Page 70 - How To Implement Lean Manufacturing

Inventory and Variation 51

What Does the Kanban System Really Do?
Think for a moment about a perfect stockless (almost) manufacturing system. It would
have a cell where all the necessary processing steps are connected with zero inventory
between stations, one-piece flow, operating with 100 percent availability and 100 percent
yield, and hence the steps would operate in total synchronization. We would simply tell
the operators to keep one unit of production in the finished goods inventory and if the
customer came and removed a unit, then and only then would we replace it. In this
system, with 100 percent on-time delivery, once the customer withdrew an item, it
would signal replenishment, and in total synchronization all stations would spring into
action and another would be produced, almost instantaneously. The perfect pull pro-
duction system. Once a customer arrived, product was ready; however, If the customer
did not withdraw a product, no production would occur. One hundred percent on-time
delivery, with no overproduction, a near perfect Lean system. This, of course, would
only occur in a perfect—therefore, non-real—system. Unfortunately, we mortals need
to deal with the realities of life.
These realities of life include several issues.
First and foremost is the issue of variability. Did we not say it was inevitable? Since
perfect synchronization is not possible, 100 percent on time delivery and zero overpro-
duction, are also not possible. Though these ideals might be ones to shoot for, they
are typically impossible and many times impractical.
Variations always exist in rate, quality, people, machine
and environments. They are inevitable and omni-
“Don’t be fooled. The sys-
present. All of this variation creates, guess what? tem optimum is not neces-
You got it, inventory. So to compensate for the varia-
sarily the sum of the local
tion, we need some buffers. This causes our total
inventory to rise and Little’s Law tells us our lead optima. ”
time will increase, which likely will cause us to hold Unknown
even more inventory as finished goods.
So how do we reduce the inventory—that is, avoid overproduction of both the local
(WIP) and finished goods, bringing inventory to its minimum—and still supply the
customer with high levels of on-time delivery?
Either task can be done simply, but doing both simultaneously—and well—is the
trick of a good business system.
And that trick is kanban.
The essence of kanban is twofold.
First, it is direct communications to produce material—in other words, to supply
the customer. It is the pull signal to produce. Once the product is withdrawn by the
customer, at that moment the kanban tells us exactly what the customer is using, and
hence what the customer will need later. This kanban is sent as fast as possible to the
production line. In essence, the kanban system is doing the “talking” to the production
system, telling it to produce because some product has been removed. This system eas-
ily bypasses all the accounting and planning systems that tend to not only delay this
signal but also add variability along the way. The kanban system is dealing real-time
with the realities of what is happening on the line. The planning systems deal with what
the programmer believed should be happening. I can say with certainty, that when it
comes to triggering production, with the minimum lead planning time, no planning
system can come close to kanban. In this manner, the kanban system not only assures
supply to the customer, but does so with the minimum planning time.