![]() ![]() The stronger the information systems become the more stable and effective the kanban can be. The link between strong communication among customers and suppliers and reduction of inventory is often not made. Often it seems that a lack of good information is simply accepted as a given. Information: There are 2 components to this: information about your demand (how well you can forecast) and information about your supply chain (how well they can deliver).But simply lowering inventory levels when information and capacity are lacking can be disastrous. Inventory: The expectation (if not the stated goal) of using kanban is to keep inventory low, thereby increasing working capital turnover.In reality none of those conditions is both possible and desirable, so you use the other two to compensate. You can ensure that you always meet your customers’ demand for widgets by (1) keeping a lot of finished goods inventory on hand, (2) always knowing exactly which and how many widgets your customers will order well in advance, or (3) having the capacity to immediately respond to new and/or modified widget orders. Let’s say, for example, that you’re producing widgets. The basic theory is that a deficiency in any one element can be compensated for by increasing one or both of the other two. The triangle shows the interaction, and specifically the substitutability, of 3 key elements of any operation: inventory, information, and capacity. Instead, let’s examine its application to kanban. I will not attempt to explain its history and development in detail. One useful tool that the science of Operations Management (OM) gives us is the OM Triangle. The key lies in understanding how all of the various factors affect the system and in coming up with ways to mitigate them. It is possible to reap the benefits that a material pull system has to offer, even in such environments. The truth is that in a complex and variable operation setting up and managing inventory kanban is tricky. Depending on the nature of your operation you may be dealing with highly variable demand for your product, unpredictable supplier delivery performance, variable lead times, high part number counts, material shelf life, or any of a variety of other complicating factors. This is especially true if you are converting from a traditional MRP-driven system to the more consumption-based kanban. It can be a daunting challenge to set up and manage a kanban system in any manufacturing environment. He explains the transition from a traditiona MRP environment to a more consumption-based Kanban system and the challenges found therein.Įnjoy this article and learn more about Evan after the jump. We are pleased to bring you this article by Evan Durant on Kanban and its application in a real-world environment within the constraints of Inventory, Capacity, and Information – the triumvirate he calls the Operations Management Triangle. ![]()
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