KanbanKanban1.1. User removes a User removes a

standard sized standard sized containercontainer

2.2. Signal is seen by Signal is seen by the producing the producing department as department as authorization to authorization to replenishreplenish

Part numbers Part numbers mark locationmark location

Signal marker Signal marker on boxeson boxes

Kanban SignalsKanban Signals As a customer “pulls” an order from finished goods, As a customer “pulls” an order from finished goods,

a signal (card) is sent to the final assembly areaa signal (card) is sent to the final assembly area

The final assembly area produces and resupplies The final assembly area produces and resupplies finished goodsfinished goods

When final assembly needs components, it sends a When final assembly needs components, it sends a signal to its suppliers, a subassembly area and a signal to its suppliers, a subassembly area and a work cellwork cellThese areas supply final assemblyThese areas supply final assembly

The work cell, in turn, sends a signal to the raw The work cell, in turn, sends a signal to the raw material supplier and the subassembly area notifies material supplier and the subassembly area notifies the work cell and purchased parts supplier of a the work cell and purchased parts supplier of a requirement requirement

Kanban SignalsKanban Signals

Work Work cellcell

Raw Raw Material Material SupplierSupplier

KanbanKanban

Purchased Purchased Parts Parts

SupplierSupplier

Sub-Sub-assemblyassembly

ShipShip

KanbanKanban

KanbanKanban

KanbanKanban

KanbanKanban

Finished Finished goodsgoods

Customer Customer orderorder

Final Final assemblyassembly

KanbanKanban

Advantages of the Advantages of the KanbanKanban A simple and understandable processA simple and understandable process Provides quick and precise informationProvides quick and precise information Low costs associated with the transfer of Low costs associated with the transfer of

informationinformation Provides quick response to changesProvides quick response to changes Limit of over-capacity in processesLimit of over-capacity in processes Avoids overproductionAvoids overproduction Is minimizing wasteIs minimizing waste Control can be maintainedControl can be maintained Delegates responsibility to line workersDelegates responsibility to line workers

The Inventory ProcessThe Inventory Process

Suppliers Customers

Finished Goods

Raw Materials

Work in Process

Fabrication & Assembly

Inventory Storage

Inventory Processing

Comparison of JIT and Comparison of JIT and TraditionalTraditional

FactorFactor TraditionalTraditional JITJIT

InventorInventoryy

Much to offset Much to offset forecast errors, late forecast errors, late deliveriesdeliveries

Minimal necessary to Minimal necessary to operateoperate

DeliverieDeliveriess

Few, largeFew, large Many, smallMany, small

Lot sizesLot sizes LargeLarge SmallSmall

Setup; Setup; runsruns

Few, long runsFew, long runs Many, short runsMany, short runs

VendorsVendors Long-term Long-term relationships are relationships are unusualunusual

PartnersPartners

WorkersWorkers Necessary to do the Necessary to do the workwork

AssetsAssets