KANBAN

1. KANBAN An LT6 Training Sesion

2. Course Introduction

3. 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 Kanban

4. Introduction 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 Kanban

5. Kanban Defined

6. 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

7. Kanban Defined Everyday Life Examples: • A signal to “replenish”….. • How is this a Kanban? Kanban

8. Kanban Defined Everyday Life Examples: • What do you think about when you see this? • How is this a Kanban? Kanban

9. Kanban Defined Everyday Life Examples: Any other examples you can think of ??? Kanban

10. Kanban Defined Work Examples: • A signal to “replenish”….. • How is this Kanban? Kanban

11. Why, Why Not Use Kanban?

12. 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

13. Kanban: Why, Why Not Poor Uses of Kanban…… • When easily scheduled • When cost of commodities is high • When usage is extremely variable • Low volume/high value commodities VS Kanban

14. Types and How They Work?

15. Empty Space Nearby Few parts Small batches Infrequent changes Empty Containers Proximity Kanban Cards Trigger Boards Complexity Far Away Electronic Many parts Large batches Frequent changes Virtual Kanban Kanban: Types and How They Work Types & Characteristics Kanban

16. Kanban: Types and How They Work 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

17. Kanban: Types and How They Work 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. Benefits?

24. 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

25. 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

26. 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

27. 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

28. Kanban: Benefits Facilitates Continuous Improvement Problems are a gift • 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

29. 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

30. How To?

31. 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

32. 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… • 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

33. Kanban: How To How To….. • 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 • 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)/CQ OQ = (CD X R)/CQ • Apply “smell test” Kanban

34. Kanban: How To How To….. • 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 KanbanCards • (Order When?…Every 1,000 used) • (Order How Many?.... 1,000 at a time) • 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

35. Thoughts

36. Kanban: Thoughts • Is PUSH ever an option? • Very Long Lead Times? • LEDs in Electronics • Product Development? • Administrative Operations? Kanban

37. 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

38. Q&A The End

39. Sources

40. Sources Information Sources: • Wikipedia • Superfactory.com • Toyota Way, Jeffrey K. Liker • Learning to See, Rother & Shook Kanban