Kanban Replenishment system

Dr A Prabukarthi
Assistant Professor
Department of Mechanical Engineering
PSG College of Technology
 Supply Scheduling Decision
• Methods of scheduling
A. Just-in-time concept
B. Material requirements planning (MRP)
C. KANBAN
 KANBAN

• Toyota’s method of scheduling using the order

point inventory control procedure, but with very
low setup costs and very short lead-times
 KANBAN system

• Kanban systems are known to improve flow. In

knowledge work, today, Kanban systems
predominantly focus on the steady flow of work.
• System Kanban starts from the point of committed
work (i.e. a work item that is “Ready to start”), and
ends at a point just before delivery to the customer
(typically a work item that is “Ready for Acceptance”).
 Types of Kanbans
• Square Kanbans
– Marked area designed to hold items
• Signal Kanban
– Triangular kanban used to signal production at the
previous workstation
• Material Kanban
– Used to order material in advance of a process
• Supplier Kanbans
– Rotate between the factory and suppliers
Contd.
• Sandy is asked to produce 250 squidgets an
hour. It takes 30 minutes to receive the
necessary material from the previous
workstation. Each output container holds 25
squidgets. The factory currently works with a
safety factor of 10%. How many kanbans
should be circulating between Sandy’s process
and the previous process?
d = 250 / hr
L = 30 minutes = 0.5 hours
S = .1 X 250X.5 = 12.5
C = 25

= 5.5 Kanbans or containers

 PROBLEMS
PROBLEM 1:
Bryant Electronics produces short runs of battery-powered
pocket lanterns. You have been asked to reduce inventory by
introducing a kanban system. After several hours of analysis you
have developed the following data for connectors used in one
work cell. How many kanbans do you need for this connector?
• Daily demand 1,500 units
• Production lead-time 1 day
• Safety stock 1 day
• Kanban size 250 units
SOLUTION(PROBLEM 1)
PROBLEM 2:
Perkins Lighting wishes to employ a kanban in their
new floor lamp production system. For the floor lamp
base, they have provided the following information:
Daily demand 300 units
Holding cost $20/unit/year
Order cost $10/order
Lead time 2 days
Safety stock 2 days
Find the size of the kanban and the number of
kanbans required.
SOLUTION(PROBLEM 2)
 ESSENTIAL ELEMENTS OF
KANBAN
• STOCK POINTS
• WITHDRAWAL SIGNAL
• IMMEDIATE FEEDBACK
• FREQUENT REPLENISHMENT
 FUNCTIONS OF KANBAN
• PROVIDES PICK UP INFO
• PROVIDES PRODUCTION INFO
• PREVENTS OVER PRODUCTION
• SERVES AS WORK ORDER ATTACHED TO
GOODS
• PREVENTS DEFECTS BY IDENTIFYING PROCESS
MAKING THE DEFECTS
• MAINTAINS INVENTORY CONTROL
 How Kanban systems work
• Applies the basic principles of synchronous
management.
• Principle 1: Do not focus on balancing capacities,
focus on synchronizing the flow.
• Principle 2: The level of utilization of a non-
bottleneck resource is controlled by other
constraints within the system.
• Principle 3: Resources must be utilized, not
simply activated.
• Principle 4: A transfer batch may not, and
many times should not, be equal to the
process batch.
• Principle 5: A process batch should be
variable both along its route and over time.
 Why consider kanban control?
• Lower inventory investment
• Better “customer” service
• Reduced administrative costs
What makes kanban control different ?

• Kanban is “pull” based – driven by actual

usage not forecasts.
• Kanban replenishment is simple.
 Benefits of Kanban
• Primary
– Eliminate over-production, the #1 waste
– Produce only what is ordered, when ordered,
& quantity ordered
• Secondary
– Increase flexibility to meet customer demand
– Reduction in scheduling by Production
Control & Manufacturing
– Competitive advantage by sequencing
shipments to customers (what they want,
when they want it, in the order they want it!)
Enabling Lean Manufacturing with
E-Business Suite Electronic Kanban
 Oracle Electronic Kanban
Point of Supply
! Signal via electronic
Point of Use
visual cues

Inventory Mfg / Assembly

Production Kanban Setup

Floor Stock

Supplier Kanban Kanban

Planning Execution

Staging Zone
Feeder Plant

 Optimize inventory levels  Increase inventory and supply chain  Improve labor efficiency
 Minimize procurement spend visibility  Reduce system complexity and
with demand driven planning  Achieve real-time responsiveness for integration cost
and execution greater agility
 Oracle Electronic Kanban Features Summary

 Enhanced User Interface

 Key Performance Indicators
 Card Replenishment Order
Consolidation
 Automatic Replenishment of Cards
 Enhanced Kanban Planning
 Temporary Kanban Cards
 User Defined Card Statuses
 iSupplier Portal Integration
 APIs, Extensions & Business Events
Oracle Electronic Kanban Key Performance Indicators

Red, Yellow, Green Indicators for

• Inventory Health
• Actual vs Planned Lead Time
• Actual vs Planned Demand
& Unmoved Cards
Oracle Electronic Kanban KPI Context

Dashboard contextualized for

• Planner B’s Items
• or Buyer A Items
• or Inter Org Items only
• or Production Items only
 Day in Life of Kanban Planner

• Identify Items with Bad Inventory Health

• Diagnose Reason for Bad Health

Diagnosis Possible Resolution

• Has demand increased ? Replan and add Cards
• Has lead time increased ? Replan and add Temporary Cards
• Are there unmoved cards ? Contact Supplier to Expedite
 Day in Life of Kanban Planner

• Bad Health: 1 item

• Good Health: 5 items
• Warning: None

Step 1
Review Inventory Health KPI
Day in Life Kanban Planner

Step 2
Review
Inventory Health
Details

• Item: Kanban_Item9
• Health: Red
• Number of Cards: 7
• Cards Full: 2
• Cards In Process: 5
Day in Life Kanban Planner

Step 3
Review
Actual vs Planned
Demand

Demand for past 1 month

• Actual < Planned : 2 Items
• Actual > Planned : 4 Items
• Actual = Planned with 10 % tolerance: None
Day in Life Kanban Planner

Step 4
Review Actual Demand Details

Navigate to
Planning Tab

• Item: Kanban_Item9
• Planned Demand: 10
• Actual Demand: 16
Day in Life Kanban Planner

Step 5
Click
Replan Number of
Recalculate
Cards

Change Average Daily

Demand: From 10 to 16

Horizontal Plan:
Card Status Simulation
for next 30 days
Day in Life Kanban Planner

Step 6
Update Production

Recommended Number of
Cards: 11

Optionally Enter
• Plan Effective Date
• Number of Temp Cards
 Oracle Electronic Kanban Enhanced
Kanban Planning

• No dependence on flow routing

• Plan effectivity date
• Automatic cancellation of cards
• Item / Point of Use level planning
• Plan using user defined attributes
• Horizontal plan simulation
Oracle Electronic Kanban Replenishment

Scan Multiple Cards … Automatic Actions

• Cancellation of cards per

planning planning
recommendation

• Re-issue of cards when

attributes changed - eg
size, supplier

• Temporary Cards
retirement

… and Apply
Oracle Electronic Kanban Receipt

• Scan friendly screen

• Card based receiving

instead of PO based

• Partial Receipts
allowed
Oracle Electronic Kanban Embedded Analytics

Inventory Health

Unmoved Cards
Oracle Electronic Kanban iSupplier Portal Integration

New Kanban Tab

Oracle Electronic Kanban Setup

Replenishment Chain
 Oracle Electronic Kanban Setup Multiple Suppliers

Multiple Suppliers
 Key Electronic Kanban Features
Functionality Previous New E-
Kanban Kanban Functionality Previous New E-
Kanban Kanban
Manufacturing mode
Usability
Support for flow manufacturing
planning View pull sequences and kanban cards
Support for discrete manufacturing in one UI.
planning
Scan and transact kanban cards in one
Planning capabilities UI.
Current date
Update production for a future date only View pull sequence plans and horizontal
Plan for dependent demand plans in one UI
Plan at the individual pull sequence Configurability
level
Update planning data on the fly Configurable custom card supply
Horizontal planning statuses
Card Management Configurable “Full” card supply status
Supplier, inter-org, intra-org and tolerance
production kanbans
Logical kanban support with auto- Alerts and Notifications
replenishment
Temporary cards with max cycle Configurabl
Alerts and notifications Limited e
counts and disable dates
Replenishment order consolidation Dashboard and Analytics
Multiple suppliers on 1 supplier
kanban Configurable dashboard and analytics
Security
Secure access to kanban pages by
responsibility Limited
Integration/Collaboration
Integrates with iSupplier Portal
Extensibility
Customizable solution with provided Limited
Extensive
extensions
Thank You