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28th International Conference on Flexible Automation and Intelligent Manufacturing
28th International ConferenceJune
(FAIM2018), on Flexible Automation
11-14, 2018, and Intelligent
Columbus, OH, USA Manufacturing
(FAIM2018), June 11-14, 2018, Columbus, OH, USA
Cloud Kanban Framework for Service Operations Management
Cloud Kanban
Manufacturing Framework
Engineering for Service
Society International Operations
Conference Management
2017, MESIC 2017, 28-30 June
2017, Vigo
a (Pontevedra), Spain
Krishnan Krishnaiyer *, F. Frank Chen , Hamed Bouzarya
a
Krishnan Krishnaiyera*, F. Frank Chena, Hamed Bouzarya
Costing models for capacity optimization in Industry 4.0: Trade-off
The University of Texas at San Antonio, 1 UTSA Circle, San Antonio, TX,78023 USA
a

The University of Texas at San Antonio, 1 UTSA Circle, San Antonio, TX,78023 USA
a

between used capacity and operational efficiency

Abstract
A. Santanaa, P. Afonsoa,*, A. Zaninb, R. Wernkeb
Abstract
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Keywords: Kanban, Cloud-based Service Operations Management,Ant Colony Optimization
contributions from both the practical and theoretical perspectives. This paper presents and discusses a mathematical
Keywords: Kanban, Cloud-based Service Operations Management,Ant Colony Optimization
model for capacity management based on different costing models (ABC and TDABC). A generic model has been
developed and it was used to analyze idle capacity and to design strategies towards the maximization of organization’s
1. Introduction
value. The trade-off capacity maximization vs operational efficiency is highlighted and it is shown that capacity
1. Introduction
optimization might hide operational inefficiency.
Cloud based consumption of technology resources and services are essential part of the next generation of service
© 2017 The Authors. Published by Elsevier B.V.
operations
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Keywords: Cost Models; ABC; TDABC; Capacity Management; Idle Capacity; Operational Efficiency

* Corresponding author.
1.E-mail address:author.
Introduction
* Corresponding krishnankrishnaiyer@gmail.com
E-mail address: krishnankrishnaiyer@gmail.com
2351-9789 © 2018 The Authors. Published by Elsevier B.V.
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Peer-review under responsibility of the scientific committee of the 28th Flexible Automation and Intelligent Manufacturing (FAIM2018)
* Paulo Afonso. Tel.: +351 253 510 761; fax: +351 253 604 741
Conference.
E-mail address: psafonso@dps.uminho.pt

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(FAIM2018) Conference.
10.1016/j.promfg.2018.10.093
532 Krishnan Krishnaiyer et al. / Procedia Manufacturing 17 (2018) 531–538
2 Author name / Procedia Manufacturing 00 (2018) 000–000

them to continuously manage and improve their work. In Japanese, the word “Kanban” means a visual board or visual
display. The applications can be classified in two major categories (1) Manufacturing Focus – for inventory
optimization [2-5] and (2) Information Technology Focus – for managing software development [6-13]. There is a
growing need to leverage both the inventory control and the visualization aspects of Kanban, in-service operations.
Johnston [14] paints the picture of interlinking Operations Management, Marketing, and Human Resource
Management in the four stages of Service Operations Management (SOM). In the next evolution of SOM,
organizations are moving their production and consumptions of resources into “as-a-service” model. This movement
is accelerated by the exponential advancement of technologies. One such enablers is the cloud-based systems. For
organizations to embark on “as-a-service” model, particularly a cloud-based operation, there are multiple challenges
presented, such as scale, model, service availability and Total Cost of Ownership. Cornel Levy, [15] highlights small
office/home office businesses perception of cloud services by a qualitative study indicating that the users do not
understand the reliability of these services on their business growth. In this paper we propose, a cloud-based Kanban
framework for SOM augmented by an Ant Colony Optimization (ACO) decision support system. We first start with
a brief literature review of Kanban and its use, advantages and dis-advantages, followed by the overview of the cloud
Kanban model and ACO. The next section covers the implementation process of the cloud-Kanban process followed
by results and conclusion.

2. Literature Review

One of the key tools that form the foundation of Value Stream Mapping (VSM) is Kanban. It is used to control
work-in-process (WIP) inventory levels. In the production and operations world, there exist various types of Kanban
and optimization approaches. Junior and Filho [16] presented a broad classification of the different adaptations of
Kanban along with their relative strengths and weakness[16]. The original concept of Kanban has four components:
(1) use of two communication signals (dual card Kanban system), (2) pulled production, (3) decentralized control, and
(4) limited WIP [16]. Silva et al. [17] provide a DMAIC (Define, Measure, Analyze, Improve, Control)
implementation for a constant order-cycle system, also known as a milk run Kanban systems [17]. In their DMAIC
based approach, they highlight that a successful design of Kanban system is dependent on various factors (such as
route time, and number of boxes that are beyond the production workstations), and therefore needs continuous system
enhancements [17]. In a production Kanban system, where there is a decoupling point to separate the inventory
supermarket from the workstation. The transfer of inventory happens via the signals to withdraw or to produce parts.
Resent research of the Kanban supermarkets considers a typical Kanban card system [18]. Lolli et al. [19] propose a
Matlab™ based simulation approach to reducing the total daily cost (inventory cost and the operator cost for line)
along with providing 100% service in a multi part-feeder Kanban supermarket. The supermarket loads two inline
feeders with dead freight. The simulation helps to pick the best scenario with least total cost [19]. A condition-based
preventative maintenance process uses a Kanban system with a continuous-time Markov chain model [20]. Based on
a different inspecting schedule, an augmented lagrangian genetic algorithm and a brute-force procedure were used to
solve the model that strives to optimize the Kanban policy, preventative maintenance policy [20]. A typical 2-stage
Kanban system with two-card Kanban system used one card for finished parts and one card to control the Work In
Process (WIP). The monthly plan from the customer is translated into a daily plan for a supplier, who delivers the
materials once a day to meet the client's demand [21]. There are various models of Kanban used in operations
engineering. A Petri net to integrate purchasing, production and packaging were developed using LINGO
software[22]. In campaign manufacturing environments where the setup time varies drastically between products, a
discrete event simulation based Kanban model is proposed that has successfully implemented in a self-medication mid
volume pharmaceutical production process [23]. A Kanban system was used to minimize the total inventory cost in a
hypothetical Just-in-Time (JIT) multistage production system [24]. A multi objective genetic algorithm was proposed
to optimize the Kanban number and size in JIT system, hence minimizing the total WIP inventory [21]. Various
performance measures, such as a number of cards or throughput are used to determine the efficiency of a Kanban
based production process [25]. Utilizing Petri net theory, the deadlock issues in a Kanban can be analyzed [26]. A
knowledge Kanban model is proposed to improve knowledge flow efficiency of a virtual enterprise research and
development process [27].
 Krishnan Krishnaiyer et al. / Procedia Manufacturing 17 (2018) 531–538 533
Author name / Procedia Manufacturing 00 (2018) 000–000 3

One of the most recent adaptations of Kanban is the field of software development [28-31]. Nakazawa and Tanaka
[32] propose the use of Kanban as task boards for agile software development to track “issues,” “backlog,” “to-do,”
“doing,” “review,” and “done” activities for small projects. A survey on the effectiveness of their web-based Single
Page Application (SPA) Kanban reported a 20% increase in the motivation for software developers to complete their
task. Another type of Kanban used in the software industry is the Open Kanban, based on five principles of “respect
for people, courage, focus on value, communication, and collaboration, holistic or systemic approach to change” [33].
Faria de Souza et al., [34] combines Kanban and business process modeling notation to monitor the software
developers progress in the developmental of distributed software. A conceptual Kanban scheduling system for system
of systems is proposed to manage work queues across large enterprise-wide projects [35]. It also introduces a concept
of classes of service, a JAVA based prioritization algorithm to simulate and schedule the work across various
stakeholders [35]. Heidenberg and Porres [36] proposed a theoretical process metrics based approach called Kanban
guards that acts as a decision support system to enhance the software quality. Hui [30] proposes an enterprise Kanban
model using Kotter’s eight principles and the minimum viable changes for managing agile teams. Utilizing
ServiceNow ™ software, a Kanban based approach was implemented to reduce the backlog and improve Service
Level Agreement (SLA) of security risk assessment in an e-commerce business[37].
Disadvantages of a Kanban systems, when used to control inventory, is the lack load balancing capabilities [38].
In a vintage flow shop where there are a high variety and significant time variability of the job, an alternative system
called control of balance by card-based navigation help to control the work [38]. In production situations where there
is significant variation in demand and has multiple products a shared Kanban allocation policy is proposed [39]. There
are many disadvantages of using paper Kanban, including unfriendliness to the information system, complex to
maintain for a small production run, and not being real-time [40]. E-Kanban systems store information that is
transmitted between suppliers to reduce cost and control WIP [41, 42]. They are developed to overcome the challenges
of managing paper/card-based systems, where there is a situation of lost cards and manual errors [41-46]. An eight
step implementation framework with critical successes factors at each stage is provided to address the operational
issues of implementation of such system [47]. The chief benefits of the e-Kanban are its ability to integrate with the
existing ERP system and provide a visual interface [40].

3. Cloud Kanban (CK)

3.1. Overview

We define Kanban – as a visual tool to monitor and control resource consumption and production of an enterprise.
Figure 1 shows the six foundational elements of the Cloud Kanban framework. (1) The Service Plan is the license key
for the system that determines the size and scale of the system. (2) The database holds the needed production, and
planning data. Based on the application need the database server can be configured. (3) The Application Server is the
cloud-based server that has all the web pages and items. (4) The Active Directory (AD) forms the base of user
authentication. This layer eliminates the need of separate user name and password for the application access. The end
users can log in via the organization’s email credentials. (5) The User Interface is the front-end screens for end user
interactions that contains the menu, and buttons. (6) Finally, the Logic is the Business Logic encompass the needed
business rules to accomplish the data entry and reporting tasks. All these six elements of the cloud model can be
switched on and off, scaled up and from any modern web browsers. In our example, our active directory was
user@cloudkanban.onmicrosoft.com, the database was a Microsoft SQL server, App service was Microsoft Azure
Web Service, Service Plan was Microsoft Imagine, the User Interface was built in Model-View-Controller .Net
Framework and the business logic was written in c#.

3.2. Ant Colony Optimization

Figure 2 the five steps of the Ant Colony Systems (ACS) algorithm. The five stages are (1) Input Stage – Captures
the parameters for the algorithm, (2) Initialization – Computes the job volume due date matrix, calculates the tour
length, initiates the pheromone matrix, (3) Ant Generation – Ants are randomly generated and placed in the location
and the tour array matrix is initiated, (4) Ant Walk – Ants are moved from one node to another based on the local
4 Author name / Procedia Manufacturing 00 (2018) 000–000
534 Krishnan Krishnaiyer et al. / Procedia Manufacturing 17 (2018) 531–538

Figure 1 Cloud Kanban Framework

pheromone update. When the tour is completed the total completion, time is calculated, and the global pheromone is

Figure 2 Ant Colony System [48]

 Krishnan Krishnaiyer et al. / Procedia Manufacturing 17 (2018) 531–538 535
Author name / Procedia Manufacturing 00 (2018) 000–000 5

updated. Top three best path for the iteration is stored. (5) The four steps above are repeated until the maximum
iteration is reached and the best path is computed and displayed.

4. Implementation

In a typical service, there is a job order that constitutes multiple activities. The first step is to build the estimated
total amount of the job and individual activities with the job. For all the activities (n=1,2,3 to N) for the job, an
estimated amount per shift (s =1 to 3) is build. The amount per shift estimate is computed based on the “Standard Rate
Per Hour” (SRPH) for the activity. The second is to establish a rough-cut schedule. Typically, a “Capacity Vs.
Requirement” analysis is done based on existing resources. Various factors such as number of machines available,
number of employees and raw material availability. The third step is a decision support system simulation. For priority
jobs, an Ant Algorithm based simulation is run to understand the optimization feasibility of the rough-cut schedules.
Based on the results, if needed, fine tuning of rough cut schedules is performed. The fourth step is to gather the actual
production quantities. The labour hours used, number of bad quality product and production hours lost due to down
time is also entered. Over time production data gathered helps to refine and set SRPH. The final step is the display the
job and activity progress based on the Estimated Actual and Total Kanban system [48].

5. Results

Figure 3 shows the Microsoft Azure Architecture. Based on the Figure 1 the AppService, Microsoft Azure SQL server
and the Active director is configured. It also depicts the Service Heath of the system that can be easily monitored for
any updates and maintenance. Figure 4 shows the cloud-based Kanban system main menu. The Kanban decision
support system has features for entering production data and has an ACS based simulation for the schedulers to

Figure 3 Microsoft Azure Architecture

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6 Author name / Procedia Manufacturing 00 (2018) 000–000

validate their rough-cut capacity planning. Three are seven modules (Production, Scheduling, Performance Indicators,
Decision Support, System Setup, Quality and Customer Service) in the system. These can be completely customized
based on the user roles. The sample run of ACS in the cloud infrastructure showed promising results. Marked
difference is the reduction in computing time for the benchmark Burma 14 Travelling Salesman Problem (TSP) was
noticed. The run time to obtain the best path with 200 iterations was 1.16 seconds compared to 6 seconds in legacy
systems.

6. Conclusion

The research shows that the cloud-based Kanban performs much better and faster than the traditional systems. CK
provides flexibility to scale as demand grows thereby reducing the Total Cost of Ownership. The ACS provided a
robust decision support system. This research work is part of a larger research project at The Center for Advanced
Manufacturing and Lean systems at The University of Texas at San Antonio, TX

Figure 4 Cloud-Kanban

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