Business Basics
Home Page

Who is Bill Gaw?
And why should we
listen to him?


lean manufacturing principles and techniques training

Are you worried about your company's future?
Are you concerned about your job security?

Lean Manufacturing Certification

It's easy to present "make-a-difference' in-
house training with the help of our: 
Lean Manufacturing Seminar-in-a-Box

Manufacturing Master Planning
Part 5 of 6

privacy policy

To review our training
packages, simply click
on any of the links below:

Training Materials and Options

Lean Manufacturing Solutions

Lean Manufacturing Toolbox

Performance Measurement Training

Poka-Yoke and
Process Improvement Training

Lean Manufacturing -
Small and Medium
Sized Businesses

Supply Chain
Inventory Management

Lean Six Sigma

Strategic Planning Training

World Class Manufacturing

Continuous Process Improvement

Kaizen Training

Kaizen Blitz Event


Best-In-Class Manufacturers

Best of Gaw Lean Management Articles

Golf Training Program


Kanbans are the utilization of cards or other signals to authorize production. The signal, or kanban, is a standard container or lot size in which the quantity is based on the amount of time needed to fill the con­tainer once the kanban is received. The process re­sembles the method once used by the milkman. Empty containers on the porch authorized him to leave full bottles. No bottles, no milk. If the kanban authoriza­tion is present, action is taken. If there is no kanban, no action is taken.

This same method can easily be applied throughout the supply chain. Contractual agreements are established between the sales and purchasing departments, provid­ing forecasts and future demand requirements. Ship­ments are only scheduled upon receipts of signals by the supplier, so that a kanban for finished goods reflects an actual customer demand, not simply a date on the sched­ule. Communication channels can be established with something as simple as a fax machine. Kanbans can be sent directly between production lines, reducing addi­tional ordering times. In this way, a real customer order causes the shipping location to empty which in turn re­leases a kanban for replenishment, authorizing the ship­ment without paperwork or intervention.

Kanbans can stand alone, or can be combined with techniques such as MPS/MRP or schedule sharing.

Schedule requirements are given to suppliers, or pro­duction, communicating what to make medium and long term. These are converted to specific production and supplier shipments via kanbans. In this way, future visibility is provided for planning materials and capac­ity down the supply chain, yet actual inventory is not produced or moved until required.

Distribution Requirements Planning

Distribution requirements planning (DRP) can also be used across company boundaries to facilitate customer/ supplier relationships. This time-phased logistics plan­ning system uses the same logic as MRP, and can be used to plan the replenishment of inventories of immediate customers, distributors, etc. It uses similar techniques to schedule sharing in that it allows a company to sub­stitute valid information for inventory. This informa­tion can be shared manually, or electronically input into the supplier's planning system. The need for the non-value-added activity known as forecasting can be re­duced, and even eliminated, as visibility is gained into customers' true requirements.

The benefits of each of these methods include

      Improved cash flow and increased profits

      Improved customer/supplier relationships

      Elimination of data redundancy and paper commu­

      Quicker throughput and reduction of control points

      More dynamic production scheduling

      Elimination of excess inventory at both sites, with­
out a reduction in service

      Reduction in lead times from days to hours

      Improved credibility as a result of increased deliveryperformance

      Effective long-range material and capacity planning
due to shared information.

Customer Relationship Management (CRM)

This new suite of applications allows for a personalized customer experience. Customer activities are tracked, and guidance provided about the company, products, and services. Immediate response is provided to produc­tion information requests as well as product availabil­ity information and delivery promises. Customers are allowed to configure, price, place, track, and revise or­ders electronically.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 12

A Gift for You

Need help in bringing this training to your company, may I suggest that you forward this Web page to your leader. If you do, we'll send you our Power-Point presentation, "7-Rules for Surviving in an Entirely New Economy."

To open the
"Forward to" form:



To stay current on Lean Management Basics and Best Practices, subscribe to our weekly MBBP Bulletin... and we'll send you our PowerPoint presentation, "Introduction to Kaizen Based Lean Manufacturing™." All at no cost of course. 


First Name:
Your E-Mail:

 Your personal information will never 
be disclosed to any third party.

privacy policy

Here's what one of our 13,000 plus subscribers wrote about the MBBP Newsletter:

"Great manufacturing articles. Thanks for the insights. I often share portions of your articles with my staff and they too enjoy them and fine aspects where they can integrate points into their individual areas of responsibilities. Thanks again."

               Kerry B. Stephenson. President. KALCO Lighting, LLC

"Back to Basics" Training for anyone ... anywhere ... anytime

Business Basics, LLC
6003 Dassia Way, Oceanside, CA 92056
West Coast: 760-945-5596 

© 2001-2009 Business Basics, LLC