Principles of Kanban - November 2016

1Marek.Piatkowski@Rogers.com
Principles of
Kanban
Introduction
Thinkingwin, Win, WIN
Principles of Kanban
Introduction to Kanban
Marek Piatkowski – November 2016

Principles of
Kanban
Introduction
Introduction - Marek Piatkowski
 Professional Background
 Toyota Motor Manufacturing Canada (TMMC) - Cambridge, Ontario from
1987-1994
 TPS/Lean Transformation Consulting - since 1994
 Professional Affiliations
 TWI Network – John Shook, Founder
 Lean Enterprise Institute (LEI) – Jim Womack
 Lean Enterprise Academy (LEA) – Daniel Jones
 CCM/CAINTRA – Monterrey, Mexico
 SME, AME, ASQ, CME
 Lean Manufacturing Solutions - Toronto, Canada
http://twi-network.com

Principles of
Kanban
Introduction

Principles of
Kanban
Introduction
What is a Pull System?
Pull

Principles of
Kanban
Introduction
TPS
(ToyotaProductionSystem)
is born
Roots of Lean
1950 - 51
1951

Principles of
Kanban
Introduction
Mr. Ohno's Idea
Food Mart
Supermarket
Warehouse

Principles of
Kanban
Introduction
Supermarket for Manufacturing

Principles of
Kanban
Introduction
Food Mart
Supermarket
Sign
Stockroom
The Supermarket Model

Principles of
Kanban
Introduction
The Supermarket Suppliers
Food Mart
Supermarket
Warehouse
Supplier Supplier
Stockroom

Principles of
Kanban
Introduction
“Shopping” at a Supermarket
 No Purchased Order required
 No schedule of what I need and when
 Supermarkets are open 24/7
 EVERYRYTHING is available – there are no shortages
 All Supermarkets (anywhere in the World) have a standard layout

Principles of
Kanban
Introduction
Can Supermarket principles work in Manufacturing?

Principles of
Kanban
Introduction
Pull System
 In a traditional operation Production Scheduling department generates
Information by issuing schedules to all departments to produce and to move
material.
 Toyota reversed that process. At Toyota only material movement generates
Information Flow - A Pull Signal (Kanban).
 When parts are “pulled” from the Supermarket, a signal (Kanban) is sent to the
supplying process to produce more.
 Schedule is issued only to the Pacemaker process.
 This is called a Pull System.

Principles of
Kanban
Introduction
Kanban System and Kanban Cards
 Kanban System is a practical tool of Just-in-Time manufacturing for controlling
production (Production Kanban) and delivery of parts and materials
(Delivery Kanban)
 The word Kanban in Japanese means “signboard”.
 A Kanban card signals what to produce or to deliver necessary parts, in necessary
quantities, at the necessary time, in the most economical manner
 What is needed
 When it is needed
 In the needed amount
 We control levels of inventory through a use of Kanban Card
 We can easily tell what parts we have and what parts we need – we do not waste
time looking for parts

Principles of
Kanban
Introduction
Kanban System
 Each process maintains a small supply of parts necessary to produce a final
product.
 Parts are stored in containers. The amount of parts per container is usually small,
pre-defined and always the same.
 A Kanban card is always placed inside or attached to a new container. When there
are only few parts left in a container a light signal is turned on and the Kanban card
is placed in the Kanban post.
 Within few minutes an assembly stock person responds to the signal and collects
Kanban cards. These cards are treated as a signal to replace used up parts by
either delivering a container of new parts from the parts storage to the linesite, or
by producing new parts in a different location of the process.

Principles of
Kanban
Introduction
Two Types of Kanban
KANBAN
1. Production
Kanban
(what to produce)
2. Delivery
Kanban
(what to deliver)
In process
Kanban (flow)
Internal
Kanban (delivery)
External
Kanban (Supplier)
Signal
Kanban (batch)

Principles of
Kanban
Introduction
Traditional Production Scheduling method
Results = Long lead times and poor efficiency
Warehouse
Production
Control
Op. 1 Op. 2 Op. 3
Weekly
Schedule
Shipping
ScheduleWeekly
Schedule
II I
Weekly
Schedule
Factory

Principles of
Kanban
Introduction
How is Kanban System operating?
Shipping
Production
Control
Op. 1
Shipping
Schedule
Factory
F I F O
Op. 3Op. 2
Kanaban
Kanban
Result = Shorter lead times and higher efficiency

Principles of
Kanban
Introduction
Kanban Loops

Principles of
Kanban
Introduction
Production Kanban
KANBAN
1. Production
Kanban
(what to produce)
2. Delivery
Kanban
(what to deliver)
In process
Kanban (flow)
Internal
Kanban (delivery)
External
Kanban (Supplier)
Signal
Kanban (batch)

Principles of
Kanban
Introduction
Production Planning Process

Principles of
Kanban
Introduction
What is Production Planning
 Plan production in order to:
 balance Manpower, Materials and Machines
 produce correct volume, mix and sequence and
 make a product that meets the Customer Demand
 at the Lowest Total Cost
 and deliver the final product on time

Principles of
Kanban
Introduction
Production Planning Challenges
 Forecast vs. actual Sales orders
 Changing Customer orders
 Quality problems
 Premium shipments
 Unplanned overtime effect on Supply Chain
 Overproduction
 Engineered vs. Demonstrated Capacity
 Planning and Leveling week to week
 Inventory fluctuation
 Executive Monthly Performance Review

Principles of
Kanban
Introduction
Planning based on Forecast (MRP)
 Traditional method of scheduling production is to use the
Sales Forecast to:
 Order raw materials and purchased parts
 Schedule production on weekly basis
 The problem with Forecasts is that:
 They are not accurate (50% - 70%)
 Customer demand changes all the time
 This quite often results in:
 Long lead times
 Frequent schedule changes due to parts shortages
 Overproduction
or
Customer Forecast
Shipping History

Principles of
Kanban
Introduction

Principles of
Kanban
Introduction
Production Kanban System
 In the TPS (Toyota Production System), a unique production control method called
the “Kanban system" plays an integral role
 The Kanban system has also been called the "Supermarket method" because the
idea behind it was borrowed from the grocery supermarkets
 At Toyota, when a process refers to a preceding process to retrieve parts, it uses a
Kanban to communicate which parts have been used.

Principles of
Kanban
Introduction
Supermarket as a Production Buffer
Make to StockShip to Customer

Principles of
Kanban
Introduction
Kanban based Production

Principles of
Kanban
Introduction
Production Kanban
Part Number Part Description
Location in the
Warehouse
Raw Materials requiredQuantity to produce
Production Line
Routing:
sequence of
operations

Principles of
Kanban
Introduction
Production e-Kanban
Production
Line
Quantity to produce
Raw Materials required
Packaging instructions
Job duration
How long it should take to produce this order

Principles of
Kanban
Introduction
Role of Production Control Department
 There is a very clear customer/supplier relationship between processes
 There are several techniques that can be employed but the major focus must
remain on releasing production instruction in a manner that maintains the
customer pace and best possible use of existing resources
 The flow of material and information as designed by the shikumi is so vital to
Toyota that they actually have a department that controls and monitors
performance throughout their facilities
 This department is called Production Control. It is one of the most powerful
departments within the plant and the Corporation

Principles of
Kanban
Introduction
Delivery Kanban
FIAMM Technologies - Kanban Loop - Line to F/Gs Storage
Part Number Warehouse Storage Location
YF1T-13A803-AC B5
Part Description Container Type
YF1T-13A803-AC Ford AM80S Full Size Black Returnable
Production Line # of Parts per container
Line 5 390
Special Instructions # of Boxes per Skid
n/a
KANBAN
1. Production
Kanban
(what to produce)
2. Delivery
Kanban
(what to deliver)
In process
Kanban (flow)
Internal
Kanban (delivery)
External
Kanban (Supplier)
Signal
Kanban (batch)

Principles of
Kanban
Introduction
Delivery Kanban – Purpose
 A visual signal to the Supplier (internal or external) to deliver materials consumed
by a manufacturing process
 The only authority to move or deliver material - No Kanban; no delivery
 Represents a standard pack of parts.
 It also serves as a container identification
 We control our inventory levels through the use of Kanban inside the warehouse or
the factory
 We can easily tell what parts we have and what parts we need – we do not waste
time looking for parts
 The most common way is with a Kanban Card – but there are many other ways to
signal a need for material delivery

Principles of
Kanban
Introduction
Format of a Delivery Kanban Card
Part
Description
Warehouse Location Delivery Location

Principles of
Kanban
Introduction
Types of Kanban - Signal
Card Container
LightEmpty space Electronic
Ball

Principles of
Kanban
Introduction
Purchased Parts Kanban – cards and containers
 These are Material Delivery Kanbans
 These cards and containers are used to control flow of parts from the Warehouse to
manufacturing Mini Markets or Point-of-Use locations
 These Kanbans will be collected several times per day in order to deliver parts to
manufacturing Supermarkets

Principles of
Kanban
Introduction
Kanban is a Signal
It could be an empty container
Or it could be a card – “Shopping list”
31Marek Piatkowski - F.S.P. Consulting Inc.

Principles of
Kanban
Introduction
Container as a Kanban signal

Principles of
Kanban
Introduction
Delivery Kanban

Principles of
Kanban
Introduction
Supplier Kanban card
 Example of Supplier Delivery Kanban
 Used only in the Purchase Parts Warehouse to order parts from outside Suppliers
 Should not be found outside the Warehouse
 These cards should only be used by the Warehouse and Purchasing personnel

Principles of
Kanban
Introduction
Operating Rules - Kanbans
 Every box, every tray, every container must have a Kanban card attached to it.
 All parts must be stored in one of the three designated locations:
 Supermarkets storage
 Point-of-use (Mini-Market) storage
 WIP – Flow racks, work stations
 Place for every part and every part in its place
 Inventory is controlled by the number of Kanban cards in each loop
 Need more inventory – add more Kanban cards
 Reduce inventory – pull out Kanban cards

Principles of
Kanban
Introduction
Operating Rules
Kanban Cards
 All permanent Kanban cards and returnable Kanban containers must be treated as
a valuable commodity and a Company property
 Do not throw away any Kanbans cards or containers without an approval from the
Material Management group
 If any Kanbans are found out of place, please report them to the Materials
Management group or your Leader
 For low volume products (not stored in a Supermarket) we will issue a temporary
one time “Make to Order” Kanban card – these cards can be disposed at the end of
the process

Principles of
Kanban
Introduction
Delivery Kanban – how does this work?
Purchased Parts
 Purchased parts will be delivered directly to the Point-of-Use or to the Mini Market
in your area – you no longer need to go to the Warehouse
 If parts that you need are not in the Mini Market or at the Point-of-Use notify your
Supervisor
Delivery Quantities
 There will be a standard quantity of parts in every tray and container, as specified
by a Kanban card
 All Purchased Parts will be in stored and delivered in easy-to-use containers with
small quantities of parts inside.

Principles of
Kanban
Introduction
Delivery Kanban – how to order parts?
 When ordering parts from the Supermarket order only what you need – one
container or one Kanban at a time
 When you empty the container, return it to a designated location in the storage
rack (Mini Market) – for empty Kanbans
 Return all used Kanbans to a Kanban collection post
 Pick up the next container only if you need more parts
 When you finished the job and you have a partial container put the container on a
shelf in the Mini-Market - this partial container should be used first next time you
run this job

Principles of
Kanban
Introduction
What is
Kanban ?

Principles of
Kanban
Introduction
Lets all Pull Together

Principles of
Kanban
Introduction
Changing the World. One Transformation at a time
This presentation is an intellectual property of W3 Group Canada Inc.
No parts of this document can be copied or reproduced
without written permission from:
Marek Piatkowski
W3 Group Canada Inc.
iPhone: 416-235-2631
Cell: 248-207-0416
Marek.Piatkowski@rogers.com
http://twi-network.com

Principles of
Kanban
Introduction
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