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Work In Process under control

Before running with no inventory and the perfect one piece flow between your production lines or between you and your customers, KANBAN is the best way to put your Work In Process (WIP) inventory under control.

What are the root causes of a WIP inventory?

1. - You have processes considered as:

  • not flexible, i.e. not able to follow exactly the downstream demand. It is necessary to produce a minimum quantity which is not consistent with the demand. For example, your demand is 30 pieces and your processes cannot produce less than 500 pieces;
  • not reliable, i.e. without predictable output. Your processes have a lot of shutdowns and/or quality problems. You cannot forecast the quantity of good parts which will be produced during a defined period.

In these cases, it is necessary to have an inventory at the end of these processes in order to protect the downstream flow and insure always products availability.

KANBAN is the tool to control this inventory.

- Your global process has a decoupling point. At this specific stage, the lowest number of sub assemblies references allows to produce the maximum of finished good references. By storing these sub assemblies you can offset the lead time of the upstream processes and then, reduce the total lead time. With few references, this inventory is easier to manage and control.

KANBAN is one of the best method to control inventory at the decoupling point.

KANBAN principles

  • Kanban allows production based on inventory level and customers consumption. If the inventory is above a defined level or if there is no consumption, KANBAN will stop production.
  • KANBAN is a method to limit inventory to a maximum. It is not a method which insure a minimum inventory.

Key success factors

  • KANBAN works per default with a smooth demand: its sizing is more complex if your demand is variable and you want to optimize inventory;
  • KANBAN can be set-up very easily through a workshop but unfortunately only few KANBAN run correctly after few days or months.

Main root causes of implementation failures are:

  • sizing incorrect;
  • no ownership of the actors;
  • no rigor in execution;

To succed a KANBAN implementation you need to:

  • know some production figures like cycle time, change over time (not theorical but observed in real life);
  • understand production and change over constraints;
  • train and support the users till they understand the process and till all tools are correctly deployed (Sizing, Cards, Batch Building Boxes, Launcher, Storage layout, Audit).

2 families of KANBAN exist:

KANBAN based on stock level Simple method to schedule production. Can be used for simple cases.

KANBAN based on consumption A method able to schedule many type of production processes. More complex to set-up and size.

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