Kanban Deployment Part 2/6 – Kanban Card Logic

This is part-2 of a 6-part step-by-step series on kanban deployment.

After all the hard-work of designing kanban cards and kanban boards it’s finally time for kanban deployment! In this 6-part series we walk through the step-by-step kanban deployment process and point out a few kanban best practices on the way.

Kanban Card Deployment
Deploying kanban cards means matching each card with an incoming order or on-hand inventory. The process is deceptively simple. While it can easily seem very straight forward, card deployment can require much more time than intuition would have us believe. Successful card deployment requires discipline.

Logic
All on-hand inventory and the open orders must be divided into appropriate predetermined kanban order quantities (KOQs). Since each kanban card stands for that same predetermined quantity of items (e.g. 500 hex head bolts per card), ultimately, all cards will be either be linked to orders or on-hand inventory.

Initially, you’ll almost certainly find that many items have either too much or too little inventory. Once kanban card deployment has been completed, you should be able to categorize all items into one of the following 3 groups:

  1. Bleed Off Items
    Items in the Bleed Off category have more order batches than cards. It’s important that no new orders are generated for these parts. It is so important that new cards are not processed that you may have to take extra measures to ensure that the cards don’t get scanned. All cards for Bleed Off items should communicate this to workers with a visual cue. Consider a written warning like “Do Not Order” or even placing a cover over the card’s bar code.
    Before new orders are processed, you have to “bleed off” the excess inventory. Efficient work cells will use parts at a designated point, or Point of Use (POU), but they are not likely to have space dedicated for bleed off inventory there. You will have to stage clearly labeled temporary storage areas which will serve as a replenishment center for the part until the excess inventory gets consumed. Only once there is no more excess should any of that part’s kanban cards be scanned or processed.
  2. Expedite Items
    Items that are in the expedite group need swift, immediate action to ensure that business is not interrupted. These are the items that are too low in number and are in danger of stocking out. Failing to deliver is NOT a risk you should be willing to take, so it is important to expeditiously process orders for these items.
    Orders for items with multi-card solutions that must be expedited can be slightly challenging. One might reason that the best way to issue orders for these items would be to stagger them with approximate lead time gaps. That is, issue an order, then allow the planned number of workdays to pass and then issue another order.
    A schedule like that, however, can be tricky to keep track of and it definitely would not be easy to come up with the appropriate formulas in an Excel spreadsheet. Instead of trying to figure out a way to calculate and coordinate these multiple orders, place all of the orders at once.
    This doesn’t mean that all of the parts are received as one bulk order. Instead, keep the orders separate and ask your supplier to deliver at the same pace as lead time or with time gaps as close to lead time as possible. Each time an order arrives, you can match it with a card. After a few cycles of this, the replenishment system should be working naturally as it was designed.
  3. Steady State
    This is the ideal state. Items that are consumed in a very regular pattern might have a well-matched ratio of cards and batches of parts. When this is the case, shortages are not a threat, and excess parts are not being held in temporary storage areas. For items in this group, simply match up each card with the appropriate number of items in inventory or with incoming orders. You may see that some situations in which the cards end up don’t seem normal or balanced. For example, there are several items waiting to be consumed at POU and barely any are on order, or the reverse, when hardly any parts are available for use but there are several incoming orders. Don’t worry, though, because these quirks in the rhythm of the inventory flow will work themselves out.
    New kanban solutions have the potential to make great improvements to an inventory system, but changing too much at one time can overwhelm employees. Since they are key to the success of kanban, don’t deploy more than 500 kanban cards in your initial deployment.
    That concludes our review of the logic behind kanban deployment. In part 3 of this 6-part series we’ll take a closer look at the kanban deployment logic.

New kanban solutions have the potential to make great improvements to an inventory system, but changing too much at one time can overwhelm employees. Since they are key to the success of kanban, don’t deploy more than 500 kanban cards in your initial deployment.

That concludes our overview of the logic behind kanban card deployment. In part 3 of this 6-part series we’ll take a closer look at the case of Point-of-Use (POU) kanban deployment.

2019-05-29T08:55:28-04:00May 29th, 2019|Categories: Inventory Management, Lead Time Reduction, Lean Manufacturing, Supply Chain|

About the Author:

Aaron is the Marketing Director at Falcon Fastening Solutions, Inc. He is focused on sharing Falcon's unique approach to fastening and class C production component supply chain solutions with equipment manufacturers.

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