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A Manufacturing ExampleKanban scheduling in manufacturing works in thesame way. The essential elements of a system are:C O N S U L T A N T S E N G I N E E R S S T R A T E G I S T Swww.strategosinc.com• Stockpoint(s)• Withdrawal Signal• Immediate Feedback• Frequent ReplenishmentIn the manufacturing kanban system shown below, amachine shop supplies component parts to finalassembly. Assembly is a manual operation with littlesetup. Assembly produces in lot sizes of oneaccording to customer requirements.Machining is more automated than assembly and hassignificant setup costs. Machining must produce inbatches to amortize the setup and sequence parts tominimize tool changes.A small quantity of every part is maintained at themachine shop. By observing the remaining quantities,the machinists know what products need to be madenext.Kanban and Other MethodsProduction Control coordinates multi-step processes,often with multiple products. Kanban is just one ofseveral ways to achieve this coordination.Physical Linking is another way to coordinate. Here,each part in the process moves in synchronizationand each step starts simultaneously. Processes musthave the same lot size and co-location.Page 2Strategos, Inc.- 3916 Wyandotte - Kansas City Missouri 64111 – 816.931.1414
In Broadcast, a final assembly operation buildsdirectly to schedule. The schedule is simultaneously"Broadcast" to upstream subassembly and supplyoperations. They build the needed parts in "Line-SetOrder" with a small time offset for delivery. Thissystem does not require co-location. It does requireidentical lot sizes (usually one) for all processes.C O N S U L T A N T S E N G I N E E R S S T R A T E G I S T Swww.strategosinc.comreplenishment times. But, these conditions are rare.Typical systems have very high inventories andexperience frequent stockouts.Kanban scheduling systems are useful when lot sizesdiffer between process steps, processes areunbalanced or when distance introduces time lag orvariability. These systems slightly de-couple theprocesses.Materials Requirements Planning (MRP) works fromBills Of Material (BOM), routings, inventory recordsand forecasts. It plans each process step for eachproduct, subassembly and item. The systemaccumulates demand for each work center and eachtime period. MRP allows effective scheduling underthe most difficult conditions.This ability to connect a disjointed production comeswith a price. MRP permits some forms of sloppyengineering. The administrative costs are high.Throughput times are long and inventory turns low.Errors in inventory, BOM's or lead times disrupt thesystem. About 50%-80% of installed MRP systemsdo not meet their user's needs.Re-Order Point (ROP) systems store each item andissue to downstream work centers on request. ROPsignals a resupply when the inventory is justsufficient to cover the resupply time.ROP systems are simple. They require steady andpredictable withdrawal rates and predictableKanban CartA Hierarchy Of MethodologyThe figure below shows how the methods form ahierarchy of simplicity and flexibility. The bestsystem is the simplest.Where the process allows, Physical Link is thesystem of choice. Broadcast, Kanban, MRP and ROPfollow in desirability.A system designer would examine each process andeach product group in turn. He/she attempts to applyphysical linkage. If the necessary conditions do notexist and process change is impractical, PhysicalLinkage is rejected and Broadcast is considered. Thisprocess follows down to the least desirable system,ROP.In practice, Kanban scheduling systems are often agood choice. They can be a transition between MRPand ROP approaches and Physical Linkage.Page 3Strategos, Inc.- 3916 Wyandotte - Kansas City Missouri 64111 – 816.931.1414
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