By: Mangesh Sahasrabudhe

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Kanban-JIT-Oracle A relationship

• By Mangesh Sahasrabudhe
• Zensar Technologies Inc

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Agenda

• Objective
• About JIT
• About Kanban
• Where Does Oracle Fit In
• Setting up Oracle
• Oracle Kanban Process
• Case Study
• Q A

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Objective

• Objective of this presentation is to demonstrate
  how Oracle e-business suite supports JIT using
  Kanban Replenishment Process

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JIT Production Technique

• Just In Time production technique is aimed to
  minimize the inventory levels and increase
  inventory turns.
• Raw material is pulled into production as needed
  to meet the demand and the pulled material is
  replenished using a kanban replenishment process.
  
• The minimum amount of material, based on the
  replenishment Lead time is held at the line in
  kanban bins. As each bin is emptied, a signal is
  issued to replenish the bin and the next bin is
  used to pull the material.

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What is Kanban ?

• Kanban is tool which supports JIT production
  environment
• It is a process of pull based replenishments in
  manufacturing system is based on the Demand
  Source of Replenishment
• Kanban represents replenishment signals that are
  usually manual highly visible (e.g. Color Coded
  Card / Empty Bin etc)
• Two Bin Multi Bin Kanban System

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Where Does Oracle Fit In

• Following are the standard functionalities in
  Oracle which supports Kanban process
• Ability to create Kanban Pull sequences to
  replenish from internal/external sources
• Ability to calculate Kanban size
• Ability to simulate the changes prior to updating
  production Kanban
• Ability to compare kanban calculations between
  two separate plans
• Ability to generate and print Kanban Cards
• Auto-replenishment of Kanban cards
• Ability to view the current status of the card

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Setting Up Oracle

• Major Pre-requisites modular set up
  requirements for Kanban execution
• Inventory
• Item Attributes
• Inventory Planning Method
• Release Time Fence
• Item-Sub-Inventory Locator
• Inter-Org Shipping network / Sourcing Rule
  (Optional)
• Bills of Material
• Bill of Material of a Parent Item with the Child
  component as Kanban Item
• Flow Manufacturing
• Pull Sequences
• Kanban Plan

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Define Pull Sequence

• A Pull sequence is a group of information that
  represents,
• Kanban Location that models the actual
  replenishment network
• Source of Kanban Replenishment
• Kanban Sizing information
• Kanban Planning Parameters

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Define Pull Sequence

• Kanban Locations
• Item Subinventory Locator relationship
• Sources of Kanban Replenishment
• Supplier
• Inter Org
• Intra Org
• Production
• Kanban Size
• Calculate No of Cards
• Kanban size
• Planning Parameters
• Lead Time
• Allocation
• Lot Multiplier
• Safety Stock Days

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Define Pull Sequence
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Kanban Plan

• Oracle Provides flexibility to create any number
  of Kanban Plans to calculate the Kanban
  quantities based on the Demand Schedule
• All Kanban plans are tied up with specific Demand
  Type. These are,
• Forecast
• MDS
• MPS
• Actual Production

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Kanban Plan
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Oracle Kanban Calculator

• The standard Oracle Kanban calculation formula
• (No of Kanbans -1) Kanban size average daily
  demand lead time to replenish one Kanban (in
  days)
• (C - 1) S D (L SSD)
• Where,
• C is the number of Kanban cards
• S is the Kanban size
• D is the average daily demand
• L is the lead time (in days) to replenish one
  Kanban
• SSD is the Safety Stock Days

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Replenishment Methods
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Summary of Kanban Process

• Create Bill of Material
• Define Pull Sequence
• Enter a Forecast/MDS/MPS
• Define Kanban Plan
• Launch Kanban Plan
• Generate Kanban Cards
• Print Cards
• Initiate Replenishment Process

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Case Study

• Company ABC Inc
• End Product (Parent Item) KB-MFG
• Component (Kanban Item) KB-PO
• Subinventory Stores
• Kanban Source Type Supplier
• Lead Time 2 Days
• Safety Stock 5 Days
• Demand Type Forecast
• Kanban Plan KB-JIT

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Step 1 Create BOM
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Step 2 Define Pull Sequence
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Step 3 Enter Forecast
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Step 4 Define Kanban Plan
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Step 5 - Kanban Calculation

• (C - 1) S D (L SSD)
• Where,
• C is the number of Kanban cards
• S is the Kanban size
• D is the average daily demand
• L is the lead time (in days) to replenish one
  Kanban
• SSD is the Safety Stock Days
• (2-1) S 10(25)
• Kanban Size (S) 70

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Step 6 View Kanban Workbench
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Step 7 Kanban Card
KANBAN CARD    
Kanban Card 325 Kanban Type
Replenishable   Organization
M1   Item KB-PO Quantity 70 UOM
Each   Description PO ITEM   Source
Type Supplier Supplier Allied
Manufacturing   Supplier Site LOS
ANGELS   Destination Stores Locator   Prin
ted On 11-Aug-2003 Created On 11-AUG-2003
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Step 8 Replenishment
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Major Limitations

• Typically applicable only to the Items having
  relatively constant demand.
• Oracle Kanban process works only for Dependent
  Demand not for Independent Demand
• Process needs to be monitored on line for maximum
  benefits

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Questions Answers

• Questions Answers