Exploring Kanban

Objectives

After completing this lesson, you will be able to:
  • Describe the Kanban principle
  • Analyze the master data relevant for Kanban

The Kanban Principle

Kanban is a method for effective consumption-based control of material replenishment in production. Material components that have a regular consumption are kept in small quantities in containers that circulate between the work centers or production lines and a replenishment source, such as a warehouse for example. Replenishment of a material component is triggered when a container in production becomes empty. A sufficiently large number of containers circulate between the supply source and production to ensure a steady supply.

Kanban offers the following advantages:

  • The replenishment process is designed to be self-controlling.

  • The inputs in the system are reduced to a minimum, e.g. to the input of a barcode to set a container to empty or full.

  • The supply sources are informed faster about the requirements situation at the work centers or production lines.

  • Replenishment elements such as stock transfer reservations, production orders or purchase orders are created automatically.

  • Goods receipts from the replenishment elements to the storage locations of the work centers or productions lines are posted automatically.

  • Inventory information is always up to date.

  • Lead times and stock levels are reduced.

  • The system collects data about the Kanban process, which can be used for process optimization.

Kanban Principle

Kanban Principle

Kanban Master Data

Structuring the production lines and organizing the production supply are important criteria for a successful implementation of Kanban. For this purpose, you create production supply areas (PSA) and control cycles as master data for Kanban. Production supply areas are areas at the work centers or production lines to which the materials to be consumed are to be delivered. Control cycles are used to define the details for transport from the supply source to the demand source.   

Production Supply Area

Production Supply Area

With Kanban, material is staged in production supply areas directly in production. A supply area can be used by one or more work centers. The supply areas act as a buffer for the required materials, and, for example, can be a shelve or marked-out areas on the floor.

In the master data of production supply areas, a storage location, a responsible person and, in the case of external procurement, an unloading point must be defined. This is explained in more detail in the following.

A production supply area is not an inventory management object. Therefore, storage locations must be assigned to the supply areas. Inventory management (which is relevant, for example, for posting goods receipts) takes place at the storage location to which the supply area is assigned.

A significant organizational prerequisite for Kanban is that you create responsible persons for production supply areas and control cycles. The person assigned to a production supply area is responsible for processing the material and monitoring the stocks in the supply area. The person who is assigned to a control cycle is responsible for the replenishment, that is, for the material supply and, if necessary, for the delivery to the PSA.

In external procurement, the supplier may not deliver the material directly to the production supply area, but to a certain unloading point from which the Kanbans are transported to the production supply area.

Control Cycle

Control Cycle

To control the relationship between supply and demand source, you define a control cycle. The control cycle defines:

  • The production supply area as the demand source

  • One of the following replenishment strategies: In-house production, external procurement, or stock transfer.

  • The person responsible for in-house production, the vendor for external procurement, or the storage location for stock transfer.

  • The number of containers (Kanbans) circulating between the demand and the supply source

  • The quantity for each container

  • The delivery address, which can be printed on a Kanban card

  • Print parameters for printing the Kanban card

  • The Storing position:

    It specifies more precisely the position (for example, a specific shelf section) of the material in the production supply area. The storing position can also be printed on the Kanban card.

  • Parameters for the automatic Kanban calculation.

You can also delete or lock Kanbans in the control cycle. For example, you lock a Kanban if it is not used for a certain period of time because consumption has decreased.

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