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Why Kanban Systems Fail and What You Can Do About it

Saifallah BenjaafarCenter for Manufacturing Logistics

Department of Mechanical EngineeringUniversity of MinnesotaMinneapolis, MN 55455

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Kanban

A “kanban” is a sign-board or card in Japanese and is the name of the flow control system developed by Toyota.

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Outline 1. The JIT context

2. Basic mechanics

3. Advantages

4. Limitations

5. Alternatives to Kanban

6. CONWIP systems

7. PFB systems

8. MTO/MYS systems

9. Conclusions

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Role

Kanban is a tool for realizing just-in-time. For this tool to work fairly well, the production process must be managed to flow as much as possible. This is really the basic condition. Other important conditions are leveling production as much as possible and always working in accordance with standard work methods.

--- Ohno 1988

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Just-in -Time (JIT)

A collection of principles aimed at reducing inventory, increasing throughput, and minimizing manufacturing lead times.

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Origins of JIT

• Japan’s attempt to become competitive with US and European manufacturers after WW II

• The Toyota Production System

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JIT principles

• Reduce setup times

• reduce batch sizes

• Reduce variability

• Reduce material handling

• Reduce defects and rework

• Reduce breakdowns

• Increase capacity

• Smooth production schedules

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JIT principles (cont.)

• Maintain constant WIP (limit WIP buffer sizes)

• Limit finished goods inventory and raw materials

• Synchronize operations within the factory

• Synchronize material delivery with suppliers and customers

• Improve worker flexibility and empower worker to make improvements

• Simplify workflow

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The Seven Zeros

• Zero (excess) lot sizes• Zero setups• Zero breakdowns• Zero lead times• Zero surging• Zero material handling• Zero defects

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Kanban Systems

A shop floor control strategy aimed at (1) reducing inventory, (2) simplifying workflow, (3) increasing throughput, (4) reducing cycle time, (5) improving customer lead times, and (5) improving quality.

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Mechanics of Kanban

Push vs. Pull: Kanban is a “pull system”

• Push systems schedule releases

• Pull systems authorize releases

Synchronous manufacturing: Pull signals ensure tight coupling between operations throughout the system

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Mechanics of Kanban (cont.)

• One card systems

• Two card systems

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Mechanics of Kanban (cont.)

Work Center Buffer Card Flow

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One-Card Kanban

Outbound stockpoint

Outbound stockpoint

Productioncards

Completed parts with cards enter outbound stockpoint.

When stock is removed, place production card in hold box.

Production card authorizes start of work.

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Two-Card Kanban

Outbound stockpoint

Inbound stockpoint

Production cards

Move stock to inbound stock point.

When stock is removed, place production card in hold box. Production

card authorizes start of work.

Move card authorizes pickup of parts.

Remove move card and place in hold box.

Move cards

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MRP versus Kanban

…

Lover Level Inven-tory

…

MRP

Kanban

…

Kanban Signals Full Containers

Lover Level Inven-tory

Assem-bly

Assem-bly

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Signaling

• Cards

• Lights & sounds

• Electronic messages

• Automation

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The Key Issue

How many Kanbans should we have at each stage of the process and for each product?

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Tradeoffs

• Too many Kanbans Too much WIP and long cycle times

• Too few Kanbans Lower throughput and vulnerability to demand and process variability

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Little’s Law

Cycle time = WIP/Throughput

WIP = (Cycle time)(Throughput)

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Example

• Four identical tools in series.

• Each takes 2 hours per piece.

• No variability.

• Constant WIP.

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The Penny Fab

WIP TH CT TH x CT123456789

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Throughput and Cycle Time vs. WIPT

hrou

ghpu

t (Jo

bs/h

r)

0 2 4 6 8 10 12 140

.2

.4

.3

.5

.1

WIP (Jobs)

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Throughput and Cycle Time vs. WIP (cont.)C

ycle

tim

e (H

ours

)

0 2 4 6 8 10 12 140

8

16

12

20

4

WIP (Jobs)

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The Case of an Unbalanced Line

• The maximum feasible throughput rate is the processing rate of the bottleneck

• Critical WIP = (Bottleneck rate)(Total processing time)

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The Impact of Variability

• Processing times are subject to variability, material handling is not instantaneous, processes are subject to breakdowns, demand is subject to fluctuation

• Longer cycle times and lower throughput

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Number of Kanbans at Toyota

• Number of cards = WIP

• Number of cards = D/QL(1 + )

• D: Demand

• Q: Container

• L: Raw processing time

• : safety (variability) factor

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Guidelines for allocating Kanbans

• Allocate Kanbans evenly in a balanced system

• Allocate more Kanbans to slower processes or processes with higher workloads

• Always protect the bottleneck

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Guidelines for allocating Kanbans (cont.)

• Start with current averages

• Gradually reduce Kanbans at stations that are always full

• Increase Kanbans at stations that are always empty

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Advantages of Kanban

• Simplifies workflow

• Synchronizes manufacturing

• Reduces WIP accumulation at all processes stages

• Improves performance predictability and consistency

• Fosters communication between neighboring processes

• Reduces defects and enables 100% inspection

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Advantages of Kanban (cont.)

• Encourages line balancing and process variability reduction

• Encourages focused and cellular manufacturing

• Y2K robust

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Limitations of Kanban Systems

• Ideal for high volume and low variety manufacturing

• Vulnerable to fluctuations in demand volume and product mix

• Vulnerable to process variability and machine breakdowns

• Inefficient in handling infrequent orders or expediting special orders

• Vulnerability to raw material shortages and variability in supplier lead times

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Alternatives to Kanban

• Constant Work-in-Process (CONWIP)

• Pull from the Bottleneck (PFB)

• Hybrid Make-to-stock/Make-to-order system

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Production Line

InboundStock

OutboundStock

CONWIP Cards

CONWIP

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Basic Configurations

• Constant work-in-process

• Input/output control

• Asynchronous operation

• Dispatching list

• Example: Flow lines

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CONWIP Control

PC

R G

PC

DD PN Quant–— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— ––––––— –— –––––

Dispatching list

LAN

. . .

Work Centers

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Basic CONWIP

Kanban

Multi-Loop CONWIP

Work Center Buffer Card Flow

CONWIP Configurations

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• A new job is introduced whenever one completes

• The next job is selected from a dispatching list based on current demand

• The mix of jobs is not fixed

• Priorities can be assigned to jobs in the dispatching list

• WIP level can be dynamically reduced

CONWIP Mechanics

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Advantages of CONWIP-based Control

• Accommodates multiple products and low production volumes

• Allows expediting and infrequent orders

• Less vulnerable to demand and process variability

• Less vulnerable to breakdowns

• Protects throughput and prevents bottleneck starvation

• Simpler to implement and manage

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Coupled and Uncoupled CONWIP Loops

Bottleneck

Buffer

Card FlowMaterial FlowCONWIP Card

JobCONWIP Loop

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Splitting Loops at Shared Resource

Routing A Routing A

Routing B Routing B

Buffer

Card Flow

Material Flow

CONWIP Loop

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Modifications of Basic CONWIP

Multiple Product Families:• Capacity-adjusted WIP

• CONWIP Controller

• Running a card deficit

Assembly Systems:• CONWIP achieves synchronization naturally

• WIP levels must be sensitive to “length” of fabrication lines

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Card Deficits

B

Bottleneck Process

Jobs with CardsJobs without Cards

Failed Machine

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CONWIP Assembly

Processing Timesfor Line B

Processing Timesfor Line A

Assembly

1

3233

2 4

1

Material FlowCard FlowBuffer

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Pull From the Bottleneck

Problems with CONWIP/Kanban:• Bottleneck starvation due to downstream failures

• Premature releases due to CONWIP requirements

PFB Remedies:• PFB ignores WIP downstream of bottleneck

• PFB launches orders when bottleneck can accommodate them

PFB Problem:• Floating bottlenecks

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Simple Pull From the Bottleneck

B

Material Flow Card Flow

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Make-to-order/Make-to-stock Configurations

• Build components and subassemblies to stock

• Build final assemblies to order

• Pull system for MTS

• Push System for MTO

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Conclusion

• There are Pros and Cons to everything

• Pull systems are one piece of the puzzle

• Change throughout the organization is essential

• An integrated supply chain strategy is critical

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• Factory Physics, W. J. Hopp and M. Spearman, Irwin, 1996 (and teaching notes)

• The Race, E. M. Goldratt and R. E. Fox, North-River Press, 1986

• QRM Revisited: Don't Push or Pull - POLCA, APICS Magazine, Vol. 8, No. 11, 1998.

References and Additional Reading

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• Industrial Engineering Graduate Program

• Master of Science in Manufacturing Systems

• Graduate Student Internships

• Center for Manufacturing Logistics

Additional Resources at U of M