order and produce only what is needed to
satisfy demand and then only when it is needed.
Push system: Production oriented
Pull system: Customer oriented
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Kanban System
With shortened lead times a constant goal in JIT, a system is
needed to generate the reorder point signal without having to rely
on a formal, structured system that could take time to react.
A simple card system called Kanban, which roughly
translated from Japanese means card or ticket.
The system works very simply. The Kanban signal (often a
piece of cardboard) identifies the material to which it is attached.
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The Kanban System
The information on the Kanban will often include:
•
•
•
•
Component part number and identification.
Storage location.
Container size (if the material is stored in a container).
Work center (or supplier) of origin.
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The Kanban System
Withdrawal Kanban (WK)
A move signal that calls for refilling the raw
material.
Circulated from the customer process (or down
station or succeeding station) to the supplying process (or
previous station or preceding station).
At customer process:
Operator:
 Processes the parts when the PK has been shown.
 Removes WK and places it in a collection box once he/she
begins to use the first part in that container (or you also can
set the rule that once he/she used up the raw materials).
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The Kanban System
Material Handler (at an established interval):
 Collects WK.
 Gets the finished parts at preceding station
indicated by WK of the down station. When
finished part container of the preceding station is
empty, post this station’s production kanban.
 Delivers the finished parts to down station
(customer process) and attach the WK to the
container.
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The Kanban System
Production Kanban
A make signal
It calls operator to start production. What part to
process, how many quantity, and using which raw
materials, etc are shown in the PK. The operator's
work is to refill the empty finished product container).
Circulated inside the station.
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The Kanban promotes the small
batch size production
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The Kanban System
How does it work?
WITHDRAWAL CARD
Two-card Kanban system.
Production kanban (authorizing production)
Withdrawal kanban (authorizing the movement of the identified
material).
At the start of the process there is no movement, since all the cards
are attached to full containers or bins.
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The Kanban System
WITHDRAWAL CARD
At some point, a down station needs some of the parts produced
by work center 2 (in its “finished product” bin at the right side of this
center). The material handler will take a bin of the part from work
center 2, at the same time, post the production kanban (PK) in the
card post of this center. (moment ago, the PK is attached to the full
finished product bin).
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The Kanban System
WITHDRAWAL CARD
The posted PK is the signal to start production at the work center 2
to replace the empty finished product bin. To do that work the
operator needs raw material, which is in the raw materials bin at the
left side of the work center with the withdrawal kanban (WK)
attached. When that material is used up, the WK will be posted by the
operator.
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The Kanban System
WITHDRAWAL CARD
The posted WK authorized movement of material that usually is
found in the “finished product” bin of work center 1. The material
handler will now collect the WK and deliver the material to down
station (work center 2). Before the materials handler sends the
materials back to the center 2, however, he must remove the PK of
the finished product bin of center 1 and post it, which will authorizes
center 1’s production. Also, after materials handler delivered the
materials to center 2, he also has to attach the WK to the full raw
materials bin of center 2.
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The Kanban System
WITHDRAWAL CARD
Now, there is an PK posted at work center 1 which calls the
operator to start production, using its raw material at the left side
bins. Of course, the operator will refill his/her finished product bin
and post the WK when his raw material bin is empty.
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The Kanban System
WITHDRAWAL CARD
This process continues upstream even to the suppliers.
There are no schedules with this system. Production is pulled by
down station’s demand. The movement of material is only authorized
purely to the amount of down station’s production.
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Kanban Rules
Six kanban rules:
1.
Downstream process should get right parts at right time
from upstream.
2.
Upstream process should produce parts or products in
quantity of downstream process.
3.
Defective products should never be passed on to
downstream process
4.
Number of kanbans should be minimized.
5.
Kanban can be utilized to adapt to very small variations
in production volume. 10%.
6.
The actual number of parts in box must equal to
number on kanban.
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Kanban and WIP
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The One Kanban System
The requirement for supplying process:
 must be reliable.
 must be proficient at having the correct parts
available
In this situation, the production Kanban is circulated within the
supply operation. When the supply operation receives the
production Kanban, it produces that part and supplies it promptly
to the customer.
A minimum amount of emergency stock should be kept on hand in
case of catastrophic failure.
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Expected Benefits
An effective kanban system will result in material being
delivered only in small quantities as it is needed. The
Kanban is a communication device telling the supplier
or supplying operation what to deliver and when to
deliver it. It smoothes the material flow.




Improved Material Flow
Reduced Inventory (or WIP)
Reduced Freight Costs
No Waiting
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Pull System Considerations
The failure of a pull system:
Lack of planning and proper management
Understanding the actual customer is the key to
program’s success.
Pull system considerations:
 Use the time allotted
The manager should allocate the time for supplying
process to properly replenish the market.
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Pull System Considerations
 Determine number of lots and lot size
There will be a shift in the workload with which material
handlers must adjust.
Carrying less parts, more often to deliver, vice versa.
 Maintain Delivery Cycles
Operators must realize the importance of completing
each delivery cycle as designed. Failure to do so results in
fluctuations in the material process, and the customer
process does not have sufficient parts at the operation to
continue production.
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Pull System Considerations
 Proper Training
It is important to spend the time to properly train
material handlers on their role in the process. They are the
ones who make the program a success or failure.
 Parts must be perfect
The program will not be successful if supply operations
do not ensure 100% quality parts to the down stations.
 Use triggers
In a pull system, operators must take charge of
requesting the material.
The easiest way to make the pull system fail is to not
initiate the trigger mechanism.
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Which to Choose—MRP (ERP), Kanban?
MRP (ERP)
Where it works best.
MRP is by its very nature a forward-looking system. MRP
can be very effective in an environment with a great deal of
variability and uncertainty. For example, it can handle variability
of demand as well, or better than most other systems, and tends
to be quite effective in dealing with product design changes and
process changes.
Where it is not as effective.
It is highly data dependent. It is not only critical to have a lot
of data, but the data needs to be both accurate and timely on an
on-going basis. The burden on the infrastructure can be high and
costly.
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Which to Choose—MRP (ERP),
Kanban?
JIT (Kanban)
Where it works best.
Kanban is a very reactive system. Very little is planned
ahead. Instead, Kanban causes replacement of material used in a
totally reactive mode. Product design can cause a real problem in
a Kanban system. For these reasons Kanban works best in a
highly stable and predictable environment.
Where it is not as effective.
Kanban can quickly fail in a highly volatile environment
because of the reactive nature of the system. Volatility in
customer demand, processing problems, and extensive changes
in product designs make it very difficult for a Kanban system to
work effectively.
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Which to Choose—MRP (ERP),
Kanban?
Kanban and MRP
The combination of these two systems is becoming quite
common. An MRP system is used for advanced planning,
including long lead-time purchased materials, adding resources,
and implementing product design changes. Once the MRP has
the materials and resources “lined up,” however, Kanban is used
as an execution system, bringing with it the characteristics of
rapid response to customer order and reduced inventory levels
throughout the process.
Hybrid Systems
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The Kanban System
Selection of the Container Size
Minimize:
c j (c1ij  c2ij
Subject to:
Di
hi  (ni  1)

)
ni
2
ni  N j
Where i is a notation for part. j is for material-handling technology.
c1ij and c2ij represent fixed cost per time and variable cost per
move for part type I using technology j.
Nj is he maximum load size for that material-handling technology.
ni: number of units authorized by a kanban for part i.
Ki: number of kanban for part i.
Di: demand rate for part i.
Nj: maximum load size using that technology.
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The Kanban System
By briefly ignoring the constraints, we can differentiate
objective equation with respect to nj to obtain:
 c2ij  Di
Cost


2
ni
ni
hi
2
By setting this equation to 0, we get:
n 
*
ij
2c2 ij  Di
hi
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The Kanban System
Example 1: The bottom of a printer body goes through three
steps: molding, trimming, and detailing. The table below provides
the annual fixed cost, cost per load, and maximum transport size
for three handling options. Choose the container size and
technology. The system will produce 200,000 printers per year.
Annual inventory holding cost is $2 per unit of WIP.
Option
Annual cost
Cost / trip
Max. Lot size
Manual Carry
$27,000
$0.15
2
Push Cart
$28,000
$0.16
20
Forklift
$50,000
$0.90
500
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The Kanban System
Solution:
The best container size for each technology:
n 
*
ij
2c2ij  Di
hi
2c2ij  200,000

2
 447.21 c2ij
Plugging c2ij, we have:
Option
The best container size nij
Manual Carry
300
Push Cart
310
Forklift
735
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The Kanban System
In all 3 cases, we are constrained by the maximum lot size.
Thus, we compare the cost using these feasible load size as
follows:
Manual:
Push cart:
Forklift:
(3)( 200 ,000 )
$27,000  $0.15 
 $72,000
2
$28,000  $0.16 
$50,000  $0.90 
(3)( 200 ,000 )
 $32,800
20
(3)( 200 ,000 )
 $51,000
500
The obvious choice is to use a push cart with containers of size
20 pieces.
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The Kanban System
Selecting the number of kanbans
ki 
 i  Di (1  l )
ni
Where i is a notation for part.
ni: number of units authorized by a kanban for part i.
ki: number of kanban for part i.
Di: demand rate for part i.
i: expected lead time to replenish a container for part i.
l: safety factor
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The Kanban System
Selecting the number of kanbans
Example 2:
A punch press forms a variety of sheet metal parts. A recent setup
reduction team has succeeded in reducing setups to two minutes. It is
now feasible to reduce as few as six items at a time when the machine
is set up. The six items can be stacked and removed as a single load.
Demand for one item is set at 75 units per day. With the small lot
sizes, replenishment lead time is expected to be constant at two hours
(0.2 days). Find the minimum number of kanbans needed to avoid
shortages.
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The Kanban System
Solution:
To find a lower bound, we can assume that the variabilities
of lead time and of demand are minimal and set l = 0. We then
have
(0.2)(75)
  D 
ki  

 2.5  3

6
 n 
Suppose that kanbans were collected and each part
scheduled once per day. Lead time demand now becomes
equal to daily demand and k = (D/n)=(75/6) = 13. Clearly, the
maximum possible inventory will be much larger in the second
case. However, these extra kanbans would usually be on the
schedule board waiting to be produced.
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The Kanban System
Selection of production Quantity
Minimize:
Subject to:
 *  s2,i 1 

o
Qi  Maxni 
, Qi 
  ti 



Di


s


t

D

i
i  1
 1i Q
i 
i

5.1
5.2
Where i is a notation for part. j is for material-handling technology.
s2i represent the extra setup time.
ti is the unit process time for part i.
ni: container size for part i.
Di: Demand rate for part i.
Qi: is the lot size.
Qio : the smallest set of values that satisfies the constraints equation
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The Kanban System
Example 3: Review example 1, suppose that The bottom of a
printer body goes through three steps: molding, trimming, and
detailing. The table below provides the annual fixed cost, cost per
load, and maximum several printer models are produced yielding
a total of $200,000 per year. Internal setup time is 0.0001 year.
For scheduling simplicity, the company would like to make the
batch size the same as the container size and have it the same
for all printer models. External setup and unit processing times for
the 3 stages are given in table below. Find an appropriate
container size.
Work station
External setup
(years)
Unit processing
time (years)
Molding
0.0002
0.000003
Trimming
0.0003
0.000003
Detailing
0.0001
0.000003
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The Kanban System
Solutions: We must find the LB imposed by each of 3
workstations based on material-handling technology, internal
setup, and external setup. We recall from example 1 that ni*=20,
and that is true for any model. The external setup induced batch
minimums are:
Qi 
s2,i 1
ti
Work station
Qi
Molding
66.7
Trimming
100
Detailing
33.3
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The Kanban System
Finally, if all batch sizes are the same, the internal setups
require
200,000
0.0001
 (200,000)(0.000003
) 1
Q
The smallest feasible batch size is thus Q=50 for setup time
feasibility. The largest of 3 LBs is 100 as determined by the
trimming operation. Thus, we set Q=100. With a container size is
20, this means that whenever we set up to run a printer model, we
must make 100 units—we wait until 5 containers or kanbans are
available. Producing 100 at a time, we have 200,000/100 = 2,000
setups per year, which will consume (2,000)(0.0001) = 0.2 years.
Unit processing time will consume (200,000)(0.000003) = 0.6
years. This yields a total utilization factor of 80% for the
workstations.
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Dynamic management of WIP levels
Example 4:
A company offers a constantly changing portfolio of customer
elections. Audio equipment represents one line of products. A key
circuit card that is used in speakers is produced in a work cell.
Because of changing technology and various product price levels, 3
versions of the card are currently produced. Considering capacity and
demand, the aggregate production plan for the 3 models over the next
10 weeks is shown in table below. Containers hold 5 card of the same
type. Normal replenishment lead time is 3 days (1/2 week), and the
company has found that 20% safety factor is sufficient for its kanban
operations. Determine a dynamic control strategy for the number of
kanbans required of each type.
Mod
el
1
Week
2
3
4
5
6
7
8
9
10
A
10
20
30
40
50
50
50
60
70
80
B
40
40
40
40
40
50
50
50
50
50
C
100
90
80
70
60
50
50
40
30
20
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Dynamic management of WIP levels
Solution:
First note that total production stays constant over the horizon.
Thus, it seems reasonable to assume that lead times will be constant.
Using Equation 5.2 and letting the subscript i represent the model and
t denote the week:
 i Dit (1  l )   (0.5) Dit (1.2) 
kit  
 0.12Dit


ni
5


 
For model A in week 1, this translates to kA1 = 0.12 (10) = 1.2 = 2
similarly
kB1 = 1.2 (40) = 5
and kA2 = 1.2 (20) = 3
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Dynamic management of WIP levels
Completing the entire table in this manner, the schedule for the
number of active kanbans per week becomes:
Mod
el
1
Week
2
3
4
5
6
7
8
9
10
A
2
3
4
5
6
6
6
7
8
9
B
5
5
5
5
5
6
6
6
6
6
C
11
10
9
8
7
6
6
5
4
3
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Kanban Priority
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References


Design and Analysis of Lean Production
Systems, R. Askin and J. Goldberg, John
wiley and Sons, Inc. 2002.
Introduction to materials management, By J.
R. Tony Arnold and Stephen N. Chapman, 5th
Edition, Prentice-Hall, Inc. 2004.
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