KANBANAn LT6 Training Sesion

Course 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…– What is Kanban– How it is used– Why it is used– Benefits– How to calculate– Hope to make it interesting

Introduction

Kanban

Course Outline:

» Kanban Defined» Why is Kanban used, when not to

use» How does Kanban work» Benefits of Kanban» How to calculate Kanban qty / size» Simulation

Introduction

Kanban

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 Defined

Kanban

Everyday Life Examples:

» A signal to “replenish”…..

Kanban Defined

Kanban

How is this a Kanban?

Everyday Life Examples:

» What do you think about when you see this?

Kanban Defined

Kanban

How is this a Kanban?

Everyday Life Examples:

Any other examples you can think of ???

Kanban Defined

Kanban

Work Examples:

» A signal to “replenish”…..

Kanban Defined

Kanban

How is this Kanban?

Why, Why Not

Use Kanban?

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: Why, Why Not

Kanban

Poor Uses of Kanban……

» When easily scheduled» When cost of commodities is high» When usage is extremely variable» Low volume/high value commodities

Kanban: Why, Why Not

Kanban

VS

Types and

How They Work?

Types & Characteristics

Kanban: Types and How They Work

Kanban

Few parts

Small batches

Infrequent changes

Empty Space

Many parts

Large batches

Frequent changes

Nearby

Far Away

Empty Containers

Kanban Cards

Trigger Boards

Electronic

Virtual Kanban

Complexity

Proximity

Types & Characteristics» Empty Space

– 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: Types and How They Work

Kanban

Types & Characteristics

» Empty Container– 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: Types and How They Work

Kanban

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: Types and How They Work

Kanban

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: Types and How They Work

Kanban

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: Types and How They Work

Kanban

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: Types and How They Work

Kanban

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: Types and How They Work

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: Benefits

Kanban

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: Benefits

Kanban

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: Benefits

Kanban

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: Benefits

Kanban

Facilitates Continuous Improvement

» Problems are easier to see– 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: Benefits

Kanban

Problems are a gift

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: Benefits

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 inventoriesIf Single Piece Flow is not an option, then Kanban may

be the answer…

» Take action– Calculate Kanban size/requirements

Kanban: How To

Kanban

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…– 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: How To

Kanban

How To…..

» Calculate – Single Kanban (Order Point/Order Qty)

– Average OR peak customer demand = CD

– Supplier replenishment time = R– Container qty = CQ– Desired safety stock (%)? = SS

OP = ((CD X R) + SS)/CQOQ = (CD X R)/CQ

– Apply “smell test”

Kanban: How To

Kanban

Example 2– 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

How To…..

» Calculate – Multiple Kanban

– 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”

Kanban: How To

Kanban

Example 1– 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)

Thoughts

Kanban: Thoughts

Kanban

» Is PUSH ever an option?– Very Long Lead Times?

– LEDs in Electronics

– Product Development?– Administrative Operations?

6 Rules

Kanban: Thoughts

Kanban

» 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

Q&A

The End

Sources

Information Sources:

» Wikipedia» Superfactory.com» Toyota Way, Jeffrey K. Liker» Learning to See, Rother & Shook

Sources

Kanban