14 Kanban process

8/11/2019 14 Kanban process

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Lean Six Sigma Operational - Delegate Workbook

SSG06101ENUKMS Kanban//Issue 1.1/April 2008 1 The British Standards Institution 2008

Define

Pull Systems and the Use ofKanbans

2

SSG06101ENUKMS Delegate Slides/Issue 1.1/ April 2008

Learning Objectives

At the end of the course delegates will be able to:

Remember the key Principles of Lean and some of the key

terms used

Understand the concept of Flow in a lean system, itsimportance and how a Pull system facilitates flow

Understand the concept of Kanban and how it can be

applied to a process

Understand the advantages a Kanban gives and how a

simple Kanban system can be initiated


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Agenda

The Lean Principles

Maintaining Flow and the Use of Pull Systems

The Concept of a Kanban System

Implementation and using Kanban

Other Kanban related techniques

4


The Five Principles of Lean

Valueis always defined from the customers perspective

The Value Stream (and component activities)needed to

take a product (or service) from customer request to

completed delivery needs to be identified

Production or service activity should Flowthrough the

value stream without any delays

Pullscheduling so that product is made or a service is

provided only when the customer wants it is optimum

All forms of Wasteshould be continuously eliminated from

any process


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Review of Definitions

Value & The Value Stream value is quite simply the worth placedon something by the customer, usually in terms of money, ie would they

pay if they knew we were doing this?..., whilst the value stream is thesequence of steps (process) required to produce the product or service (orin other words value) being provided

Flow & Pull Systemsflow describes the (hopefully ) continuousmovement of products, services or knowledge through a process thereby

creating customer value., with a pull system it is the end customer whodictates the process speed, pulling their requirements through the valuestream as and when required.

Wasteanything that does not add value in the process when viewed

from the customers perspective (typically broken in to 7 categories;

transport, inventory, motion, waiting, overproduction, overprocessing and

defects)

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Maintaining Flow

When you turn on a tap at home what do you expect?

A clean consistent flow of water that is safe to drink, is not limited in quantityand is available when needed

Thats Flow!

If the water suppliers water filter or a pump breaks, thereby interruptingsupply, as a consumer we are not happy and very much treat it as someoneelses problem (our suppliers!). Also what would happen if we couldnt turnthe tap off?!?


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Flow in the World of Lean In Lean the idea of flow is applied to everything we do, including the design,

production and delivery of discrete products and services

Ideally from customer request to product or service delivery the item movescontinually through a series of value added steps unhindered and uninterrupted

But is the above possible and if so what would it entail?

Answer:

One item at a time processing or single piece flow

No excess inventory or batch sizes greater than one item

No defects or rework loops

No equipment breakdowns or stoppages

Is the above possible in its entirety? Maybe not, but the closer we get the leaner weare

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Pull Systems and KanbanOperation 2

Operation 1

Pull UnitsDemand Signal

PUSH

Pulling enables control of processes to be better with a reduction in inventory

PULL

When you to try to pull a length of rope what happens?

Uneven

pockets of

inventory

Operation 2

Operation 1


Operation 2

Operation 1


PUSH

Pulling enables control of processes to be better with a reduction in inventory

PULL

When you to try to pull a length of rope what happens?

Uneven

pockets of

inventory


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The Push System MentalityI dont know how many hewill order, so I make and Ikeep a stock. Just in case(Waste for the Supplier)

I dont take any risk of runningout, as you never know.....!! Doyou? (Waste for the Customer)

I dont know how many hewill order, so I make and Ikeep a stock. Just in case(Waste for the Supplier)

I dont take any risk of runningout, as you never know.....!! Doyou? (Waste for the Customer)

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and its Attributes

Traditional Batch System Production or Service Delivery might belikened to a meandering stream with a number of stagnant pools ofdiffering sizes). Recognise any of the following:

Remote production scheduling with constant rescheduling

A functional layout to the process, where the flow of activity if ever

mapped (production or service) takes on a boiled spaghetti likeappearance

Outputs of the process are pushed on to customer (or next activity)to maximise equipment or labour usage

High levels of inventory, large batch sizes and many perceivedbottlenecks

Waste and non-value add within the process not recognised(utilisation figures tend to dominate)


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and some more

Control culture where the manager is king

Inflexible and reactive quality control and inspection ethos

Low performance (often hidden) in cost, quality and deliveryperformance as a result of inconsistent and unpredictableprocesses

Poor (if any) housekeeping and little skills and employeedevelopment in place

Firefighting or sticking plaster mentality where people areworking hard (just to stand still)

Often secretive filtered communication in place

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The Pull System MentalityI know what he wants and when hewants it and thats what I supply

(Minimised waste for the Supplier)

If I can rely on my supplier, why doI need a safety net and excessstock? (Minimised waste for theCustomer)

Kanban a simple way to circulate information betweencustomer and supplier (internal or external) and to

synchronise production to consumption

Order 2

Order 2

The Customer/Supplier Contract - the customer expresses his need to the

supplier according to his consumption., whilst the supplier does not produce ordeliver to the customer until a signal is received for a specified need

I know what he wants and when hewants it and thats what I supply





Order 2

Order 2






Order 2

Order 2






Order 2Order 2

Order 2Order 2

The Customer/Supplier Contract - the customer expresses his need to the

supplier according to his consumption., whilst the supplier does not produce ordeliver to the customer until a signal is received for a specified need


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and its Attributes

Continuous Flow or Lean Production or Service Delivery mightbe thought of as a pipeline with rapid flowing water runningthrough it

Demand & consumption driven process with pull occurring fromthe point of use

Transparent and visible (easily understood) processes withunidirectional flow

Closely linked process stages, wherein an activities requirementsare delivered Just in Time (JIT) to point of use

Utilisation of equipment is based on process time, notmaximisation

Single piece flow potentially achievable

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and some more

Self managed team and empowered workers manage the process

Elimination of waste and non value add driven culture

Appropriate cell design for process undertaken

Proactive quality assurance culture, demanding robust processes,

standardised practices and good housekeeping

Team development and skill mapping thought to be key

Real time, simultaneous information leading to transparency for all

Which system would you prefer?


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Do the Pull Systems only apply inManufacturing? Lets (in pairs) think about some of the processes that occur in

your business and try and identify where you can recognise pushsystems in operation.

Inventory, waiting and queues (usually associated with abottleneck) are obvious pointers.

You can include paperwork and electronic processes (think pile ofpaperwork, e-mail inbox!), processes that transfer knowledge andinformation, as well as delivery processes can suffer.

Its not therefore all about processes that produce a tangible good.

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So a Kanban - What is it? - ADefinition The purpose of a Kanban is to act as an indicator for stock control and

replenishment based on preset, fixed re-order quantities and levels (for

anything you care to use the system for)

The physical manifestation of a Kanban (meaning signal) could be many

things a bin, pallet or container. In some cases a token, fax or some sort of

electronic signal is used As a short-term demand driven procurement execution tool the strength of

Kanban lies in its simplicity and so it should not be onerous to implement

The kanban card placed in

the stack indicates

replenishment is needed at

that pointRe-order

Quantity

The kanban card placed in

the stack indicates

replenishment is needed at

that pointRe-order

Quantity


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What a Kanban isnt!

A Kanban is not a complex and highly intelligent solution as its

very strength lies in its simplicity

A Kanban system should not prove difficult to implement and

demand huge additional resource (if any)

Implementing a Kanban system will not solve all of the

problems associated with a process, but it should help flow and

reduce waste

A Kanban is not a forecasting tool (as used in Push systems),

but a demand driven execution tool

Although heavily implemented in the East it is not a Japanese

or Oriental creation, nor should it be viewed as novel, new or

flavour of the month (Supermarkets have used it for years!)

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The Kanban System and One PieceFlow In a perfect world, one-piece flow (or having a batch size of one) is

optimum as it reduces inventory to the absolute minimum

It is demand driven and is facilitated by the introduction of a pull

system, which can in the longer term elevate the responsiveness,

flexibility and built-in quality of the process

Where one-piece flow is not possible Kanbans can be used to pull

the correct amount of units at the right time

Continuous improvement (and removal of waste) suggests that

there should be a continual goal to reduce inventory and therefore

batch/Kanban size towards the point that one-piece flow is

achieved


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Advantages of using a KanbanSystem

Greater customer satisfaction as they receive from theirsupplier exactly what is needed according to theirconsumption

Acts as an of inventory threshold (max/min) and helpsdevelop a fail safe supply chain with less stock outs that istuned to Takt Time

Frees up space for value add activities (stock levels are in

the current minimum required quantities)

Simplifies stocktaking, reducing the amount of labourneeded

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and some more

Simplifies logistics as a fixed lot size tied to the re-

order quantity allows for an order diary

Aids production predictability and allows for better

usage of SMED techniques and reliability (ofmachines) planning and improvement

Reduces administration and can facilitate a move

to paperless commerce eg a 2 bin system with

the empty box as the order, taken direct from

point of use


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Using a simple Kanban System (1)

Step 1 Operator takes from thenearest (pick side) containeruntil it is empty (two-bin

method where the empty binacts as a signal)

Pick

side

Load

side

Step 2 The empty container is moved to theempty container returns area

Empty bin

returns area

Step 3 The operator

pulls the full (loadside) container intothe nearest location

and continues to pickfrom that

Pic k side L oad

side

Empty Full

Empty FullEmpty

Full Full

Step 4 A full container, taken from thepick side of the feeder store is placedon the load side at the point of use

lllll lllll

Pick side Load sideFull

Step 1 Operator takes from thenearest (pick side) containeruntil it is empty (two-bin

method where the empty binacts as a signal)

Pick

side

Load

side

Step 2 The empty container is moved to theempty container returns area

Empty bin

returns area

Step 3 The operator

pulls the full (loadside) container intothe nearest location

and continues to pickfrom that

Pic k side L oad

side

EmptyEmpty FullFull

EmptyEmpty FullFullEmptyEmpty

FullFull FullFull

Step 4 A full container, taken from thepick side of the feeder store is placedon the load side at the point of use

lllll lllll

Pick side Load sideFullFull

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Using a simple Kanban System (2)Pick side Load side

Step 5 When the pick side of the

feeder store is empty the load side is

pulled across

lllll lllll

Step 6 A new order, sent

electronically to the supplier or

agent, is then triggered by swiping

the bar code (a Kanban -card

method that uses an e -card)lllll lllll

Pick side Load side

Big Parts Ltd.

Step 7 The replacement Kanban is

delivered and placed in the feeder

store on the load side

lllll lllll

Pick side Load side

Big Parts Ltd.Big Parts Ltd.

Pick side Load sideStep 5 When the pick side of the

feeder store is empty the load side is

pulled across

lllll lllll

Step 6 A new order, sent

electronically to the supplier or

agent, is then triggered by swiping

the bar code (a Kanban -card

method that uses an e -card)lllll lllll

Pick side Load side

Big Parts Ltd.Big Parts Ltd.

delivered and placed in the feeder

store on the load side

lllll lllll

Pick side Load side

Big Parts Ltd.Big Parts Ltd.Big Parts Ltd.Big Parts Ltd.


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Developing a Kanban System

Identify as productunit/ service type

numbers


numbers

STARTSTART

A. Identify thesupplier or location

for each unitnumber / service

step



step

B. Carry out theRRS/usage profileanalysis and select

the key unit /service step

numbers for theKanban pilot

B. Carry out theRRS/usage profile

analysis and selectthe key unit /service step


C. Ascertain thedelivery lead timeand the suppliers /providers and EOQ

/EPQ for eachselected unit /

service type number



service type number

D. Determine theROP and ROQ foreach unit number /service step andweeks / days of

cover


cover

E. Develop the futureprocess and

procedure, layoutand flow and carry

out risk analysis



out risk analysis

F. Train internalpersonnel and

consult/train therelevant suppliers



G. Implement andmonitor

performance


performance

First some Definitions: RRS Runners (frequent demand), Repeaters (regular demand) andStrangers (rare demand), EOQ - Economic Order quantity, EPQ Economic Processing

Quantity (for a service), ROP/ROQ - Re-Order Point and Quantities


numbers


numbers

STARTSTART



step



step

B. Carry out theRRS/usage profileanalysis and select

the key unit /service step


B. Carry out theRRS/usage profile

analysis and selectthe key unit /service step




service type number



service type number


cover


cover



out risk analysis



out risk analysis






performance


performance

First some Definitions: RRS Runners (frequent demand), Repeaters (regular demand) andStrangers (rare demand), EOQ - Economic Order quantity, EPQ Economic Processing

Quantity (for a service), ROP/ROQ - Re-Order Point and Quantities

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Kanban Rule 1

The downstreamprocess pulls therequired unitsfrom the upstreamProcess in the

agreed quantitiesat the appropriatepoint in time.

Part:

a

1box

Part:

a

1box

Part:a

1 box

The card says 1 box,so the others stay here.

Part:

a

1box

receiving


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Kanban Rule 2

The upstreamprocess producesor delivers itemsonly in thequantitieswithdrawn by thedownstreamprocess. Thisis indicated by thenumber of Kanbancards in theirreceiving tray).

There is one more kanban card here, soI need to make one box more

receiving

Part:

a

1box

Part:

a

1box

There is one more kanban card here, soI need to make one box more

receiving

Part:

a

1box

Part:

a

1box

There is one more Kanban card here, soI need to make one box more

receiving

Part:

a

1box

Part:

a

1box

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Kanban Rule 3

Nothing is transported orproduced without a Kanbandemand signal. This helpsin preventingoverproduction and

excessive stocks and / ormovement of goods. NoteKanban can be used toregulate delivery & flow orwhether an actual VAoperation takes place.

receiving

Part:

a

1box

Part:

a

1box

There are no more cards, so I

need to stop producing.


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Kanban Rule 4Kanban cardsalwaysaccompany theitemsthemselves asthey also serve

as anidentificationtag authorisingthe need for theitems.

Part:

a

1box

Part:

a

1box

Part:a

1 box

Part:a

1box

receiving

This is the correctbox of parts accordingto the information onthe withdraw Kanbancard

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Kanban Rule 5

This units defective.It needs to be fixed

beforeit moves on.

Part:

a

1box

Part:

a

1box

Part:

A

1box

Defectives arenever passed onto thedownstreamprocess and

every item mustbe of anacceptablequality.


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Kanban Rule 6

The Kanbanbatch size andnumber ofKanbans shouldbe minimisedwhere possible,thereby reducingtotal throughputtime and the cost

of inventory.

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:a

1 box

Reduced Kanban sizemeans less inventory

and quicker throughput times!

Part:

a

1box

receiving

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:a

1 box



Part:

a

1box

receiving

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:a

1 box



Part:

a

1box

receiving

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:

a

1box

Part:a

1 box



Part:

a

1box

receiving

Part:

a

1box

Part:

a

1box

Part:

a

1boxP

art:a

1box

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Typical Information on a KanbanCardA Kanban card, which acts as a signal, is acommunication device and therefore holdssome key information about the item involvedand supplier & customer.

The number of items in thecontainerItem Reference NumberThe Supplier & CustomerThe number of the card(alphanumeric & barcode)

The number of items in thecontainerItem Reference NumberThe Supplier & CustomerThe number of the card(alphanumeric & barcode)


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How will Kanban Batch Size beCalculated? The demand profile for each unit or service element is investigated taking

account of historical needs and/or future forecasts of requirements

A weekly or monthly demand profile is created, which must include any fallout due to poor quality (as a contingency)

In the case of a product each container will hold a certain period of stock.

Multiple containers, or a number of Kanbans (each with a card), willpotentially hold days or weeks of stock when full

In a service environment we may think of number of items that can or arehandled economically and in good time in a process step as stock for thatstep to process

In a product driven environment an interim target for a stock level ofbetween 6-7 weeks is not unusual, giving a stock turn of Kanban items of 7to 8 weeks typically

Note: You will never get Kanban sizing exactly right.Its a balancing act between keeping yourstocks low and never letting your customers down. But you can tackle and refine it gradually - PeterVarnsverry

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Calculating the Number ofKanbans Needed Kanban size typically refers to the number of items associated with each

Kanban (affected by process type, EOQ and logistics).

The number of Kanbans (or cards) needed has to be calculated.

Although over time this number should be reduced leading to a reduction ininventory. The calculation is:

Number Required is equal to:

(Average Demand per Unit Time) x Total Supply Time (Order to Delivery) x 1-Buffer Time (always


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How is a Kanbans PerformanceMeasured?Some examples are given below:

Number of stock outs over a given period.

Number Kanban demands triggered over a particular timeperiod: This will give a measure of a Kanbans logisticalaccuracy ie ROP, ROQ and Safety Stock and any changingmarket demand in terms of RRS.

Supplier Response Time or Total Supply Time: The totaltime from when the demand was sent until the receipt of the

total quantity of the requirement. Agreed prior to systemlaunch in order to calculate the number of Kanban cards.

The level of quality typically achieved, eg, ppm, yield, sigmalevel.

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Use of a Kanban Schedule Board

When Kanban cards are received fromcustomers they are put in the slotsfrom top to bottom

Each column & number represents adifferent item that will be required (inmulti-item scenarios, level schedulingor Heijunka (a little of everything everyday) is applied

The Green & Red Zones give thenumber of Kanbans that are held,whilst the Red Zone signifies when anitem is almost out of stock (safetyzone) and should be prioritised

The board allows the real consumptionof the customer to become clearlyevident as it does the amount of Workin Progress (WIP)

21 3 4


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Use of a Supermarket toControl Inventory

The board can be replaced by asupermarket where processconstraints prohibit continuous flow(eg where one supplier servicesmany value streams)

The supermarket is owned by thesupplier and acts like a corner shopgrocery in that every item has afixed location and amount.

The Kanban signal is effectivelywhen the customer makes apurchase suggesting upstreamreplenishment should be started

Supermarkets should be carefully

located to minimise transport waste

Strict policing of locations andquantities of stock held aremaintained

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Summary

One piece flow is demand driven (pull system), and uses batchsizes of one versus a forecast and plan oriented production system(push system) that uses larger batch sizes

From a Lean viewpoint one-piece flow is optimal as inventory isreduced as is cycle time

One piece flow is not always possible, in which case a Kanbansystem should be considered

Differing types of Kanbans exist, for example some trigger anoperation (production) and others trigger the movement of stock(flow)

In Lean the goal is always to reduce inventory by reducing numberof Kanbans

Documents

14 Kanban process