The following presentation is not my original work, rather it’s a collection of knowledge acquired from many sources. The intent is to demonstrate and present my learnings in the subject matter. Please feel free to comment and critique as you see fit.
Period: Used to calculate daily averages. For best representation of usage, period should be long enough to represent the expected demand (1 quarter or more).
Stable demand expected: Equal weight between forecast and past usage
Changing demand (up or down): Weighed more toward forecast than past usage
DA (Daily Average): Average daily usage of the part. Simple DA works if variation in the part usage does not vary more than 30% over the period the kanbans are calculated (usually in days, but can be in hours for internal, high speed replenishment to point of use).
SVLT (Supplier Vendor Lead Time): Time for the supplier to deliver replenishment, or how long products take if they leave the flow cell for outside processing (i.e. water wash in our cell). This includes:
Time to deliver signal or part
Time signal or part waits
Time sign or part is transformed
Delivery time to the consumer
Wait time at the consumer before part is available to use.
Cycle Stock: The standard inventory defined by the kanban calculation to cover demand while the replenishment cycle is in progress. This is the amount to cover normal demand. Key drivers are lead time to replenish and average demand.