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.