Page 68 - How To Implement Lean Manufacturing

Inventory and Variation 49

Rule No. Rule Function
1 Later process goes to earlier Creates pull, provides pick up or
process and picks up the number transportation information. The
of items indicated by the kanban replenishment concept is formed
here
2 Earlier processes produces Provides production information and
items in a quantity and sequence prevents overproduction
indicated by the kanban
3 No items are made or transported Prevents overproduction and
without a kanban excessive transportation
4 Always attach a kanban to the Serves as a work order
goods
5 Defective products are not sent to Prevents defective parts from
the subsequent process advancing; identifies defective
process
6 Reducing the number of kanban Inventory reduction reduces waste
increases their sensitivity and makes the system more
sensitive

TABLE 3-1 The Six Rules of Kanban

• Parts movement information, the trans porta-
tion kanban—this is like a shopping list.
“The kanban method is
• Production ordering information, the pro-
the means by which the Toyota
duction kanban—among other things, this is Production system moves
primarily a production work order.
smoothly. ”
Kanban Rules Taiichi Ohno
From Toyota Production System
The Six Rules of kanban management provide several
unique functions. The rules and functions are listed
in Table 3-1.

Kanban Calculations
Let’s analyze a production kanban system. Recall that the kanban represents the entire
inventory in the system. To assure delivery to the customer we will use a management
policy with our finished goods inventory. It will involve the use of three types of fin-
ished goods inventory. To assure we have stock on hand for the normal pick ups by the
customer we will carry cycle stock. In addition, in order to provide supply to the cus-
tomer we will carry stocks to handle external demand variations and the internal supply
variations of the finished goods. Hence we need a buffer and a safety stock volume,
respectively. So our inventory management philosophy will include carrying three types
of finished goods inventories and each one will be statistically calculated to minimize
the total volume yet maintain a high level of customer service (in this case the level of