KANBAN
An LT6 Training Sesion
Course Introduction
Introduction
Course Objectives:
» What do you expect to get out of this
» How much do you already understand
about Kanban
» What you can expect from this course…
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What is Kanban
How it is used
Why it is used
Benefits
How to calculate
Hope to make it interesting
Kanban
Introduction
Course Outline:
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Kanban Defined
Why is Kanban used, when not to use
How does Kanban work
Benefits of Kanban
How to calculate Kanban qty / size
Simulation
Kanban
Kanban Defined
Kanban Defined
Definition:
» The word Kan means "visual“ and the word "ban"
means "card". Roughly interpreted.. Kanban
refers to "visual cards". Wikipedia
» What is a visual card? It is a visual aid that
triggers action.
» A system of continuous supply of components,
parts and supplies, such that workers have what
they need, where they need it, when they need it.
» A visual signal to either move or make something.
» Supports PULL, pulling the product at the
demand of the customer (VS PUSH)
Kanban
Kanban Defined
Everyday Life Examples:
» A signal to “replenish”…..
How is this a Kanban?
Kanban
Kanban Defined
Everyday Life Examples:
» What do you think about when you see this?
How is this a Kanban?
Kanban
Kanban Defined
Everyday Life Examples:
Any other examples
you can think of ???
Kanban
Kanban Defined
Work Examples:
» A signal to “replenish”…..
How is this Kanban?
Kanban
Why, Why Not
Use Kanban?
Kanban: Why, Why Not
Use Kanban……
» When Single Piece Flow is impractical
– Single piece flow is “better” than Kanban
– Flow when you can, Pull (Kanban) where you must
» Like a supermarket, providing a buffer which
allows some flexibility in usage
» When it is difficult to schedule with enough
accuracy
» When cost of the product is not excessive
» When “monuments” are part of the flow
» High volume/low value commodities
Kanban
Kanban: Why, Why Not
Poor Uses of Kanban……
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When easily scheduled
When cost of commodities is high
When usage is extremely variable
Low volume/high value commodities
VS
Kanban
Types and
How They Work?
Kanban: Types and How They Work
Types & Characteristics
Nearby
Empty Space
Few parts
Small batches
Empty Containers
Infrequent changes
Kanban Cards
Trigger Boards
Electronic
Many parts
Large batches
Frequent changes
Far Away
Virtual Kanban
Kanban
Kanban: Types and How They Work
Types & Characteristics
» Empty Space
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Most simple and basic form
Very close to supplier and/or customer
Empty space is the trigger to “move or make”
Variations – Min/Max system, “Low Water mark”
» Examples….
– Queue in fast foot drive through
– Restocking the shelves at the supermarket
– Taped off squares on workbench
Kanban
Kanban: Types and How They Work
Types & Characteristics
» Empty Container
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Customer sends empty container back to supplier
This is the signal for the supplier to refill the container
More distance between supplier and customer
Multi-bin system, Typical = 3 bin system
Variation – Used up or damaged part
» Examples
– Empty parts container in manufacturing
– Service bringing back a defective transformer
Kanban
Kanban: Types and How They Work
Types & Characteristics
» Kanban Card
– A physical card with information conveys message to
move or make
– Card is passed from customer to supplier, includes
necessary info: Part details; Qty; Location;
» Examples
– Note in check book box, “Time To Re-Order”
– Card sent to stock room to send more of part “X” to
production
Kanban
Kanban: Types and How They Work
Types & Characteristics
» Trigger Board
– A board containing a number of locations to house
Kanban signals.
– Can be cards hung on the board by the customer, the
supplier comes around at regular intervals to see what
needs to be replenished
Kanban
Kanban: Types and How They Work
Types & Characteristics
» Electronic
– The signal to move or make begins with a scanning
process
– Generally used to send a signal longer distances, like to
an offsite supplier
– Saves time, eliminates issues with lost cards, etc.
» Examples
– Scanning purchased items at a store
– Vendor managed inventory
Kanban
Kanban: Types and How They Work
Types & Characteristics
» Virtual Kanban
– A “system” that keeps one eye on current usage and
Kanban activity, and one eye on “end customer”
demand, (I hate to say) projected demand.
– Sometimes Kanban qty should be adjusted based on this
forward looking vision.
» Example
– Software that looks at future requirements or estimates
and analyzes the ability of the kanban levels to
accommodate, changes made to kanban if/when
necessary.
Kanban
Kanban: Types and How They Work
Types & Characteristics
» Supermarket
– The components needed to build a “widget” are stored in
bulk near point of use
– As used, refilled by stockroom / supplier
– A good way to start looking at Kanban
Kanban
Benefits?
Kanban: Benefits
Reduce Inventory and Product
Obsolescence.
» Parts delivered more timely, may translate into less
storage space where work is performed
» Less inventory of products or components to become
obsolete.
» Kaizen (Continuous Improvement) can proceed without
fear, product designs can be upgraded in small
increments on a continual basis, those upgrades are
immediately incorporated into the product with less
waste from obsolete components or parts.
Kanban
Kanban: Benefits
Reduces Scrap and Repair Costs
» With less inventory
– Fewer mistakes to find and fix when identified
– Fewer components to sort
– Fewer components to scrap or repair
Kanban
Kanban: Benefits
Provides Flexibility
» Accomodates sudden changes in demand
– Demand drops – not burdened with large inventories
– Demand increases – quicker turns on Kanban signals
» With changes in demand, more easily able to set up
Value Streams for different products.
– Component supply less of a concern when changing lines
Kanban
Kanban: Benefits
Increases Output
» Reduces wait times by making supplies more
accessible
» Breaks down administrative barriers.
» This results in an increase in production using the
same resources.
Kanban
Kanban: Benefits
Facilitates Continuous Improvement
» Problems are easier to see
Problems
are a gift
– Idle operators are an indication of…..
– Poorly balances lines
– Quality problems
– Misunderstanding of customer demand
– Kanban “mis-deliveries” are an indication of…..
– Misunderstanding of customer demand
– Poor material handling techniques
– Poor communication between customer and supplier
Video example of problems fixed with Kanban
Kanban
Kanban: Benefits
Other Benefits
» Preventing Over Production, the WORST waste?
» Minimizing Wait Times and Logistics Costs
– Replaces complicated and expensive systems (MRP)?
» Reducing Stock Levels and Overhead Costs
– Fewer material handling resources
» Reducing Inventory Carry Costs
» Allows scheduling at a single point, often the last point,
(gate operation)
» Visual/manual system does not rely on complicated
computer systems which require extreme accuracy
Kanban
How To?
Kanban: How To
How To…..
» Begin
– Look for customer/supplier relationships, high volume
low cost component deliveries
– Look for problem areas, component delivery problems
– Look for large volumes, large amounts of real-estate
– Look for stagnant inventories
If Single Piece Flow is not an option, then Kanban may be
the answer…
» Take action
– Calculate Kanban size/requirements
Kanban
Kanban: How To
Simply put…..
» Kanban is sized to make sure the customer does
not run out of product between the time of
sending the signal and receiving product,
considering…
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How much is used over time by the customer
How long does it take the supplier to make/deliver more
How many fit in the delivery container
And, how much is needed for the safety stock
Kanban
Kanban: How To
How To…..
» Calculate – Single Kanban
(Order Point/Order Qty)
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Average OR peak customer demand = CD
Supplier replenishment time = R
Container qty = CQ
Desired safety stock (%)? = SS
OP = ((CD X R) + SS)/CQ
OQ = (CD X R)/CQ
– Apply “smell test”
Example 2
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Customer uses 100 parts/hour
Supplier replenishment time = 60 hours
Container qty = 1,000pcs
Desired safety stock (%)? = 2,000
Order Point (When) =
((100 X 60) + 2,000)/1,000
=8 Containers
& Order Quantity (How Many) =
(100 X 60)/1,000
=6 Containers
Kanban
Kanban: How To
How To…..
» Calculate – Multiple Kanban
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Customer Demand (Avg, Peak?)= CD
Supplier replenishment time = R
Container qty = CQ
Desired safety stock (%)? = SS
((CD X R) + SS)/CQ
(Round Up)
– Apply “smell test”
Example 1
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Customer uses 100 parts/hour
Supplier replenishment time = 60 hours
Container qty = 1,000pcs
Desired safety stock (%)? = 2,000
((100 X 60) + 2,000)/1,000
=8 Containers
OR
8 Kanban Cards
(Order When?…Every 1,000
used)
(Order How Many?.... 1,000 at a
time)
Kanban
Thoughts
Kanban: Thoughts
» Is PUSH ever an option?
– Very Long Lead Times?
– LEDs in Electronics
– Product Development?
– Administrative Operations?
Kanban
Kanban: Thoughts
6 Rules
» Do not send defective products to the
customer
» The customer withdraws only what is
needed (no hording)
» Supply only the quantity withdrawn by
the customer
» Equalize production
» Kanban is a means to fine tuning
» Stabilize the process
Kanban
Q&A
The End
Sources
Sources
Information Sources:
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Wikipedia
Superfactory.com
Toyota Way, Jeffrey K. Liker
Learning to See, Rother & Shook
Kanban