Introduction

In today’s fast-paced manufacturing world, efficient inventory management is crucial for success. This article will share insights into the benefits of Kanban and how manufacturers can implement it effectively.

The Wheelhouse Journey with Kanban

As an industrial engineer, Dale Mandeville – founder of Wheelhouse – initially learned about inventory management philosophies while working at a machine shop and visiting a medical device manufacturer. Later, Dale became the Operations Manager at another medical device manufacturer, where he truly saw the power of Kanban in action. His team managed to reduce inventory by 60%, freeing up significant cash flow. This success story laid the foundation for Dale’s belief in Kanban.

Kanban Philosophy and Principles

Kanban, a methodology developed by Toyota, revolves around visual cues and limiting work-in-progress. Its core principles include:

• Visualization: Displaying work to improve transparency
• Limiting WIP: Ensuring manageable workloads
• Managing flow: Continuously monitoring and optimizing processes
• Explicit policies: Clear guidelines for work processes
• Feedback loops: Regular reviews and adjustments
• Collaborative improvement: Team-based problem-solving and continuous improvement

Setting Kanban quantities allows us to control total inventory, ensuring we have the right amount of stock at all times.

Kanban vs. Just-In-Time

It’s essential to understand the difference between Kanban and Just-In-Time (JIT). JIT relies on projections from bills of materials to predict inventory needs, which can lead to inaccuracies. In contrast, Kanban uses actual consumption data to trigger inventory replenishment. This provides a more reliable and responsive system.

Implementing Kanban

Here’s how you can implement Kanban in your manufacturing process:

1. Kanban Board Setup
Set up Kanban boards for different stages of production, including the warehouse, purchasing, and assembly floor. Each Kanban card represents a specific quantity of inventory and triggers actions like purchasing or moving stock.

2. Replenishment Loops
Establish replenishment loops between the warehouse, purchasing department, and receiving. Another loop connects the assembly floor to the warehouse and back to assembly. This ensures a continuous flow of materials, which minimizes delays and overstocking.

The Kanban Process:
a. Card: When inventory is used, a Kanban card is removed.
b. Drop in bin: The card is then placed in its designated collection bin.
c. Collection: The cards are collected multiple times a day and moved to “Purchasing”
d. Scanning: Each card is scanned to generate a purchasing order.
e. Receiving: The Kanban cards are moved to the “receiving” stage where they await the order to arrive from the supplier.
f. Warehouse: After the shipment arrives, the Kanbans are moved back to their original sleeve in the Warehouse, completing the replenishment loop cycle.

3. Kanban Calculations:
Use a simple formula to determine the minimum number of Kanbans needed:

MOK = (LT + SS + OF) × DU
• LT = Lead Time in Days
• SS = Safety Stock in Days
• OF = Order Frequency in Days
• DU = Daily Usage

Example Calculation:
LT = 5 days, SS = 2 days, OF = 1 day, DU = 100 units/day
MOK = (5 + 2 + 1) * 100 = 800 units.

Overcoming Challenges

Various economic challenges or shipping delays may force manufacturers to carry higher inventory levels. Despite these challenges, Kanban remains a resilient system; it is adaptable to changing conditions, thereby ensuring that manufacturers can respond effectively to unexpected disruptions.

Integrating Kanban with Wheelhouse

Wheelhouse is our software designed to enhance inventory management. Kanban is an integrated part of Wheelhouse, and it provides a seamless way to manage inventory levels. The Kanban boards within Wheelhouse allow our customers to manage inventory effectively and visually. By scanning Kanban cards, items are automatically added to the purchasing queue, streamlining the entire process. This reduces manual errors and ensures timely replenishments that improve clarity, efficiency, and control over inventory.

Implementing Kanban with the help of Wheelhouse software can transform inventory management for manufacturers. By using actual consumption data and integrating processes, manufacturers can ensure they always have the right amount of stock. Whether you’re a small company or scaling up, Kanban offers a robust solution for managing inventory effectively.

Feel free to reach out if you have any questions or need assistance with implementing Kanban in your operations. Together, we can achieve operational excellence and drive success.