How Kanban's reduce lead times?
PeterPaul committed to a Lean transformation in 2004. Lean is a growth strategy with a systematic and relentless pursuit to eliminate unevenness, instability and waste in all enterprises of the supply chain. We focus on flow and where we cannot flow we pull. Suppliers and customers are physically disconnected from our processes and thus pull is necessary to minimize lead times. We pull by utilizing Toyota's visual replenishment system called Kanban.
What is in it for everyone?
- Short lead times
- Reduced inventory levels (higher inventory turns - synchronize your production more closely with the purchased material receipts)
- Increased flexibility as product demand fluctuates
- Improved supplier performance
- Leveled Demand resulting in:
- Improved quality and delivery performance to the customer
- Right sized and planned inventories creates smoother production flow and improved cash flow
- Increased communication (Kanban signals) enhances flexibility and enables faster reaction to changes in demand
Steps to Implement a Kanban Agreement with PeterPaul
Agree on the Products
- Not all products belong on Kanban Pull Systems
- Look for higher/consistent volume products
Agree on the Process
- Establish kanban supermarkets
- Consumption based replenishment
- Signaling mechanism
- Adjustment process
- Identify the "win-win" scenario that mitigates risk through the entire supply chain
Establish Blanket PO's and Kanban Agreements
- Establish blanket PO's that will cover the periodic releases of the kanban amount
- Create and sign a Kanban Agreement (if required)
- Focus on long term partnerships NOT on the "Order"
Communicate, Communicate, Communicate
- Partnering is critical
- Communicate changes in demand and adjust Kanban sizes
- Communicate problems in the supply chain to mitigate risk
Calculate Your Kanban Size Now
- On Hand Inventory MUST cover the lead time required to replenish the Kanban
- Goal is to Minimize the INVENTORY trapped in the system
- Kanban Calculator