© Lean & Mean Consulting. All rights reserved. 2015 © Lean & Mean Consulting. All rights reserved. 2016

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Kanban Pull Flow Sizing Kanban Loop & Shop-stock Setting System & Daily Operational Management

World-Class Standards & Best Practices of Operational Excellence

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1. Introduction to Pull System / Push vs. Pull / Pull Signals 2. Origin of Kanban System / Its Role & Objectives 3. How the Kanban System works:

Production Instruction Kanban (PIK) Withdrawal Kanban (WK) Shop-stock – definition and functions Waiting Queue Sequencer

4. Implementation of a Kanban System : Setting Production Instruction Kanban:

a. Calculation of production batch size. b. Sizing shop-stock.

Setting Withdrawal Kanban: a. Sizing withdrawal kanban loops. b. The principles for WK circulation.

5. Making the system working effectively: Key success factors. Periodic updating of loop size. Reducing the loop and making the materials flow faster Prerequisites for kanban set-up.

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Description: Theoretically Kanban System is a set of simple rules to follow: to produce or provide only what customer wants and when he wants it. This rule requires to have right information at right time. And that’s exactly the function of Kanban to control and manage the information flow.

In practice, setting the Pull Flow System that works really effectively is a challenge. One of the main reasons of why companies fail is a difficulty to adjust principles of Kanban to specific, variable operational conditions of vast majority of the companies. The knowledge of the system is generally not a problem. There are also many good practices available in the market… So what is missing to succeed? Our experience shows that, in most cases, companies are missing the right tools and the appropriate approach to effectively manage them. The right tool means to possess the capability to easily adjust the system to fluctuating demand. And the right approach means to follow Kanban philosophy and to be very consistent and… patient! This part of the LEAN Academy, apart from the expertise knowledge, provides necessary tools and templates to successfully launch Kanban System. The package offers a comfortable work and expected satisfaction while using the system every day.

Recommended Audience:

Lean Leaders, Production and Logistics management and operations staff

Methodology: Multimedia presentation, short lectures, individual exercises, group activities and discussions and Q&A

Learning Objectives: Kanban Pull Flow System (1 day). • Review of the existing knowledge about the Kanban Pull Flow system. • Understanding the operational principles of the Pull Flow System

within the production (Production Kanban) and material flow (Transportation Kanban)

• The function of the Waiting Queue in the Production Kanban. • Principles of sizing the supermarket or shop-stocks • Learning about a Sequencer, or Heijunka • Visual management in the Pull Flow system. • Presentation of the Kanban Toolkit.

Tools / Templates / Methods: • Calculation of the loop size in the Production Instruction Kanban.

A complete tool in MS Excel spreadsheet to establish the Pull Flow system between two processes. The tool calculates the right number of cards (or signals) in the loop per each part number which is covered by Kanban system. This is an advanced data base to adjust easily the size of Kanban loops to the changing production conditions, especially taking into consideration the variability and fluctuations in the customer forecast and demand.

• OPTION: A tool for printing the Kanban cards.

Module 03. Kanban Pull Flow System / Sizing Kanban Loops & Shopstocks Setting Daily Operations & Management System

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Learning the Pull Flow Kanban methodology

Learning how to effectively set the Kanban system

Learning the role and function of the shop-stock, the waiting queue and the sequencer (Heijunka)

Presenting the lean Academy’s tool to calculate Kanban loops

Gain the knowledge on how to effectively manage the system and adjust it flexibly to variable demand fluctuations.

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Push:

Maximizing capacity utilization

Using forecast / approximation

Top-down scheduling

Large batches

High WIP / inventory level

Poor communication

Pull:

Producing only what is needed

Following the real need / precision

Upstream pulls from downstream

Small batches

Optimized stock level (shop-stock)

Visual communication (signals)

Push vs. Pull

• Make all we can.

• Inventory is helpful!

• Make only what’ needed and when needed.

• Inventory is costly!

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Production Approximation

Anticipated Usage's

Large Lots & High Inventories

Waste is everywhere

Management by Firefighting

Poor Communication

Make all we can just in case. Make what’s needed and when we need it.

Production Precision

Actual Consumption

Small Lots & Low Inventories

Waste is reduced

Management by Sight

Improved Communication

PARTS PARTS

PA

RTS

PARTS

PARTS

PARTS PARTS

PARTS PARTS

PARTS PARTS

PARTS PARTS

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Instruction sent from the Customer to the Supplier to replace resources that have been consumed

Full for an empty

Empty

Full

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EMPTY

Uses the empty container as a physical signal that authorizes the replenishment of the consumed material

Requires space for two containers

Operator must draw from one container at a time

Bulky material

FULL

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Full-replenishment Kanban System

Why a Standard Pack???

Specific number of parts = 1 Container of parts

1 Container of parts = 1 Standard pack

1 Standard pack = 1 Pull signal (e.g. card)

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Provides a visual control that makes overproduction obvious (preventive function)

Controls of inventory movement

Authorizes production

Regulates amount of inventory in the system

Be a tool for driving continuous improvement

Kanban System Objectives

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Kanban System What is it?

Kanban is a visual signal that is used to trigger an action.

The word kanban is Japanese and roughly translated means “a card you can see.” Kan – „card” ban – „signal”

In Lean Manufacturing, Kanban starts with the customer’s order and follows production downstream

Kanban is a card with an inventory number that’s attached to a part.

Right before the part is used or consumed, the kanban card is detached and sent up the manufacturing process (or supply chain) as a request for another part.

A part is only manufactured (or ordered) if there is a kanban card for it.

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Is a pull signal that:

Authorizes production

Authorizes movement

Limits inventory

The signal can be a: Card Triangle Box Light or sound

Kanban System

is a nervous system of a lean kind of production. It controls production like our brain does to control the parts of the body. It determines the batch size and sequence for each process.

Kanban System What is it?

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Kanban is an instruction for:

Withdrawing products from the preceding process

Producing the quantities that has been withdrawn

Thus there are 2 types of Kanban:

Production Instruction Kanban – PIK

Withdrawal Kanban – WK

2 Types of Kanban

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Product group /

family

Customer

Part number

Following number

of a kanban card

Product name

full description

Kanban type:

PIK or WK

Product short name

or family (may

include picture)

„Owner” of the

kanban card

Kanban loop (always set

between two processes)

Quantity per

container (fixed)

Kanban Card Example of PIK card (averse)

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a

a

b

c

b

1 2 3

b

B

b

B

a

A

b

B

c

C

1 2 3

a

Upstream

process

Downstream

process

shop-stock Flow-rack

a

a

Production Kanban (PIK)

Withdrawal Kanban (WK)

c

C

c

C

c

C

a

A

a a

A A

a

a

Functions of Kanban: Produce and withdraw

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1. Production batch = 1 kanban (no changeover time)

1 Kanban card corresponds to 1 box to produce

2. Production batch = n Kanbans (incl. changeover)

Kanban with batch-building-box.

When different references are manufactured at the same process with changeover time, the production order is a pack of Kanbans (a batch). The production order is not given until the batch has been constituted.

A batch of n Kanbans corresponds to n packaging units to produce.

PIK

PIK PIK

PIK PIK

PIK

Production Instruction Kanban (PIK)

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1. A Production Instruction Kanban is removed from shop-stock (also end-of-line stock). The PIK will become a production order.

2. The kanban is hung in a queue so that production is carried out according to withdrawal sequence.

3. An operator takes the kanban from the bottom of the queue and produces the exact number of parts indicated by the Kanban.

4. The Kanban is then put back on the box which will be put in the shop-stock.

a

A

a a

A

b

B

b

B

c

C

c

C

1 2 3

a

shop-stock

c

C

A

1

c

C

2

4

Withdrawal direction

a

b

c

b

3

Production Kanban without production batch Functional scheme

a b c

a

A

a a

A

b

B

b

B

c

C

c

C

1

2 3

shop-stock

c

C

A

b

a

c

b

2

3

1

4 5

a

a

Batch-building-box

1. Production Instruction Kanban card is removed from shop-stock.

2. The Kanban is placed in the batch-building-box which is filled from bottom to top to give a clear view of empty slots.

3. When the batch is done, the Kanban pack is taken out of the batch-building-box and put in a queue. It is this Kanban pack which becomes a production order.

4. An operator takes the Kanban pack at the bottom of the queue, and produces the exact number of boxes indicated by the Kanbans.

5. Each Kanban in the batch is next attached to the boxes produced which are put in the shops-stock.

Production Kanban: fixed production batch Functional scheme

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Increases employee involvement

Allows decision-making at appropriate levels

Allows manufacture of only what is needed by the customer

Improves communications of customer needs through visual controls

Provides a common system for moving material through a plant

Eliminates scheduling complexities

Reduces lead time and work in process inventory

Leads to lower unit cost

Supports continuous improvements

Counts inventory by counting number of pull signals

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1. No bad parts may reach the next process.

2. The number of parts in each packaging units must be identical to the number of parts noted on Kanban.

3. The downstream process must withdraw the exact quantity of the right products in the right time.

4. The output of the upstream process must match the quantity withdrawn by the downstream process.

5. Number of Kanbans must be constantly reduced.

6. The Kanbans must be used to adopt to small fluctuations of demand.

Six rules for effectiveness

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The kanban is a visual management tool for: Detecting irregularities in the process

Avoiding overproduction

At any given moment a Kanban card may be found: On packaging unit in the shop-stock

In the batch-building-box

In the waiting queue

The number of Kanbans in the loop reflects the relative amount of production inflexibility. The more kanbans in the loop the more time it will take to react to

variation in demand.

Effectiveness of Kanban System Visual management aspect

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Since nothing may be produced or supplied without a Kanban, overproduction simply cannot happen. Maximum stock level is under control.

Effectiveness of Kanban System Kanban makes overproduction stopped

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SHOP-STOCK is a stock placed at the foot of upstream (supplier) line or machine, where the downstream process (customer) can find all the parts they need at any time. Parts must have a dedicated location and be managed by FIFO.

Shopstock

Finished Products (FP) Semi-finished parts (SF)

High-runners (HR)

Low-runners (LR)

High-runners (HR)

Low-runners (LR)

Constantly available

Made to order Constantly available

If possible – constantly available

Shop-stock / Supermarket Introduction

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Shares the workload over the day / shift

Ensures available capacity is not over or under-utilized

Generates frequent withdrawal from Shop-stock & brings the customer demand information to the production lines (Takt Time transmission)

Organizes Truck Preparation Area ( TPA )

Manages the flows to and from Pool Stock

Initiates Indirect Labor Standardization (material handling)

Sequencer (Heijunka) A mean to express a mixed and leveled customer demand

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Total number of cards in the loop = Stock covering the time required to reconstitute a

consumed batch…

+ Stock covering risks

+ Stock covering the customer withdrawal batch

+ Stock covering difference between customer and supplier

working time

+ Technical buffer

Production Kanban System Sizing a Production Kanban Loop

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Sizing Shops-stock and Kanban Loop Calculation Example of a hands-on tool

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Sizing Shops-stock and Kanban Loop Calculation Example of a hands-on tool

Large shop-stock = large WIP inventory + space blocked!

Best practice of Kanban System is to reduce shop-stock size on regular basis just from the first day of its functioning: • SMED → batch size reduction • Leveling of withdrawals • Packaging size reduction (small containers) • Making machines more reliable (TPM) • Stabilizing production (takt-time kept fixed for longer time)

Production Kanban System Reducing the size of the shop-stock

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The initial size of the kanban loop is never perfect!

It happens that the loop is over-or underestimated relative to real needs.

Production Kanban System Daily tracking of shop-stock and maintenance of the kanban loop

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Prerequisites for successful kanban set-up:

Production Leveling: Master Production Schedule (MPS) Sequencer Pool-stock (if necessary)

Without this leveling, there is a risk of excessive variation in plant

consumption which would generate unacceptably high shop-stock levels!

TPM Lines and machines high reliability:

SMED

Increasing withdrawal frequency decreases stock only when production batches are sufficiently split up. Otherwise, it is best to further reduce batch size by cutting tool change time, via a SMED workshop.

Production Kanban System Key success factors

31 © Lean & Mean Consulting. All rights reserved. 2016