What is Kanban Methodology
Once the operations are defined in the line design, the focus moves to the material to support the work at each operation. Kanban is the pull technique for the material pull system. Simply translated, Kanban is a communication signal or card to trigger a replenishment of material. This includes all purchased parts as well as internal fabricated components.
Kanban identifies the operation that consumed the material and the location where the material is replenished from.
Single Card Technique
As an example, when an employee empties a container of material, they can switch to a second container and continue to work. When they switched to the second container, a Kanban signal is transmitted to the materials replenishment team that an operation will need to be replenished. The materials replenishment team will make “milk runs” to pick up empty containers and replenish parts. Depending on the size of the plant, this replenishment cycle can be every few hours or once a day.
Material is replenished to the line from a nearby point-of-usage resupply area or from a supplier. Kanban also pulls from the resupply areas to the line or from our suppliers to the line once the supplier has met the stringent process capability requirements and delivery performance goals. The nearby point-of-resupply areas are replenished from suppliers or from a stockroom.
Kanban pull chains and sizing is based upon the characteristics of each part. As an example, two parts with the same quantity per product usage, can have different Kanban pull quantities. One is sized at about a two-day quantity and the other part which is considerably more expensive and fragile is sized at a two hour usage quantity. Kanban allows for a focus to be placed on each part.
Some parts may need to be controlled tightly, and other parts may be pulled less frequently. For example, copper tubes for heat exchangers might be pulled once a day, while rolls of heat insulation might be pulled twice a day. The copper tubes are more expensive; however, the insulation is large and takes up a lot of space on the line. This example is dictated by size, not cost.
Additionally, delicate parts can be pulled one at a time, even though they are not expensive. The line design determines the frequency a part is pulled, not a Bill of Material, kit, or sub-assembly structure as in scheduled production.
Kanban is sized one time at line design capacity. From that time forward, the same quantity lasts a little longer if the product volume fluctuates downward. If the product is dying or if the demand is skyrocketing and the line capacity needs to be increased, the Kanban sizing will be revisited. Kanban pull chains manage the replenishment of all material, internal to the production plant as well as the external supply chain. The Kanban pull technique eliminates the need for ERP work orders, kit picking and the associated thousands/millions of unnecessary computer allocations and inventory transactions.
In addition to the single card Kanban technique, there is also a dual-card technique for machines with long set-ups or run times. There is also a non-replenished Kanban for make-to-order or custom components and products.
Never Wall-to-wall Inventory
From a financial position, the day-one line design inventory plus the point-of-usage resupply inventory should target 50 turns per year. Manufacturers still need to take the next step to draw down raw and finished goods. Raw material requires working with the supply chain. Finished goods are targeted when a company drives manufacturing to demand, Demand-Based Management, (DBM) and Kanban pull eliminates production scheduling.