This is part 3 of a 3-part series on special kanban cards.
So far in this series on special kanban cards we learned about spike cards, various scenarios that call for spike card deployment, and tips for properly deploying spike cards.
In this final article, we learn more about transfer kanban cards and serialized kanban cards.
Transfer Kanban Cards
Transfer cards are similar to regular kanban cards except they are only used to move parts within a facility, rather than order them from an external or internal supplier. Sometimes, a single part might be located at multiple point-of-use (POU) locations within the same facility. In such a situation, it’s possible that only one location might use regular kanban cards to trigger replenishment orders. Secondary locations would only request a transfer of items from that initial POU location to their own.
Consider the following example. A particular item is consumed at three different locations within a facility. The item is consumed in higher volume at the first location than it is at the second, and the second consumes more items than the third.
Because the first location has the highest demand, orders of that part are received there and stored there. This is logical when you consider that the highest demand POU is the POU with the highest risk of stocking out. Storing inventory at the highest demand POU reduces that POU’s risk of stockout. When the second or third locations need more parts, they simply send a signal, or transfer card, to the first location for refills. This system works similarly to a regular kanban card. That is, the timing of the card signal matters. The lead time and quantity limitations are taken into account. Transfers can be timed with a two-card system or by using a reorder point.
In a situation like this, only the first location would use regular kanban cards to trigger replenishment orders from external suppliers. The second and third locations would feed off that one by sending a transfer card.
It’s vital it isn’t possible to confuse transfer cards with regular kanban cards. You don’t want a transfer card to accidentally trigger a replenishment order to the supplier. To prevent that from happening, consider implementing a unique design for your transfer cards. Utilizing a size or orientation for the transfer card different from regular kanban cards can help. If regular kanban cards have a vertical layout then give a horrizatonal layout to your transfer cards. A graphical element on the card can also force people to recognize as different from a typical kanban card. A simple stripe of color across the card or having the transfer cards printed in a unique color is often enough to get people’s attention. Of course, always ensure employees are properly trained to identify and handle all kanban cards in the appropriate way.
Serialized Kanban Cards
Some sites practice serializing or numbering kanban cards so that each card uniquely identifies itself from others in a series of cards. For example, an inventory item with 4 kanban cards would have one card numbered 1-of-4, another numbered 2-of-4, and so on. Cards are then deployed in numerical order. The first card travels with the first open order, the second card travels with the second order, etc.
Theoretically, this approach improves audit accuracy since it’s easily noticeable when a card is out of order, thus revealing a problem that exists somewhere within the flow of materials or the proper handling of kanban cards. When a card is found to be out of sequence, a root-cause analysis would then be conducted to determine why the error occurred.
Of course, this is idealistic. Realistically, there are so many benign reasons for cards to be out of order. Maybe card number 3 is behind card number 2 because there is a delay with an order. Maybe one or more workers don’t understand the standard work. Maybe multiple bins emptied at the same time and the cards were simply processed out of their numerical sequence. In the real world, people working quickly simply don’t have the time or attention to maintain such tedious card ordering techniques.
Furthermore, it is likely a waste of time to investigate the order of cards unless it is somehow contributing to catastrophic losses or failures within the system. Lean management principles warn of the dangers of over-processing. In short, over-processing is wasteful. Investigating the root cause every time a kanban card is found to be out of sequence is a prime example over-processing.
A common assumption is that serialized kanban cards ensure that requirements such as lot traceability and FIFO (First In First Out) are strictly adhered to. FIFO and lot traceability are often required in the case of perishable items such as food, pharmaceutical products. However, it’s important to understand that neither FIFO nor traceability will be better maintained simply because kanban cards or packages have numbers printed on them.
Serialized cards might help keep track of items, but they won’t control the movement. Instead, the entire order management process must be developed to ensure the desired movement and consumption of materials. For example, you might require that order paperwork travels with every order and that the paperwork is routinely verified and approved for usage. Furthermore, you might require that only one order is at the point of use at a time. In any case, just know that material flow order will not happen simply because kanban cards are numbered in any particular way.
Of course, every facility and process is different. It’s possible that serializing cards may add value to your particular system. It’s also very probable that serialized kanban cards will cause your facility more work than reward. In short, serialized cards typically don’t produce a valuable outcome and are essentially a waste of time. If you feel passionate that serialized cards can add value, be sure to clearly define the specific management problem you’re attempting to solve and exactly how serialized cards will help you to do that.
That wraps up this series on special kanban cards. If you’re interested in learning more about kanban or other lean inventory management or supply chain optimization topics check out our knowledge center for tons of additional free content.