Kanban Production Just in time Systems GEOP 4316

Outline Definitions Goals and benefits Main components JIT and suppliers

Definitions Used alternatively. Similar meanings… Just in Time Production Pull Production Kanban Production

Definitions JIT/Pull/Kanban Production Scheduling system that tells you what to produce, when to produce it, and how much to produce. A process that aims to arrange an organization so that customer preference or orders are what cause materials to be "pulled" through a system. The idea is that the manufacturer only produces what the consumer wants when the consumer wants them. In other words, a product need only be produced at the same rate that they are being sold. http://hubpages.com/hub/Pull-Production-Kanban http://en.wikipedia.org/wiki/Kanban

JIT/Pull/Kanban Production Benefits Inventory is reduced at all points (RM, WIP, FG), matching demand. Improvement in quality given its easier to find and address quality issues. Makes operational problems visible (eg. supplier unreliability or poor yields, long setup times, …)

JIT/Pull/Kanban Production Production control system based on Kanbans Standardized containers Supermarkets (name used for inventory points/ stocks/ warehouses) Build to consumption (pull!)

JIT/Pull/Kanban Production We first need to understand traditional “push” systems Scheduling based on the Master Production Schedule, which is based on a combination of forecasts and sales Scheduling/production of batches based on the MPS. Production of large quantities given long setups (maximize local productivity)

JIT/Pull/Kanban Production The push approach result in “large” inventories and production that “sits” around This could mean using raw materials that are later need for a needed product This could result in a large batch that is later found defective

Components Kanban Production is controlled by signals Cards or other visual “information” holding device It includes information on Part name and number Quantity Origin Destination E-Kanbans are widely used

Components Example of kanbans

Components Kanban Rules Only conforming product flows Product always flows with a kanban No kanban card, no production Standardized containers

Components How many cards? numK =Number of kanban cards (also containers) D = Demand per unit of time ss = Safety Stock L = Lead time a = Container capacity (also the minimum amount to be produced) numK = DL (1 + ss)/a For example. Boards for a TV production system Operation makes 200 TVs/day; D = 200 u/d Local supplier replaces the Kanbans in 3 days; L = 3 days ss = 20% a = 50 boards (what fits on the container) numK = 200  3 (120%)/50 = 14.4 = 15 containers

Components

How Pull Works Supplier Production CK Supermarket DC 1 PK Supermarket PC PK Production Supermarket DC 1 CK SK

Supplier Production CK CK Supermarket DC 1 Supermarket PC PK CK CK SK

Supplier Production CK CK Supermarket DC 1 Supermarket PC PK CK CK SK

Supplier Production CK CK Supermarket DC 1 Supermarket PC PK CK CK SK

Supplier Production CK Supermarket DC 1 CK PK Supermarket PC CK CK SK

Supplier Production CK PK Supermarket DC 1 PK PK CK Supermarket PC CK SK

Supplier Production CK CK Supermarket DC 1 PK Supermarket PC PK PK CK SK

Supplier Production CK CK Supermarket DC 1 PK Supermarket PC PK PK CK SK

Supplier Production CK CK Supermarket DC 1 PK PK PK Supermarket PC CK SK

Supplier Production CK CK Supermarket DC 1 PK PK Supermarket PC PK CK SK

Supplier Production CK CK Supermarket DC 1 SK PK PK PK Supermarket PC

Supplier Production SK CK CK Supermarket DC 1 PK PK PK Supermarket PC

Supplier Production CK CK Supermarket DC 1 PK PK PK SK Supermarket PC

Supplier Production CK CK Supermarket DC 1 PK PK PK Supermarket PC CK SK

Components Additional comments Kanbans control the maximum inventory The maximum inv = # cards x Qty per card The minimum is 0 if all containers have been used and production/suppliers have yet to replace E-Kanbans Replaces the cards for “long distance” information flows Information from factory facility to supplier Between distant work-centers Kanbans must include date information as to maintain a constant number of cards Requires level production and stable demand (Heijunka)

Components Suppliers and global sourcing JIT sourcing requires willing suppliers that can deliver reliably and frequently while selling at a “fair price”, have a well designed transportation system/ strategy, possibly have production or warehousing facilities close by, are willing to collaborate in design of new products and share information about production plans.