Title: Kanban Replenishment for All Types of Industries
1- Kanban Replenishment for All Types of Industries
- (Manufacturing Non-Manufacturing)
Tom Brown Colibri Limited Roswell, Georgia
2Why consider kanban control?
- Lower inventory investment
- Better customer service
- Reduced administrative costs
3What is kanban control ?
- A method of Just-in-Time inventory replenishment
that originated in Japan. - Kanban techniques can be used by both
manufacturingand non-manufacturing orgs - Kanban systems can be
- 100 manual
- 100 Oracle
- A hybrid of Oracle and manual techniques
- Non-manufacturing organizations will likely want
to use a hybrid approach
4What makes kanban control different ?
- Kanban is pull based driven by actual usage
not forecasts - Kanban replenishment is simple
?
5Kanban Systems
- Can use different methods to trigger
replenishment activity - kanban cards are the most common
- kanban containers are frequently
- bar coding of cards / containers helps when
automating kanban systems
6Kanban Systems
- Not suited for all inventory items look for
- items with frequent usage
- items with short lead times
- items with willing suppliers
7Replenishment Flow for Kanban Cards
When container is empty, signal sent to source
to replenish kanban
Wait until minimum order quantity is reached
Planner determines when to add / remove cards
When received, kanban status is updated and
container is moved to usage area
When order minimum is reached, a Job, PO, or Move
Order is created
8Oracle Kanban Flow for Manufacturing
Kanban replenishment auto- creates Purchase
Requisition
Supplier Kanbans
AutoCreate PO or Blanket Release
Blanks Sub-Inv
Supplier
Paint Op
Press Op
Assembly Sub-Inv
Assembly Line
Finished Goods
Production Kanbans
Kanban replenishment autocreates WIP Job
Material Flow
Kanban Flow
9Oracle Kanban Flow Non-Manufacturing
Kanban replenish auto-creates Purchase
Requisition
Purchasing Creates PO or Blanket PO Release
10Pull Sequence
1. Setup a pull sequence to define Source,
Replenishment, and Planning Parameters
11Kanban Cards
2. Add kanban cards associated to the pull
sequence
123. Set supply status of each card
automatically updated by transactions
13Determining the number of kanban cards /
containers needed for each item
- An item has a 2 day lead time (when a kanban is
emptied it will take 2 days to refill it)
- An item has a 2 day lead time (when a kanban is
emptied it will take 2 days to refill it)
- Average daily usage of the item is 50 per day
- You will need 100 within the replenishment lead
time (average daily demand times lead time)
- Thus, you need to activate 5 kanban cards (demand
during lead time divided by kanban size)
14Kanban Plans
15Oracle Kanban Planning Assumptions
- Constant rate of demand
- While average daily demand is 50 per day, what
is the maximum daily demand? - Constant lead time
- While average lead time is 2 days, what is the
maximum lead time?
How can you account for these variances in demand
and supply when planning kanban inventory?
16Kanban Planning Using MS Excel
Determine which items are good candidates for
kanban control
17Kanban Planning Using MS Excel
Determine number of kanbans to activate
18Types of Kanbans Used by Oracle
- When the supply status of a kanban card changes
to empty, it triggers transactions that pull
material from different sources and locations. - Four types of kanbans are available
- Inter Org Triggers creation of an internal
requisition - Intra Org Triggers creation of a
subinventory transfer - Production Triggers creation of a discrete job
(released status) - Supplier Triggers creation of a purchase
requisition (approved status)
19Card Status versus Supply Status
- Card Status
- Active kanban card is in the replenishment
chain - Hold card temporarily removed from
replenishment chain - Canceled card permanently removed from
replenishment chain
- Supply Status
- New kanban just created and not yet part of
replenishment chain - Empty kanban is empty and replenishment signal
has been generated - impacts Inter-Org and
Supplier source types - Full kanban has been replenished and material
is available for use - Wait kanban is waiting for minimum order
quantity to be met by the aggregation of cards. - Inprocess For the Supplier source type, PO has
been approved. For Inter-Org source type,
internal requisition has been approved