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Copyright NN, Inc. 2004 Company Confidential

Kanban Signaling

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Cost reduction through relentless elimination of waste -

MUDA or non-value-added work

The two pillars of Toyotas Global Production System

Leveled Production(Production Smoothing)

The Toyota Production System

Just

in

Time

Autono-

mation

(Jidoka)

Kanban Signaling : Two Pil lars of TPS

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Cost Reduction

Production

Methods

Elimination of Waste

Continuous Flow of Production

Self-Stop AutomationJust-In-Time Production

Increase of Capital

Turnover Ratio

Information

SystemControl by

Teamwork

Automatic

Stop

KanbanSmall lots

Short set-up

Multi-skilled worker

Jobs finish within

cycle time

Kanban Signaling: Toyotas Production System

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A Kanban is aVisual I nformation System

establishedto maintain theDISCIPLINEof aJI T

Systemon the shop floor.

Kanban (Japanese) : Card or Visual Record.

I n The Modern Lean Terminology

Kanban Signaling

What is a Kanban ??

A SIGNAL THAT AUTHORIZES PRODUCTION

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Pillars of Just In Time

The Three Main Principles of JIT :

Takt

PullF low :

Kanban Signaling

Material

People

I nformation :

Kanban Signaling

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What is a Supermarket ?

Does a Supermarket fit any production environment ?

Ideal Production Environments for Supermarkets :

High Commonality of parts

Relatively Flat (Smooth) Demand Pattern

Part Number (SKU) has many customers

Component has many usages Inadequate Process Capabilities : not able to produce the

desired mix due to capacity issues.

Kanban Signaling

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* All the activity associated with any replenishment

system is non-value added (Waste Muda).

* The target for improvement should be to

eliminate or streamline each activity associatedwith the replenishment system.

Kanban Signaling: Waste in Replenishment Systems

Replenishment System

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Over-Production

Costs and Delaysthat ReduceProfitability

Inventory

HiddenProblems

LongSetups

Downtime

Defects

ProductionImbalance

Late Supplier

Deliveries

ResourcesTied Up

Deteriorationor Damage inStorage and

Handling

StorageCosts

Wasted

Space

Transport& Handling

People

Equipment

Energy

Delay &Long Lead

Time

Whats Wrong with a Little Inventory?

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VA NVA

Response Time

Response Time

Response Time

Before Manufacturing Process Improvement

After Manufacturing Process Improvement

After Replenishment SystemImprovement

Kanban Signaling: Waste in Replenishment Systems

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I N V E N T O R Y

customer manufacturing

I

manufacturingcustomer

Kanban Signaling: MRP vs. Kanban

Push vs. Pull

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Push System :Work releases are scheduled based on anticipated demand withno consideration of the status of the plant (MRP).

Pull System :Work releases are authorized based upon the status of the plant,

that is the status of downstream operations dictate theproduction requirements for upstream operations.

Upstream

inventory

Assembly

Upstream

inventoryAssembly

MRP

Kanban

Kanban signals Full containers

Kanban Signaling:

Push vs. Pull

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If these are not done first, implementing Kanban Pull

wil l force these to take place.

For a Pull System to perform effectively, Level 3 Building Blocks

should be in place :

Quick Changeovers : Set-Up KaizenCellular Manufacturing : F low Kaizen

One Piece Flow : Flow Kaizen

Low Variability :Variabil i ty Reduction Kaizen(6 Sigma tools)

Reliable Process : TPM Kaizen

Stable, Flat Demand : JI T Principles

Kanban Signaling

Prerequisites of a Kanban Pull System

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How Does a Kanban System Work ?

Single Card Kanban :

In a Single Card Kanban System, the operator of a down streamoperations requires a Production Card and the necessary Material

to be authorized to begin processing. He/she simply removes the

Card and sends it back to the upstream process, signal ing

production to replenish the mater ial used by his/her station prior

to processing the job.

Kanban Signaling

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Single Card Kanban

When stock is removed place

production card in hold box.

Production card authorizes

start of work.

Full Container

Production Box

Workstation

Kanban card

Kanban Signaling

Container being filled

Container being emptied

When stock is removed place

production card in hold box.

Production card authorizes

start of work.

Outbound

Stock Point

Outbound

Stock Point

Outbound

Stock Point

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Two Card Kanban

A Two Card Kanban is used when WIP cannot be effectively

handed from one process to the next, thus necessitating an Inbound

Stock Point and an OutboundStock Point for processing stations.

Mainly this system is utilized in heavy transaction, high complexityparts (huge number of parts)

In this System Two Cards are used :

Move (Conveyance) Card : To authorize the Movementof material

Production Card : To authorize the Production.

Kanban Signaling

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PROCESS 1 PROCESS 2

1New stock

moved into

Process 2

Move

kanban

detached2

Move kanban

attached to

new stock

3

Production

kanbans

direct the

production

sequence

BProduction

kanban

attached

to finished

quantity

C

OUTBOUNDSTOCK AREA

INBOUNDSTOCK AREA

Two Card Kanban System

MOVE KANBAN (1-2-3)

Each process has an inbound and an outbound stock area. The inbound area contains raw materials

used in the process. The outbound area holds completed output from the process.

When Process 2 begins to consume the contents of a container, the Move Kanbanis taken off the

container and brought to the outbound stock area of Process 1. There the Move Kanbanis attached to

a new, full container, which is taken back to the inbound stock area of Process 2, ready for use.

Dispatch

Box

Production kanban

detached, placed

in dispatch box

A

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PROCESS 1 PROCESS 2

1New stock

moved into

Process 2

Move

kanban

detached2

Move kanban

attached to

new stock

3

Production kanban

detached, placed

in dispatch box

A

Production

kanbans

direct the

production

sequence

BProduction

kanban

attached

to finished

quantity

C

OUTBOUNDSTOCK AREA

INBOUNDSTOCK AREA

PRODUCTION KANBAN (A-B-C)

A Product ion Kanbanis attached to every container in the outbound stock area at Process 1. When

Process 2 comes to remove a container of parts, the Product ion Kanbanis taken off and put in a

dispatch box for Process 1.

Process 1 may make parts for several other processes, therefore, it builds the new parts in the order in

which the kanban are placed in the dispatch box. When a container is full, the Product ion Kanbanis

attached to it and it is placed in the outbound stock area ready for withdrawal by Process 2.

Dispatch

Box

Two Card Kanban System

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Two Card System / Move Card

Part number : 33311-3501Container capacity : 50

No. of kanban released : 7 of 12

Downstream work center: K123

Stock location no.: A-12

Stock location no.: A-07

Upstream work center:Y321

Kanban Signaling : Kanban Cards

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W.I.P. Kanban systemat NN in Mountain City

Shop Supplies Kanbansystem at NN in Veenendaal

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Two Card System / Production Card

Work Center no.:Y321Part number to be produc ed: 33311-3501Container capacity: 50 units

Stock capaci ty at which to store: A-07

Materials Required:

Material no. 33311-3504Stock location:A-05

Part no.33825-2474Stock location:B-03

Kanban Signaling : Kanban Cards

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CalculationsKanban Size

Kanban Signaling

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Dd x R x MAD

Dd= Daily demand:

- Last years customers shipments / number of production days.

-Next X week forecast / production days.

R= Replenishment time:

- Total time from the signal until product is back in the Kanban.

MAD = Mean average deviation to the daily rate.

- Any distinct order patterns?

Kanban Signaling : Calculat ions / Kanban Size

Kanban Size

Basic kanban

size calculat ion

PLUS demand

variat ion factor

METHOD

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Dd x R x MAD

Kanban Signaling: Calculat ions / Kanban Size

Example 1

A 500 3 1.40 2100

B 900 2 1.25 2250

C 750 3 1.80 4050

D 500 4 2.01 4020

E 500 2 1.50 1500

F 1200 4 2.00 9600

Kanban

Replenishment

Point

ItemDaily

Demand, Dd

Replenishment

Time, R (days)MAD

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Our customer shipments last year were 100,000 of part A, 250,000of part B, and 400,000 of part C. There are 240 production days in

this year. Calculate the parts per day of each item.

A = 417 parts/day B = 1042 parts/day C = 1667 parts/day

The time to replenish part A is 2 days, part B is 4 days, and part C is

1 Day. Analysis of last years demand patterns shows that part A had

a MAD of 1.50, part B 1.25, and part C 1.20. Calculate the

replenishment level.

A = 1251 parts B = 5210 parts C = 2000 parts

Dd x R x MAD

Part A: 417 x 2 x 1.50 =


Another Example

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- Establish daily rate for all items in the process.

- Total run time required.

- Hours available for the process. ( Breaks, Lunches, HistoricalDowntime )

Hours Available - Run Time = Hours Available for Set-Up

Hours Available for Set-Up / Time per Set-Up = Set-Ups per Day

Number of items / Set-Ups per day = Days of Demand (min lot size)

Formulas


Process CapabilityAlternat ive kanban

size calculat ion

based on process

capabi l i ty

METHOD

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Item Daily Demand Run Time/Pc Total RTA 500 x 5 sec = 2500 sec

B 900 4 sec 3600 sec

C 750 7 sec 5250 secD 500 6 sec 3000 sec

E 500 5 sec 2500 sec

F 1200 4 sec 4800 sec

Total Sec 21,650

1 machine x 7.2 available hours x 3600 sec/hr = 25,920 sec available


EXAMPLE 1

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25,920 sec available

-21,650 sec run time

4,270 sec available for Set-Ups

Each Set-Up takes 1/2 hour (1800 sec.)

4270 sec available for set-up / 1800 sec per set-up =2.4 Set-

Ups/day

Round 2.4 down to 2 set-ups / day

6 Items / 2 set-up per day = 3 Days of Demand(min lot size)


EXAMPLE 1 : (continued)

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Item Daily Demand x 3 Kanban Size

A 500 = 1500 pcs

B 900 2700 pcs

C 750 2250 pcs

D 500 1500 pcs

E 500 1500 pcs

F 1200 3600 pcs

* 3= 1500 piece Kanban size


EXAMPLE 1 : (continued)

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CalculationsNumber of Cards

Kanban Signaling

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Number of Cards

The number of authorized Cards / Containers in a JIT system

controls the amount of inventory in the system at any given time.

The number ofCards / Containers in the system directly impacts

the the WIP inventory and safety stock. Material spends some

time in actual processing, waiting in queue, waiting in astorage location or in transit.

So at any given time in the system, containers carrying material

are in one of the above stages.

The Key to determining the number of Cards/ Containers is

estimating the average Lead Time needed to produce a

container of parts :

Lead Time = L

Kanban Signaling

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# of Cards = Average Demand during Lead Time plus Safety Stock

Size of the Container (Kanban Size)

Where Lead Timeis a function of the processing timeper container

at the upstream supplier station and the waiting timeat the down

stream production process and for material handling.

Number of Cards

Kanban Signaling

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Kanban Signaling: Kanban Bins and Cards

EXAMPLE

A 1500 500 3

B 2700 900 3

C 2250 750 3

D 1500 750 2

E 1500 300 5

F 3600 600 6

Kanban

Size

Kanban

Bins/Cards

Required

Bin

CapacityItem

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Demand pattern is the actual pattern which finished goods

are consumed by the customer.

This can be magnified by the way that we transmit

replenishment signal back to manufacturing. (Weekly

buckets)

Actual

Demand

Average

Predictable Demand.

Kanban Signaling

DemandPatterns

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One or Two Customer Seasonal

(Time)

(Demand)

Kanban Signaling

Demand Patterns

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Unpredictable

(Time)

(Demand)

Kanban Signaling

Demand Patterns

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Components

Form Mach Finish Pack

Highest level of commonality, closest to the customer.

Replenishment

time to Kanban Replenishment

time to Kanban Replenishment

time to Customer

Pull

Push

Replenishment

time to Customer

Kanban Signaling

Demand Patterns

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What is Mixed Modeling:

The ability to produce the desired daily mix of products as

specified by the customer.

Therefore,sequencing is a method of refining the daily build

schedule by determining the order in which the product will

be produced.

The objective of Sequencing:

To create a linear cyclical demand pattern during the course

of each day.

Kanban Signaling

Sequencing / Mixed Modeling

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= A B A C A B A C A B A

2. Lay in the 12 Minute product sequence in the most rhythmical fashion whilenot exceeding (6) As, (3) Bs, and (2) Cs

Minutes in a Daily Build

Product Work Day Quantity Takt Time

A 480 Minutes / 240 = 2 Min.

B 480 Minutes / 120 = 4 Min.

C 480 Minutes / 80 = 6 Min.12 Minute Period

The takt time results indicate that in a 12-minute period:

12/2 = 6As, 12/4 = 3Bs, and 12/6 = 2Cs need to be made.

Kanban Signaling

Example

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Empty FullWork till bin is full

EmptyEmpty

Full FullNo Work

Kanban Signaling: Signals, Options , and Presentat ion

Two Bin Replenishment

Something iswrong in the

system

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Full

1 of 3Full

2 of 3

Full

3of 3

Full

1 of 3

Full

2 of 3

Full

3 of 3

Do not work

Empty

2 of 3

Empty

1 of 3Full

3 of 3

Full

1 of 3

Full

2 of 3

Full

3 of 3

Do not workEmpty

1 of 3

Empty

2 of 3

Empty

3 of 3

Full

1 of 3

Full

2 of 3

Full

3 of 3

Work to fill 3 bins

Empty

1 of 3

Empty

2 of 3

Empty

3 of 3

Empty

1 of 3

Full

2 of 3

Full

3 of 3

Work to fill 3 binsEmpty

1 of 3

Empty

2 of 3

Empty

3 of 3

Empty

1 of 3

Empty

2 of 3

Full

3 of 3

Work to fill 6 binsEmpty

1 of 3

Empty

2 of 3

Empty

3 of 3

Empty

1 of 3

Empty

2 of 3

Empty

3 of 3

Empty

1 of 3

Full

2 of 3

Do not work

Full

3 of 3Full

1 of 3

Full

2 of 3Full

3 of 3


Multiple Container Kanban

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Part NumberDescription

Supplying Process Consuming Process(Location)

Quantity Per Container Number of Cards

(1 of 3)


Basic Information for Kanban Card

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Bill of Materials

Drawing Numbers

Labor Information

What do you need?

Etc...

Remember: Changes, requi re card maintenance.

Bil l of Mater ial, Process changes, etc...


Optional Information for Kanban Card

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There have been many different ways that signaling has been

performed in many different situations.

The Main Objective is Visual, Easy to Understand, Practical way to

send a clear signal that authorizes the production or movement of

mater ial :

Traditional Cards

Containers

Painted areas on floor

Carrying bags Bins

Andon Lights

Golf Balls


Visual Signals

K b Si li

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Card Examples

K b Si li

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Card Examples

K b Si li

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Signal Kanban = Sing le card o r lot s ize greater than

replenishment quant i ty

Replenish Point

2 Bins

Lot Size

10 Bins



K b Si li

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A way to increase Kanban size for a short period of time.

Normally, to handle short term increased demand. (Promotions)

Card must be distinguishable as a one time use only card.

Color, Size, Shape, etc...


Supplying Process

Consuming Process

(Location)

Quantity Per Container Number of Cards

(1 of 3)


Non- Replenishable Cards

K b Si li

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KANBAN CARDS = $$ MONEY $$$

DO YOU LEAVE YOUR MONEY LAYINGAROUND, UNATTENDED??


K b Si li

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WaitWork

Board


Kanban Signaling Si l O i d P i

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1 2 3

4 5 6

PART#44367 PART # 58221 PART # 28873

PART #78651 PART # 34529 PART 38994

WHEN THE NUMBER OF CARDS EQUALS

THE STARTING POINT( EX. 3 CARDS)THEY MOVE TO SCHEDULE SIDE.

Schedule Board


Kanban Signaling: Si l O ti d P t t i

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Part Number

123456

126574

123244

123209


Visual Kanban Board

Kanban Signaling: Si l O ti d P t ti

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Time Slot Board7-8

8-9

9-10

10-11

11-12

12-11-2

2-3

Part Number

Description

Part Number

Description

Part Number

Description

Part Number

Description

Part Number

Description

Part Number

Description

Part Number

Description

Part Number

Description

Part Number

Description

TimeofDa

y

Jobs to be completed

Kanban Signaling: Signals, Options, and Presentation

Visual Kanban Board


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Visual metal cards bend and put on rail.

Replenish Point

2 BinsLot Size

10 BinsPart Number

Description

Supplying

Process

Consuming

Process


Visual Presentation


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Drop off at process

Central card collection

Collection point for vendor cards

Use visual signals vs. cards

Kanban Collection Post

Whatever works for you !!

MINIM I ZE NON-VALUE ADDED !!


How to Cards get Back to the Previous Process ?

THINGS TO BE CAUTIOUS OF!!

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THINGS TO BE CAUTIOUS OF!!

Kanban Signaling: Kanban Rules

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Kanban Signaling: Kanban Rules

According to Taiichi Ohno

The Pul l System as def ines by Taii chi Ohno can not sustain its

effectiveness unless the following rules are str ictly adhered to:

Upstream Processes are authorized to produce by

DownstreamProcesses not the other way around Upstream Processes adhere to the Kanban information

regarding Quantity of Production

No Items are to be transported(moved) without a Card

Always attach a Card to the Goods

Do not send Defective Goods Downstream

Reducing the number of Kanban Cards increases their

sensitivity

Strive to reduce.

Kanban Signaling: Kanban Funct ion

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Kanban Signaling: Kanban Funct ion

According to Taiichi Ohno

A Kanban Pull System :

Promotes Visual Management

Provides Pick-Up or Transport Information Prevents Overproduction and Excessive Transportation

Controls the amount of WIP in the system

Serves as a visual work order

Prevents defective items by identifying the process

producing the defects

Exposes waste and forces a root causesolution

10103591-kanban

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