Improvements to the environment and the process will impact the number of KANBANs required, just as do fluctuations in the mix.

The supplier operator will be able to assess his com­plete situation by contemplating his KANBAN plan­ning board. On one hand, he is now equipped with suggested KANBAN loops based on forecasted vol­umes and the above calculations (points 1 to 10). Moreover, he is getting a steady stream of KANBANs back from his client(s), immediate feedback signals of true consumption. By accumulating these KANBANs on his board, he can ascertain current movement and whether it is time to produce more.

This KANBAN planning board is posted on a wall near the work center (not in the foreman's office—the foreman is usually incapable of managing these loops efficiently, there are too many of them, and not enough of him).

A typical planning board consists of wall mounted organizers with multiple slots in which the returned KANBANs are inserted, starting with the bottom slots. For each series of KANBANs (one for each part-customer-supplier relationship) indicators (shown as arrows but they could be colored pins or labels) set at different heights indicate critical points in loop man­agement. A single arrow corresponds to a production lot size, and, when enough KANBANs are accumulated to reach that point, signals to the operator that he can begin to produce that part.

A double arrow indicates that, based on the customer consumption rate, production of this item is now a high priority otherwise chances are the customer will stock-out.
A triple arrow indicates the total number of KANBANs in the loop. The difference between that number and the number of KANBANs accumulated on the board identifies precisely the number of full KANBAN-skids at the customer.

Unused KANBANs (retired or spares) are hung from hooks at the base of the board to avoid the operator having to write new cards when he needs them.
The information portrayed by the board is very easy to understand at a glimpse. The exact relative priority of each part is easily assessed for each customer. Oppor­tunistic decisions are now possible based on the exact real time situation on the shop floor.

If, for example, he has just completed a lot of part 6056401 (left hand part), he will reassess his situation and find that this part is undergoing high utilization at this time. That is why KANBANs have accumulated so high on the board. Enough KANBANs are present to warrant another lot immediately, thus saving a setup. If other parts have also reached the first arrow, he has to make a decision about priorities. The higher the KANBANs in respect to the single and double arrows, the more that item is seen as a priority.

If, at the close of a production lot, the operator sees no items have accumulated KANBANs up to the first arrow (order point trigger), he must cease production as there is no need to produce more as current demand is slow and there is sufficient inventory to meet his customers' needs.

Now that we have seen how the cycle works, let's examine how the loops are increased or decreased.

One of two situations may occur. On one hand, several clients may start consuming faster. This will manifest on the board as an increased rate of KANBANs return­ing. At one point, several KANBAN loops will reach their trigger points. The operator will-see he is losing ground to the demand. His output is lower than the demand rate. He will understand he is converting too much capacity into setups, and not enough into produc­tion output. In other words, he is diluting his capacity into too many small lots. He must thus increase his lot sizes and do setups less often. He will also loose some flexibility if he does this. He must consequently increase the size of the buffer stocks. The operator will thus move the first trigger arrow up a couple slots and add three or four KANBANs to the loop. The second and third arrows are also moved up in proportion. This will increase cycle stocks as well as buffer stocks while enabling the work center to produce larger lots in response to a higher demand.

In principle, the operator will have anticipated this situation because the planner will have suggested new loops as discussed above. If the suggested loops point to smaller numbers of KANBANs, the operator is getting conflicting signals. He should obtain more information from his customer or his supervisor to find out if the situation is only temporary or if it reflects a real tendency. After all, the pull he is getting is real, and we all know about forecast error.

The other situation the operator may confront is the exact opposite one where the operator finds he often completes a production lot to find no other loops have reached their trigger point. If this happens once in a while, it is normal (signals time available for preven­tive maintenance, operator training or for poor-quality problem solving). If it happens too often, it means demand has slowed down and that it is an opportunity to decrease lot sizes and buffer stocks. A certain number of KANBANs are retired and the trigger points adjusted accordingly. This will maximize flexibility while reducing unnecessary in-process stocks, achiev­ing greater productivity.

Conclusion

Our Strategic Elevation of Kanban Performance illustrates how KANBANs can function beyond their traditional role of simple prioritizing. This maximizes efficiency and customer service while actively minimizing stocks to the lowest level tolerated by the constraints of the process. This is in direct keeping with the prime objectives of production and inventory management.

Moreover, we have seen how this approach uses KANBANs to dovetail with MRPII systems in a thrust toward respon­sible employee empowerment, where each employee is given, not only the right, but also the tools, to integrative decision making based on the exact and current situation at his or her customers.

The concepts presented can be adapted to almost any environment and can even be implemented to trigger and manage employee flexibility as a means to adjust capacity dynamically in response to mix fluctuations, as a further battle against unproductive work-in-process.

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