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Pull Production - Understanding Kanban: Extended Entry



A pull production system is based on customer demand. Basically it is a concept that each manufacturing component must be in line with another department in order to build a final part to the customer's expectations. Your business will become leaner because your production process is designed to only produce products that are deliverable. This leads to leaner business because you will not be housing excessive stock of finished or part-finished products.

A pull production system is often referred to as "kanban". Kanban methods use visual aids to show that you have completed a process or the process requires more work. kanban or pull production systems are not available for all businesses because of product types, lead times and stock holding arrangements

Toyota has a dual-card kanban system. There are two different types of kanban in the Toyota Production System:
1. Production kanban - the need to purchase more parts.
2. Conveyance kanban - the need to withdraw parts from one work center and deliver them to the next work center.

Not all companies use the kanban cards for their pull systems. Many companies simply use labels to identify that a container is empty or use areas in their warehouses or production departments to identify a container is empty and needs . Pull systems have been shown to reduce your lead times and the costs associated with production.

How a Kanban Production Control System works.
Again, a kanban system uses visual aids to control the movement of materials between different work stations. The name kanban referred to a Japanese sign shop that used a visual image on a sign to communicate the type of products that were sold. The Toyota Production System implemented kanban into their transport container. It is a card that is attached to the transport and storage containers. The purpose of the kanban card is to identify part number and the container capacity. There is other information on the card as well that provides easy, visual, signals to the employees. 


The kanban system is called a pull system because kanban is used to pull parts from one production stage and move them to the next stage when needed. In a pull system, the material movement only occurs when the work station needing more materials asks for it.

Here are the Toyota dual-card Kanban rules:
1. No parts will be made unless there is a production kanban to authorize production. If the kanban cards are not at a work center, the process will remain idle and the workers will perform other activities. This is the "pull" process in the kanban method.
2. There is only one kanban per container.
3. The containers with kanban cards will contain the same part with the same quantity.

Management must carefully regard the number of kanban at each stage in the process. They must do this because this number stands apart from work in process inventory at that stage in production. The kanban is attached only to full containers and once all the containers have kanban attached, the production will cease unless it is authorized by management. The dual card kanban system enables for productivity to be improved significantly. A manager can reduce the work in process inventory by removing one kanban from the system. Typically a reduction like this is done until a shortage of materials occurs and this shortage will indicate problems that were previously hidden by inventory. Common problems include accident, machine breakdowns, defective products, and production delays. Once you have detected the problem, you can identify a solution and set in place proper procedures to correct the problem.

There are various types of kanban systems that exist. Some companies use metal plates instead of cards or ping pong balls. General Motors uses kanban signals on the computer. The kanban system remains the same with each company, to tell the using department to inform the producing department how much and what product to produce depending upon the demand at the beginning, which is the sale of a product.

Kanban cycle times and forecast rates.
Depending upon the type of organization you are, the Toyota Kanban system may be cumbersome. There is another approach to kanban that you can consider. This is to simulate the container and card system with different cycle times, lot sizes, and the inventory system of your company.

In Toyota Kanban system, the containers represent the lot size that is called for by the container size. In the automated pull system, the lot sizes and cycle times are stored in computer files and the automated system will send a signal when the inventory diminishes to a point which means you need to remove a container from the production department.

The cycle time for a pull system is "the realistic amount of time it takes to manufacture or procure a specified amount of goods by a work center or from a supplier." This replenishment cycle time should closely resemble the lead time a vendor quotes to a purchasing department. For example, if you order 100,000 programs to be printed and you need them by a specific date, your inventory level should closely resemble what your vendor will quote you for printing time. Many companies can afford to keep a 6 month inventory on stock, while others need a 3 month cycle time. You should always consider changeover rate, expected sales, and forecast of capacity when you are working with cycle times.

Forecasting is a critical element in cycle times and in the entire manufacturing process. Some systems use forecasting to master a schedule and then make a push with their product based on this forecast. A pull system uses forecasting to turn a cycle time into a targeted inventory level. It is a unit forecast versus a gross forecast. A unit forecast allows for a specific time period to determine when an item will end. Some businesses use QuickBooks to track their inventory levels and set notifications to inform them when their cycle forecast is about to end.

Another tool in pull production is the buffer stock. The buffer is the "stock level that creates balance in the system." The buffer stock exists to permit products from being shipped in less time then your final assembly cycle time. A buffer stock helps your production of finished goods to be cycled in less time than a fabricated cycle time. You can come up with your buffer inventory by multiplying your cycle times by daily forecast rates.

With pull production, you must also consider the lot size. Usually the lot size for production is a combination of your daily forecast rate and your cycle days. The lot size must never be an unrealistic number because it will bottleneck the production process. The lot size can be set to a pace production and become a good proxy for the buffer.

As you can now see, the cycle times and forecast rates are the cornerstones of a pull system. The lot sizes and buffer stocks are simply added "levels" to the cycle times and forecast rates. The buffer stock level will be a good indication that you need to manufacture or procure goods. When the buffer stock starts to diminish, a signal should be sent in order to release a supply while you replenish the inventory. This can help you gauge just how long you can promise a customer when they purchase a product. For example, if you are a car manufacturing company, your customer will come in and order a new car and may customize the car to their needs and wants. The order will be sent to the manufacturing plant, who will evaluate the needed materials and inform the selling facility how long it will take to manufacture the car. If the manufacturing plant is dipping into their buffer stock, the pull production system will send a signal informing them how long it will take to replenish the stock and then manufacture the car.

Pull systems effectively combine cycle time with forecast rates to simplify inventory and production. When implemented properly a pull system will manage itself with only minor adjustments on your part.

Here are the things you need in order to implement a pull system:


  • A strong, flexible labor force to perform the small lot production.
  •  Quality material handling skills to keep all the products moving from one department to another.
  •  Continuous forecasting to constantly adjust the system to market demands and goods.
  •  Adherence to shop order due dates to make sure the buffer levels are maintained so the customer never has to wait.

 

Meeting customer expectations by improving lead time commitments will improve with the implementation of a pull system. Manufacturing discipline is the main discipline introduced in a pull system. It provides for a continuous improvement system to be set in place and enhance the overall flow of your inventory. Depending upon what type of industry you are in, a pull system should work for you. If you are in a repetitive manufacturing process or an assembly shop, then a pull system will help you.

 
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