3-01 Kanban

Kanban Signaling
Copyright NN, Inc. 2004 Company Confidential

Kanban Signaling : Two Pillars of TPS
The Toyota Production System
Cost reduction through relentless elimination of waste -

MUDA or non-value-added work
The two pillars of Toyotas Global Production System

Just Autono-
in mation
Time (Jidoka)
Leveled Production
(Production Smoothing)

Kanban Signaling: Toyotas Production System
Increase of Capital
Cost Reduction
Turnover Ratio
Elimination of Waste
Continuous Flow of Production
Just-In-Time Production Self-Stop Automation
Production Information
Control by Automatic
Methods System
Teamwork Stop
Small lots
Short set-up Kanban
Multi-skilled worker
Jobs finish within
cycle time

Kanban Signaling
What is a Kanban ??
Kanban (Japanese) : Card or Visual Record.
In The Modern Lean Terminology
A Kanban is a Visual Information System

established to maintain the DISCIPLINE of a JIT
System on the shop floor.
A SIGNAL THAT AUTHORIZES PRODUCTION

Kanban Signaling
Is it Kanban ?
Kanban has Four Elements:

1. A Signal to Produce Parts
2. Limits Production to the Kanban Quantity
3. It is VISUAL Everyone can see it
4. Can be Reduced through Kaizen
Anything else may not be true Kanban

Kanban Signaling
The best Kanban is No Kanban
Kanban is a compromise by nature:
We are not able to connect our processes,

we cannot achieve single piece (batch) flow.
Kanban means there will be inventory!

Kanban Signaling
Pillars of Just In Time
The Three Main Principles of JIT :
Takt
Pull
Flow :
Material
People
Information :
Kanban Signaling

Kanban Signaling
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: Waste in Replenishment Systems
Replenishment System
* 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 associated
with the replenishment system.

Whats Wrong with a Little Inventory?
Over-Production
Inventory
Transport
Delay & & Handling
Hidden Long Lead
Problems Time
Wasted People
Production Long Space
Imbalance Setups
Equipment
Storage
Late Supplier Costs
Downtime Energy
Deliveries
Resources
Defects
Tied Up
Deterioration
or Damage in
Storage and Costs and Delays
Handling that Reduce
Profitability

Kanban Signaling: Waste in Replenishment Systems
Before Manufacturing Process Improvement

VA NVA
Response Time
After Manufacturing Process Improvement
Response Time
After Replenishment System Improvement
Response Time

Kanban Signaling: MRP vs. Kanban
Push vs. Pull
manufacturing
customer
I N V E N T O R Y
customer manufacturing

Kanban Signaling:
Push vs. Pull

Push System :
Work releases are scheduled based on anticipated demand with
no 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 the
production requirements for upstream operations.
MRP
Upstream Assembly
inventory
Kanban
Upstream
Assembly
inventory
Kanban signals Full containers

Kanban Signaling
Prerequisites of a Kanban Pull System
For a Pull System to perform effectively, Level 3 Building Blocks

should be in place :
Quick Changeovers : Set-Up Kaizen

Cellular/Channel Manufacturing : Flow Kaizen
One Piece Flow : Flow Kaizen
Low Variability :Variability Reduction Kaizen (6 Sigma tools)
Reliable Process : TPM Kaizen
Stable, Flat Demand : JIT Principles
If these are not done first, implementing Kanban Pull
will force these to take place.
Kanban Signaling
How Does a Kanban System Work ?
Single Card Kanban :

In a Single Card Kanban System, the operator of a down stream
operations 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, signaling
production to replenish the material used by his/her station prior
to processing the job.

Kanban Signaling
Single Card Kanban
Outbound Outbound Outbound

Stock Point Stock Point Stock Point
When stock is removed place When stock is removed place

production card in hold box. production card in hold box.
Production card authorizes Production card authorizes
start of work. start of work.
Workstation Full Container
Kanban card Container being filled
Production Box Container being emptied

Kanban Signaling
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 Outbound Stock Point for processing stations.
Mainly this system is utilized in heavy transaction, high complexity
parts (huge number of parts)
In this System Two Cards are used :
Move (Conveyance) Card : To authorize the Movement of material
Production Card : To authorize the Production.

Two Card Kanban System
Production kanban
A detached, placed
in dispatch box
INBOUND
Dispatch STOCK AREA
Move kanban
Box 3 attached to
new stock
New stock
OUTBOUND 1 moved into
Process 2
STOCK AREA
C
Production
Production
B kanban
kanbans Move
attached
direct the 2 kanban
to finished
production detached
quantity
sequence PROCESS 1 PROCESS 2
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 Kanban is taken off the
container and brought to the outbound stock area of Process 1. There the Move Kanban is attached to
a new, full container, which is taken back to the inbound stock area of Process 2, ready for use.

Two Card Kanban System
Production kanban
A detached, placed
in dispatch box
INBOUND
Dispatch STOCK AREA
Move kanban
Box 3 attached to
new stock
New stock
OUTBOUND 1 moved into
Process 2
STOCK AREA
C
Production
Production
B kanban
kanbans Move
attached
direct the 2 kanban
to finished
production detached
quantity
sequence PROCESS 1 PROCESS 2
PRODUCTION KANBAN (A-B-C)

A Production Kanban is attached to every container in the outbound stock area at Process 1. When
Process 2 comes to remove a container of parts, the Production Kanban is 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 Production Kanban is
attached to it and it is placed in the outbound stock area ready for withdrawal by Process 2.

Kanban Signaling : Kanban Cards
Two Card System / Move Card
Downstream work center: K123
Part number : 33311-3501 Stock location no.: A-12
Container capacity : 50
No. of kanban released : 7 of 12 Stock location no.: A-07
Upstream work center: Y321

Kanban Signaling : Kanban Cards
Two Card System / Production Card
Work Center no.: Y321

Part number to be produced: 33311-3501
Container capacity: 50 units
Stock capacity at which to store: A-07
Materials Required:
Material no. 33311-3504

Stock location: A-05
Part no. 33825-2474

Stock location: B-03

Kanban Signaling
Calculations
Kanban Size

Kanban Signaling : Calculations / Kanban Size
METHOD
Kanban Size
Basic kanban
size calculation
PLUS demand
variation factor
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: Calculations / Kanban Size
Example 1
Dd x R x MAD
Kanban
Daily Replenishment
Item MAD Replenishment
Demand, Dd Time, R (days)
Point
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

Another Example
Our customer shipments last year were 100,000 of part A, 250,000
of 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.
Dd x R x MAD
Part A: 417 x 2 x 1.50 =
A = 1251 parts B = 5210 parts C = 2000 parts

Process Capability METHOD

Alternative kanban
size calculation
- Establish daily rate for all items in the process. based on process
capability
- Total run time required.
- Hours available for the process. ( Breaks, Lunches, Historical
Downtime )
Formulas
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)

EXAMPLE 1
Item Daily Demand Run Time/Pc Total RT
A 500 x 5 sec = 2500 sec
B 900 4 sec 3600 sec
C 750 7 sec 5250 sec
D 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 : (continued)
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)
Item Daily Demand x3 Kanban Size

A 500 * 3= 1500 piece Kanban
= size 1500 pcs
B 900 2700 pcs
C 750 2250 pcs
D 500 1500 pcs
E 500 1500 pcs
F 1200 3600 pcs

Kanban Signaling
Calculations
Number of Cards

Kanban Signaling
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 of Cards / 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 a
storage 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
Number of Cards
# of Cards = Average Demand during Lead Time plus Safety Stock

Size of the Container (Kanban Size)
Where Lead Time is a function of the processing time per container

at the upstream supplier station and the waiting time at the down
stream production process and for material handling.

Kanban Signaling: Kanban Bins and Cards
EXAMPLE
Kanban
Kanban Bin
Item Bins/Cards
Size Capacity
Required
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 Signaling
Demand Patterns
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)
Average
Actual
Demand
Predictable Demand.

Kanban Signaling
Demand Patterns
(Demand)
One or Two Customer Seasonal
(Time)

Kanban Signaling
Demand Patterns
Unpredictable
(Demand)
(Time)

Kanban Signaling
Demand Patterns
Components
Form Mach Finish Pack
Push
Replenishment
time to Customer
Pull
Replenishment
time to Kanban Replenishment
time to Kanban Replenishment
time to Customer
Highest level of commonality, closest to the customer.

Kanban Signaling
Sequencing / Mixed Modeling

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
Example
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.
2. Lay in the 12 Minute product sequence in the most rhythmical fashion while
not exceeding (6) As, (3) Bs, and (2) Cs
=ABACABACABA
Kanban Signaling: Signals, Options, and Presentation
Two Bin Replenishment
No Work Full Full
Work till bin is full Empty Full
Something is
wrong in the Empty Empty
system

Multiple Container Kanban
Full Full Full Full Full Full
1 of 3 2 of 3 3of 3 1 of 3 2 of 3 3 of 3
Do not work
Empty Full Full Full Full Full
1 of 3 2 of 3 3 of 3 1 of 3 2 of 3 3 of 3
Do not work
Empty Empty Full Full Full Full
1 of 3 2 of 3 3 of 3 1 of 3 2 of 3 3 of 3
Do not work
Empty Empty Empty Full Full Full
1 of 3 2 of 3 3 of 3 1 of 3 2 of 3 3 of 3
Work to fill 3 bins

Empty Empty Empty Empty Full Full
1 of 3 2 of 3 3 of 3 1 of 3 2 of 3 3 of 3
Work to fill 3 bins

Empty Empty Empty Empty Empty Full
1 of 3 2 of 3 3 of 3 1 of 3 2 of 3 3 of 3
Work to fill 6 bins

Empty Empty Empty Empty Empty Empty
1 of 3 2 of 3 3 of 3 1 of 3 2 of 3 3 of 3

Basic Information for Kanban Card
Quantity Per Container Number of Cards

(1 of 3)
Part Number
Description
Consuming Process
Supplying Process
(Location)

Optional Information for Kanban Card
Bill of Materials
Drawing Numbers
Labor Information
What do you need?
Etc...
Remember: Changes, require card maintenance.
Bill of Material, Process changes, etc...

Visual Signals
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
material :
Traditional Cards
Containers
Painted areas on floor
Totes
Bins
Andon Lights
Golf Balls

Card Examples

Card Examples

Signal Kanban = Single card or lot size greater than

replenishment quantity
Replenish Point Lot Size

2 Bins 10 Bins
Part Number
Description

Non- Replenishable Cards

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...
Quantity Per Container Number of Cards

(1 of 3)
Part Number
Description
Consuming Process
Supplying Process (Location)

KANBAN CARDS = $$ MONEY $$$
DO YOU LEAVE YOUR MONEY LAYING

AROUND, UNATTENDED??

Wait
Work
Board

Schedule Board PART#44367 PART # 58221 PART # 28873
1 2 3
PART #78651 PART # 34529 PART 38994
4 5 6
WHEN THE NUMBER OF CARDS EQUALS
THE STARTING POINT( EX. 3 CARDS)
THEY MOVE TO SCHEDULE SIDE.

Visual Kanban Board
Part Number
123456
126574
123244
123209

Visual Kanban Board

Time Slot Board
7-8 Part Number
Description
8-9 Part Number

Description
Time of Day
9-10
10-11 Part Number
Description
Part Number
Description
11-12 Part Number

Description
12-1
Part Number Part Number Part Number
1-2 Description Description Description
Part Number
2-3 Description
Jobs to be completed
Visual Presentation
Visual metal cards bend and put on rail.
Consuming
Process
Supplying
Process
Replenish Point Lot Size
2 Bins 10 Bins
Part Number
Description

How to Cards get Back to the Previous Process ?
Drop off at process

Central card collection
Collection point for vendor cards
Use visual signals vs. cards
Kanban Collection Post
Whatever works for you !!
MINIMIZE NON-VALUE ADDED !!

THINGS TO BE CAUTIOUS OF!!

Kanban Signaling: Kanban Rules
According to Taiichi Ohno

The Pull System as defined by Taiichi Ohno cannot sustain its
effectiveness unless the following rules are strictly adhered to:
Upstream Processes are authorized to produce by
Downstream Processes 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 Function
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 cause solution

3-01 Kanban

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3-01 Kanban

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Kanban Signaling

Copyright NN, Inc. 2004 Company Confidential

The Toyota Production System

Cost reduction through relentless elimination of waste -

The two pillars of Toyotas Global Production System

Copyright NN, Inc. 2004 Company Confidential

Continuous Flow of Production

Just-In-Time Production Self-Stop Automation

Copyright NN, Inc. 2004 Company Confidential

Kanban (Japanese) : Card or Visual Record.

In The Modern Lean Terminology

A Kanban is a Visual Information System

A SIGNAL THAT AUTHORIZES PRODUCTION

Copyright NN, Inc. 2004 Company Confidential

Kanban has Four Elements:

Anything else may not be true Kanban

Copyright NN, Inc. 2004 Company Confidential

The best Kanban is No Kanban

Kanban is a compromise by nature:

We are not able to connect our processes,

Kanban means there will be inventory!

Copyright NN, Inc. 2004 Company Confidential

Pillars of Just In Time

The Three Main Principles of JIT :

Copyright NN, Inc. 2004 Company Confidential

Does a Supermarket fit any production environment ?

Ideal Production Environments for Supermarkets :

High Commonality of parts

Copyright NN, Inc. 2004 Company Confidential

Copyright NN, Inc. 2004 Company Confidential

Copyright NN, Inc. 2004 Company Confidential

Before Manufacturing Process Improvement

After Manufacturing Process Improvement

After Replenishment System Improvement

Copyright NN, Inc. 2004 Company Confidential

Push vs. Pull

Copyright NN, Inc. 2004 Company Confidential

Push vs. Pull

Kanban signals Full containers

Prerequisites of a Kanban Pull System

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

Quick Changeovers : Set-Up Kaizen

How Does a Kanban System Work ?

Single Card Kanban :

Copyright NN, Inc. 2004 Company Confidential

Single Card Kanban

Outbound Outbound Outbound

When stock is removed place When stock is removed place

Workstation Full Container

Kanban card Container being filled

Production Box Container being emptied

Copyright NN, Inc. 2004 Company Confidential

Two Card Kanban

A Two Card Kanban is used when WIP cannot be effectively

In this System Two Cards are used :

Move (Conveyance) Card : To authorize the Movement of material

Production Card : To authorize the Production.

Copyright NN, Inc. 2004 Company Confidential

MOVE KANBAN (1-2-3)

Copyright NN, Inc. 2004 Company Confidential

PRODUCTION KANBAN (A-B-C)

Copyright NN, Inc. 2004 Company Confidential

Two Card System / Move Card

Downstream work center: K123