Kanban and Lean Manufacturing - Part One

// August 25, 2017 //

In today’s highly competitive and challenging markets, companies need every available advantage to lower costs, lead-time and customer complaints. Manufacturers are adopting Kanban tools and lean manufacturing concepts because they improve quality, efficacy and performance.

“Muda”

Muda, the Japanese word for waste, symbolizes the ultimate goals of lean manufacturing: consistent flow, value stream and waste elimination. Waste is any tangible thing or intangible process that does not add value for the customer and company. The “Seven Wastes” include motion, or the movement of people and equipment, as well as queues, which refer to storage and idle wait times.

There are defective products, such as scraps, returns and warranty claims, and transportation waste, such as excessive handling and moving products between locations. Inventory waste can accrue through excess raw material, operating supplies and work-in-process (WIP). Over-processing lacks value and over-production creates unnecessary inventory.

Lean vs. Kanban

Lean manufacturing adopts a minimalist approach to producing goods through controlling and reducing waste, labor, space, inventory, and investment and engineering time. This heavily relies on structured teams, employee involvement and clear communication. Lean eliminates waste through identifying value and implementing conceptual tools for the entire organization to use.

Kanban is a succinct system that uses replenishment cards or signals to simplify inventory and streamline production management. The Kanban cards specify the details of what, when, how and where to make products. Kanban tools offer highly visible systems that are simple, effective and inexpensive. Kanban is an excellent way to improve lead-times and service quality while reducing inventory and stock-outs.

Kanban Types

For many Kanban processes, a specific and single-use card is employed. When a Kanban is empty, a replenishment signal is sent to the origin and a new Kanban is created. These signals may be electronically transferred through inserting cards, transferring via EDI and just printing out a new card. During the planning process, a production planner may create multiple Kanbans through duplication or fixed quantity rules.

Kanban schedule boards are designed to prioritize existing Kanbans. The traditional print method will display a priority attribute as a special icon in the Kanban board and schedule. Circulating Kanbans priority status are reset to normal when their card is returned to the origin in the next cycle. Priority Kanban’s that trigger the creation of component Kanban’s may automatically include the priority icon.

Kanban Schedule

The schedule sequences by jobs and focuses on avoiding overloads for specific production periods. When sequencing the Kanbans, there are usually two attributes that are linked to the job: the production period and the sequence within the period. A scheduled Kanban strategy is recommended to supply products that experience periodic or fluctuating demand.

Kanban planners calculate demand based on the actual demand and sales and supply forecasts. Scheduled Kanbans are commonly used for the creation of Kanbans based on minimum stock and in relation to the seasonal demand or supply forecast. Scheduling is used when the average batch size or product quantity is higher than the average demand or picking list.

Replenishment Strategies

There are two common replenishment strategies for pull systems: manufacturing and withdrawal. The first is assigned to a process that adds value, such as a specialized resource group. Manufacturing Kanbans have at least one process activity that is followed by a transfer or another process activity. A withdrawal is a single-transfer, non-value adding job that is used to transition a specific product between warehouses and manufacturing locations.

Fixed quantity Kanbans are ideal for areas that experience stable demand. The replenishment lead times of the requested quantity can be calculated based on the average daily consumption. These fixed quantity Kanbans are sometimes used to build stock because of low lead times and turnover rates.

Digital Kanban

The need for paperless Kanban systems has created manufacturing execution software that is used to support industry standard lean manufacturing methods. These solutions offer capabilities that are not available through traditional Kanban tracking methods, such as electronic reporting, status visibility and Kanban activity updates.

Old-fashioned, paper driven Kanban tools and methods sometimes create downstream production issues because of the need to manually keep the ERP up-to-date. While spreadsheets and similar tracking tools can fill in the gaps, they also contribute to human error. Digital Kanban tools that integrate with the ERP help to centralize purchase orders and manufacturing requisitions for immediate implementation. While spreadsheets and similar tracking tools can fill in the gaps, they also contribute to human error and introduce a new form of MUDA.

Part two will cover Kanban values, such as transparency and collaboration, and common agendas, such as service and sustainability. The foundational principles of Kanban, such as change management and service delivery, will also be explored.