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Subject: What is Kanban? rss

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The Soot Sprite
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Drawn by some of the polished pics on the main page, I read the game description and the few existing posts. I vaguely understand かんばん after reading the Wikipedia entry, but I still don't understand it.

Would someone please explain it in layman's terms; I have no background in economics or manufacturing.

This is my basic understanding:

d10-1 It may make sense to not stock excess inventory or to produce more parts to make the finished good than are required at any one time.

d10-2 Therefore customer demand (purchases of the finished good) should drive production of that good at the factory level, and therefore production and supply of the relevant components at the supplier level.

d10-3 This relies on an efficient system of notifying sales of the finished good to the factory and to the factory part suppliers.

After this I get a bit lost. What are kanban cards? If this is an ideal system, why does it fail?

More importantly, how does this manifest in the game?
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Mark Finch
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spritey wrote:
Drawn by some of the polished pics on the main page, I read the game description and the few existing posts. I vaguely understand かんばん after reading the Wikipedia entry, but I still don't understand it.

Would someone please explain it in layman's terms; I have no background in economics or manufacturing.

This is my basic understanding:

d10-1 It may make sense to not stock excess inventory or to produce more parts to make the finished good than are required at any one time.

d10-2 Therefore customer demand (purchases of the finished good) should drive production of that good at the factory level, and therefore production and supply of the relevant components at the supplier level.

d10-3 This relies on an efficient system of notifying sales of the finished good to the factory and to the factory part suppliers.

After this I get a bit lost. What are kanban cards? If this is an ideal system, why does it fail?

More importantly, how does this manifest in the game?


1) There are lots of reasons why this does make sense. Material stored at the line side is susceptible to damage, to mis-picking, and is a potential safety hazard. Furthermore, the organisation owning the stock before it is delivered to the line may not be the same one who is, the case of auto manufacture, assembling the vehicle. It is quite common for material to be stored in a supplier-owned warehouse outside of the assembly building; components are only paid for when they are called off and enter the assembly building itself. The stocking risks and costs are borne by the supplier and not the assembler: all the assembler is interested in is just-in-time delivery of the right component to the right place.

2) Ideally, for an auto manufacturer, you do indeed want to build to order as much as possible (i.e. to the vehicle option specifications provided by a known customer). However, the lead time to build and subsequently deliver a vehicle can be quite long - perhaps 16 to 20 weeks in some cases for volume manufacturers, especially if the assembly plant for the customer's chosen vehicle is physically quite distant from their location. It is often more appealing for a customer to purchase a vehicle close to their desired specification that is already in stock at a retailer. Predicting demand to build desirable vehicles for retailer stock is an important part of manufacturing order management.

3) Yes, supply chain management is extremely important. Again though, the logistical risk is often passed onto JIT (just in time) or SILS (supplied in line sequence) suppliers, who ensure that generic components (e.g. nuts and bolts) or specific components (e.g. the particular leather seat required for a specific vehicle) is delivered to the line side as needed. Kanban is evident when, for instance, the manufacturing execution system on the assembler side signals the stock management system on the supplier side that as 50 vehicles have now passed a particular point in the line since the last time they dropped off a tub of bolts, it's now time to deliver another one.
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Ben Hillyard
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spritey wrote:
Drawn by some of the polished pics on the main page, I read the game description and the few existing posts. I vaguely understand かんばん after reading the Wikipedia entry, but I still don't understand it.

Would someone please explain it in layman's terms; I have no background in economics or manufacturing.

This is my basic understanding:

d10-1 It may make sense to not stock excess inventory or to produce more parts to make the finished good than are required at any one time.

d10-2 Therefore customer demand (purchases of the finished good) should drive production of that good at the factory level, and therefore production and supply of the relevant components at the supplier level.

d10-3 This relies on an efficient system of notifying sales of the finished good to the factory and to the factory part suppliers.

After this I get a bit lost. What are kanban cards? If this is an ideal system, why does it fail?

More importantly, how does this manifest in the game?


In layman's terms a Kaban is simply just "a signal". It is way by which one step in a process signals, or tells, another that they need something or some action take. In Lean (A business methodology refined and perfected by Toyota) our goal is to eliminate steps or aspects of a process which do not add any value to the customer. To help us achieve this goal we employ the use of many different lean tools, one of these lean tools is kanban.

Since Kanban is simply just a fancy (Japanese) word for a signal we can use it in many different ways. One of these ways, like the one you asked about, is kanban cards. We use these cards in many different ways, the first, and probably main way, is to signal the material handler that more supplies are needed at a given location. For example, once a bin of say bolts is empty we will remove the kanban card from the bottom of the bin and hang it on a hook for the material handler to collect. This card will then contain all the needed information for the material handler to know which bolt needs to be replenished, how many of said bolt and where those bolts need to be restocked. The reason why using this method is so important verses the tradition method of just keeping a large quantity of bolts on hand is that now we can have a tighter control on quality, among other reasons. For example, if we are building a car transmission we know it needs 10(or more, I don't build car transmissions) casing bolts and so we would give the assembler only 10 bolts. This way, if at completion of this step in the process the assembler has one extra bolt they quickly know they missed one; however, if they had just a bucket of bolts they might not easy catch their mistake and just pass the defect on down the line.

This is just one small example and explanation around what Kanban is and how it can be useful. I hope it helps.
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