LEan management inventory206_Slides.ppt

Lean Management Basics and Tools explained in simple language

1. L E A N
E N T E R P R I S E
Pull/Kanban

2. 360vu

SM
LE206 v3.0 Pull/Kanban 2
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

3. 360vu

SM
LE206 v3.0 Pull/Kanban 3
Objectives
•Describe the difference between a Pull System and a Push
System.
•Identify opportunities to introduce Pull Systems.
•Decide how to manage demand to meet customer
requirements.
•Locate and size supermarkets in the system.
•Calculate order points and order quantities.
•Select and implement appropriate Pull signals.
•Describe ways to monitor and fine-tune a Pull System.

4. 360vu

SM
LE206 v3.0 Pull/Kanban 4
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

5. 360vu

SM
LE206 v3.0 Pull/Kanban 5
Types of Inventory
$ Invested

$ $ $
high medium low
1 2 4 53
Finished
Goods
Raw
Materials
Work-In-Process
Flexibility

6. 360vu

SM
LE206 v3.0 Pull/Kanban 6
Why Have
Inventory?
Variability
Large Inventories
High Costs
- Customers
- Suppliers
- Competitors
- Processes
- Products
{

7. 360vu

SM
LE206 v3.0 Pull/Kanban 7
Some causes of Excess Inventory
• Protects the company from inefficiencies and unexpected
problems
• Product complexity
• Unleveled scheduling
• Poor Market forecast
• Unbalanced workload
• Unreliable shipments by suppliers
• Misunderstood communications
• Reward system
Why Have
Inventory?

8. 360vu

SM
LE206 v3.0 Pull/Kanban 8
Why Have
Inventory?
Poor
Scheduling
Quality
Problems
Line
Imbalance
Long
Vendor
Deliveries
Long
Start-up
Time
Poor
Housekeeping
Communication
ProblemsMachine
Breakdowns
Long
Transportation
Absen-
teeism
Sea of Inventory

9. 360vu

SM
LE206 v3.0 Pull/Kanban 9
Inventory Impact:
Costs
 Opportunity Costs
 Carrying Costs
 Design Changes
 Obsolescence
 Operating Costs
• Handling
• Space
• People
• Paperwork
• Equipment
• Damage
Excess inventory is the
root of all evil
- K. Suzaki,
The New Manufacturing Challenge

10. 360vu

SM
LE206 v3.0 Pull/Kanban 10
Key Inventory Measure:
Inventory Turns
Inventory Turns =
Annual Cost of Goods Sold
Avg. On-Hand Inventory
Inventory Turns: Harley Davidson
0
5
10
15
20
25
1 2 3 4 5 6Year
A
n
n
u
a
l

T
u
r
n
s

11. 360vu

SM
LE206 v3.0 Pull/Kanban 11
Company Inventory Turns Turn Days
Avg. U. S. manufacturer 7 - 8 45 - 52
Harley Davidson 21 17
Black & Decker 37 10
Avg. U. S. grocery store 50 7
Toyota 80-100 3.7 - 4.7
(7-11 stores) 300+ ~1
Key Inventory Measure:
Inventory Turns

12. 360vu

SM
LE206 v3.0 Pull/Kanban 12
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

13. 360vu

SM
LE206 v3.0 Pull/Kanban 13
What is a Pull System?
An information system for:
•Controlling and improving the flow of materials and information
•Allocating resources based on actual consumption not on forecasted
demand.

14. 360vu

SM
LE206 v3.0 Pull/Kanban 14
•Production is based on anticipated need dates.
•High utilization and high efficiency drive performance.
•Infinite capacity is assumed.
•Bottlenecks are hidden and lead times expanded.
•Maintaining flow is costly.
Push System
Information Flow
Parts Flow
Customer
Process
B
Supplier
Raw
Process
A
Process
C
WIP WIP FG

15. 360vu

SM
LE206 v3.0 Pull/Kanban 15
•Production is based on actual consumption rates.
•Critical resources set the pace.
•Collapsing lead times; simplified scheduling.
•Improving flow drives performance.
Pull System
Information Flow
Parts Flow
FIFO
Supplier
Process
A
Process
C
Customer
Process
B
Finished Goods
FIFO
Raw Materials

16. 360vu

SM
LE206 v3.0 Pull/Kanban 16
Pull by Other Names
Order Point
KanbanSupermarket
Breadman
Vendor-
Managed
Min / Max
Two Bin

17. 360vu

SM
LE206 v3.0 Pull/Kanban 17
Pull System Prerequisites
•Not Required:
-A wealth of data
-Accurate forecasts
-Eliminating MRP
•Required:
-A champion with vision and
authority
-Value stream management
-User ownership and customer
focus
-A comprehensive approach
Needed: a deep commitment to Lean strategy

18. 360vu

SM
LE206 v3.0 Pull/Kanban 18
Lean Building Blocks
Quick Changeover
Standardized WorkBatch ReductionTeams
Quality at Source
5S SystemVisual Plant Layout
POUS
Cellular/FlowPull/Kanban TPM
Continuous Improvement
Value
Stream
Mapping

19. 360vu

SM
LE206 v3.0 Pull/Kanban 19
Reduced Lead Time
“One of the most noteworthy accomplishments in keeping the price of
Ford products low is the gradual shortening of the production cycle.
The longer an article is in the process of manufacture and the more
it is moved about, the greater is its ultimate cost.”
— Henry Ford, 1926

20. 360vu

SM
LE206 v3.0 Pull/Kanban 20
Defining Lean
Lean is:
“A systematic approach to identifying and eliminating waste (non-
value-added activities) through continuous improvement by flowing
the product at the pull of the customer in pursuit of perfection.”
— The MEP Lean Network

21. 360vu

SM
LE206 v3.0 Pull/Kanban 21
Lean = Eliminating Waste
Typically 95% of all lead time is non-value-added.
Value-Added
Non-Value-Added
•Defects
•Overproduction
•Waiting
•Not Utilizing Employees K,S,A
•Transportation
•Inventory
•Motion
•Excess Processing

22. 360vu

SM
LE206 v3.0 Pull/Kanban 22
The Strategic Nature of
Inventory
•The size of your inventory relates directly to the percent of your lead
time that is non-value-added!
•High inventory manufacturing destroys:
-Quality
-Delivery
-Margins
•Inventory is a measure of total manufacturing effectiveness.

23. 360vu

SM
LE206 v3.0 Pull/Kanban 23
The Strategic Impact of
Inventory
These items increase:
•Output
•Cash flow
•Return on Investment (ROI)
•Net profit
As material flow improves:
These items decrease:
•Inventory
•Total costs

24. 360vu

SM
LE206 v3.0 Pull/Kanban 24
The Goal: Making Money
•Increase throughput—the rate at which money is generated
through sales.
•Decrease inventory—the money invested by purchasing things
intended for sale.
•Decrease operating expense—the money spent to convert
inventory into throughput.

25. 360vu

SM
LE206 v3.0 Pull/Kanban 25
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

26. 360vu

SM
LE206 v3.0 Pull/Kanban 26
Getting From Push to Pull
•Document Reality
-Determine Your Current State (Value Stream Mapping).
•Visualize the Ideal State
-Conceptualize Your Future State (Value Stream Mapping).
•Create Strategy and Plan
-Calculate Buffers.
-Select the Appropriate Pull Signals (Kanban).
•Make Changes
-Train Personnel & Implement System
•Verify Changes and Check Effectiveness
-Audit the System
-Confirm the Results and Standardize

27. 360vu

SM
LE206 v3.0 Pull/Kanban 27
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

28. 360vu

SM
LE206 v3.0 Pull/Kanban 28
1. Document Reality
•Current State
•Team Make up
•Current State Map

29. 360vu

SM
LE206 v3.0 Pull/Kanban 29
Current State - Oil Filter Case
•Oil Filter Manufacturer
•Long Set-ups
•Poor Machine Reliability
•Large Raw Material Inventories
•Large WIP Inventories

•Large Finished Goods Inventories
•Complex Scheduling Systems
•Sells to Distribution Centers & Retailers
•Promises 24 hour Shipping on Most Products

30. 360vu

SM
LE206 v3.0 Pull/Kanban 30
Typical Team Make Up
•Purchasing
•Manufacturing Engineering
•Maintenance
•Assembly Operator(s)
•Fabrication Operator(s)
•Supervisor(s)
•Vendor Representative
•Scheduling
•Shipping Representative
•Continuous Improvement Coordinator
Try to get multiple shift attendance

31. 360vu

SM
LE206 v3.0 Pull/Kanban 31
Current State Map
COIL STEEL
VENDOR
BLANK DRAW ELEMENT ASS'Y
34.1 DAY S 19.3 DAY S 17.8 DAY S
C/T = .47 SEC. C/T = 2.7 SEC. C/T = 4 SEC.
C/O = 1 HR. C/O = 8 HRS. P/T = 21 MIN.
U/T = 80% U/T = 60% C/O = 20 MIN.
1 SHIFT 3 SHIFTS U/T = 85%
3 SHIFTS
34.1 DAYS 19.3 DAYS 17.8 DAYS
.47 SECONDS 2.7 SECONDS 21 MINUTES
DAILY
ORDERS
FORECAST
DAILY
I II
FAB
PLANNER
RELEASABLE
ORDER REPORT
SHOP
ORDERS
FAB
SUPERVISOR
DAILY FAB
SCHEDULE
ALL OPERATIONS
PROD. CONTROL
DISTRIBUTORS &
RETAILERS
VARIOUS PART #'S
383,000 / YR
1,596 / DAY
FILTER ASS'Y SHIPPING
5 DAY S 36.9 DAY S
C/T = 1 SEC.
P/T = 24 MIN.
C/O = 35 MIN.
U/T = 80%
2 SHIFTS
5 DAYS 36.9 DAYSL.T = 113.1 DAYS
24 MINUTES P. T. ~ 45 MIN.
MRP
DAILY
II
MPS
WEEKLY
SCHEDULE
END ITEM
PLANNER
RELEASABLE
ORDER REPORT
SHOP
ORDERS
SHIP LIST
DISTRIBUTION
WAREHOUSE
DAILY
ORDERS
FORECAST
FILTER KING, INC.
CURRENT STATE MAP
3/1/2002

32. 360vu

SM
LE206 v3.0 Pull/Kanban 32
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

33. 360vu

SM
LE206 v3.0 Pull/Kanban 33
Visual the Ideal State
•Make To Order(MTO) or Make To Stock(MTS)?
•Make To Order vs. Make To Stock Calculations.
•Finished Goods Supermarket Calculations.
•Placing Supermarkets or other buffers.
•Future State Map

34. 360vu

SM
LE206 v3.0 Pull/Kanban 34
What Kind of “Pull” Will Drive Your System?
•Build to Ship (MTO)
-Get an order, make it, & ship to customer.
-FIFO Lanes
-Continuous Flow
•Build to Supermarket (MTS)
-Where do you need to place buffers?
-Supermarkets
-Two Bins
-Etc.
•Hybrid Systems (Mix of MTO & MTS)
-Depends on Customer Demand & Mfg. Lead Time

35. 360vu

SM
LE206 v3.0 Pull/Kanban 35
Make to Order
Resource capacity
must be flexible
Shop Load Customer Demand
Customer demand is
variable

36. 360vu

SM
LE206 v3.0 Pull/Kanban 36
Make to Stock
Pull signals support
smooth flow
Customer demand is
variable
Shop Load Customer Demand
Finished goods
levels fluctuate

37. 360vu

SM
LE206 v3.0 Pull/Kanban 37
Make to Order vs. Make to Stock
Part # Annual Monthly Weekly Daily
181-03702 980,000 81,667 20,417 4,084 1 1 MTS
281-04598 167,000 13,917 3,479 696 3 1 MTO
381-04617 1,187,040 98,920 24,730 4,946 1 1 MTS
481-04777 1,690,560 140,880 35,220 7,044 1 1 MTS
581-06580 839,040 69,920 17,480 3,496 1 1 MTS
681-06627 2,204,400 183,700 45,925 9,185 1 1 MTS
781-07564 1,452,000 121,000 30,250 6,050 1 1 MTS
881-10090 2,340,000 195,000 48,750 9,750 1 1 MTS
981-12086 1,642,080 136,840 34,210 6,842 1 1 MTS
1081-12877 160,320 13,360 3,340 668 3 1 MTO
1181-14448 954,000 79,500 19,875 3,975 1 1 MTS
1281-14590 116,400 9,700 2,425 485 3 1 MTO
1381-17366 237,120 19,760 4,940 988 3 1 MTO
Total 13,969,960 1,164,163 291,041 58,209
= Cells that need information input.
= Cells that are automatically calculated.
= Cells that are labels only.
Mfg. Lead
Time
(Days)
MTO or
MTS?
Average Customer Demand
Customer
Req'd
Lead Time
(Days)
Enter Factory
Part #
Enter Annual
Volume
Enter Promised
Lead Time
Enter
Manufacturing
Lead Time
If Mfg. Lead Time is less than Customer
required lead time then make to order,
otherwise make to stock.

38. 360vu

SM
LE206 v3.0 Pull/Kanban 38
Exercise #1 – MTO or MTS?
Filter King, Inc. produces items for a wide range of customers.
Current customer lead times, manufacturing lead times and historical
demand information can be found in the table below.
Should you make each product to order or stock?
Part # Annual Monthly Weekly Daily
175-2457 717,520 59,793 14,948 2,990 1 2
267-9087 161,100 13,425 3,356 671 3 1
334-1287 1,200,100 100,008 25,002 5,000 1 1.5
487-0980 1,451,000 120,917 30,229 6,046 1 1
523-6578 122,500 10,208 2,552 510 5 1
Total 3,652,220 304,352 76,088 15,218
Mfg. Lead
Time
(Days)
MTO or
MTS?
Average Customer Demand
Customer
Req'd
Lead Time
(Days)

39. 360vu

SM
LE206 v3.0 Pull/Kanban 39
Where Do You Need Component
Supermarkets?
At critical points in the flow:
•Where supply time is greater than customer lead time
•Where spike demands cause lead times to extend
•Before divergence points, assembly points, shared resources, and
bottlenecks
•After unpredictable operations
•Before and after long setups.

40. 360vu

SM
LE206 v3.0 Pull/Kanban 40
Determine Buffer
Locations
•Does your lead time to produce exceed the customer’s
required lead time?
•Where is the constraint (bottleneck) operation?
•Where is the point of differentiation?
•Where is an assembly operation?

41. 360vu

SM
LE206 v3.0 Pull/Kanban 41
Customer vs. Supplier Lead
Times
Customer Lead Times (Weeks)
Supply Chain Lead Times (Weeks)
Purchase Raw
Material
Fabricate
Components
Sub-
Assembly
Final
Assy
13 7 13
<1 wk
Finished Goods
Inventory
<13 wks
<3 wks
Subassembly
Inventory
<7 wks
Fabricated Components
Inventory
Raw Materials Inventory
Make to Order

42. 360vu

SM
LE206 v3.0 Pull/Kanban 42
Determine Buffer Locations
Where is the constraint (bottleneck) operation?
Constraint
Operation
1 2 4 53
•The constraint operation determines overall capacity of production
line
•A buffer at the constraint is designed to make sure the bottleneck is
never idle, and maximum potential capacity is maintained

43. 360vu

SM
LE206 v3.0 Pull/Kanban 43
Determine Buffer
Locations
Where is the constraint (bottleneck) operation?
•Three critical questions related to the constraint operation:
- Where is the constraint?
- Why is it the constraint?
- What must be done so that it is no longer the constraint?
•In order to increase capacity of the overall manufacturing
process, the constraint operation must be attacked to remove
all waste (e.g., scrap, setup time, downtime)

44. 360vu

SM
LE206 v3.0 Pull/Kanban 44
Operation that
makes product unique
•Products are designed so that features are the same from beginning to some
point of differentiation (the closer to FG, the better); At that point, implement a
larger strategic buffer than at previous workstations.
Where is the point of differentiation?
Determine Buffer Locations
1 2 4
5A
3
5B
5C

45. 360vu

SM
LE206 v3.0 Pull/Kanban 45
1 2 4 63
Assembly Operation
5 7
•Major assembly points make good strategic buffer locations
•Component parts are typically flexible, while assembly operation often makes
item unique
A
C
B
Where is an assembly point?
Determine Buffer Locations
1 2 3
1 2 3
4

46. 360vu

SM
LE206 v3.0 Pull/Kanban 46
Future State 1
FAXBAN
BLANK DRAW
C/T = .47 SEC. C/T = 2.7 SEC.
C/O = 10 MIN. C/O = 20 MIN.
U/T = 95% U/T = 95%
1 SHIFT 1 SHIFT
2 DAYS 5 DAYS
0.47 SECONDS 2.7 SECONDS
COIL STEEL
VENDOR
FORECAST
PULL
SYSTEM
DESIGN
DAILY
TPM ON
PRESSES
SMED ON
ASS'Y
SMED ON
PRESSES
FILTER ASS'Y CELL SHIPPING
T.T. = 34.6 SEC.
C/T = 1 SEC.
P/T = 45 MIN.
C/O = 10 MIN.
U/T = 95%
2 SHIFT
5 DAYS 5 DAYS L.T = 17 DAYS
45 MINUTES P.T. ~ 45 MIN.
DISTRIBUTORS &
RETAILERS
SHIP LIST
FORECAST
DAILY
ORDERS
PROD. CONTROL
AS
NEEDED
SMED ON
ASS'Y
FILTER KING, INC.
FUTURE STATE MAP
VERSION 1
3/2/2002
TPM AT
ASS'Y5 S AT ALL
AREAS
LINK FILTER
ASS'Y &
ELEM. LINE

47. 360vu

SM
LE206 v3.0 Pull/Kanban 47
Future State 2
FAXBAN
BLANK DRAW
C/T = .47 SEC. C/T = 2.7 SEC.
C/O = 10 MIN. C/O = 20 MIN.
U/T = 95% U/T = 95%
1 SHIFT 1 SHIFT
1.5 DAYS 0.5 DAYS
0.47 SECONDS 2.7 SECONDS
FIFO
COIL STEEL
VENDOR
FORECAST
DAILY
LINK BLANK
& DRAW
PRESSES
FILTER ASS'Y CELL SHIPPING
T. T. = 34.6 SEC.
C/T = 1 SEC.
P/T = 45 MIN.
C/O = 10 MIN.
U/T = 95%
2 SHIFT
1.5 DAYS 2.5 DAYS L.T = 6 DAYS
45 MINUTES P. T. ~ 45 MIN.
DISTRIBUTORS &
RETAILERS
SHIP LIST
FORECAST
DAILY
ORDERS
PROD. CONTROL
AS
NEEDED
FILTER KING, INC.
FUTURE STATE MAP
VERSION 2
3/2/2002
CONT. TO
REDUCE
INVENTORY
Takt = 35 sec.

48. 360vu

SM
LE206 v3.0 Pull/Kanban 48
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

49. 360vu

SM
LE206 v3.0 Pull/Kanban 49
Calculate Buffers
•Customer Information
•Vendor Information
•Manufacturing Information
•Impact of Demand Variation
•Pull Rate
•Every Part Every Interval (EPEI)
•Order Point
•Order Quantity
•Containerization
•Future Inventory Analysis

50. 360vu

SM
LE206 v3.0 Pull/Kanban 50
Customer Information
•Required Customer Information
-Historic Demand (Look at Variation)
-Forecasted Demand (Look at Variation)
-Required Lead Time
-Special Packaging Requirements
-Delivery requirements
-Others?
•Use Pareto Analysis to Increase Focus
-Helps Identify the Greatest Opportunity

51. 360vu

SM
LE206 v3.0 Pull/Kanban 51
Vendor Information
•Required Vendor Information
-Delivery Schedule
-Capacity
-Promised Lead Time
-Containerization
-Reliability
-Others?

52. 360vu

SM
LE206 v3.0 Pull/Kanban 52
Manufacturing Information
•Required Manufacturing Information
–Cycle Times
–Changeover Times
–Machine Reliability
–Required Lead Time
–Container Sizes / Quantities
–Others?

53. 360vu

SM
LE206 v3.0 Pull/Kanban 53
Impact of Demand Variation
0
500
1000
1500
2000
2500
3000
3500
4000
4500
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN
= Reset Supermarkets= Use Safety Stock

54. 360vu

SM
LE206 v3.0 Pull/Kanban 54
Adjusting Demand
Start with your average
demand
• Adjust for:
- front-end or back-
- end loading
- low-volume, high
- mix variations
then
Pull rates are used to size finished goods and component
supermarkets, NOT to drive production!

55. 360vu

SM
LE206 v3.0 Pull/Kanban 55
Adjusting Demand (Cont’d)
Part # 1 2 3 4 5 6 7 8 9 10 11 12
181-037023,875 4,150 3,975 4,250 3,985 4,150 4,000 4,150 3,950 4,300 3,975 4,250 4,084 4,250
281-04598 - 1,450 675 1,200 - 1,025 800 645 705 972 - 875 696 MTO
381-046175,000 5,300 5,200 5,150 4,750 4,500 4,850 5,000 5,250 5,000 4,850 4,500 4,946 5,200
481-047777,000 7,200 6,900 6,950 7,125 7,200 7,150 6,950 6,950 7,200 7,000 6,900 7,044 7,200
581-065803,500 3,450 3,600 3,575 3,250 3,600 3,450 3,400 3,475 3,400 3,800 3,450 3,496 3,600
681-066279,200 9,100 9,275 9,175 9,200 9,200 9,150 9,275 9,125 9,150 9,200 9,175 9,185 9,200
781-075646,000 6,150 5,975 6,000 6,050 6,125 6,200 6,000 6,000 6,125 5,975 6,000 6,050 6,150
881-100909,700 9,800 9,750 9,775 9,800 9,850 9,700 9,850 9,600 9,675 9,700 9,800 9,750 9,800
981-120866,875 7,000 6,900 6,950 6,800 6,875 6,800 6,850 6,900 6,700 6,750 6,700 6,842 6,900
1081-128771,000 - 976 1,200 50 765 975 - 675 1,100 75 1,200 668 MTO
1181-144484,000 3,875 3,800 3,900 4,150 4,175 4,100 3,900 3,850 3,975 4,000 3,975 3,975 4,100
1281-14590 975 950 1,000 75 50 - - - 450 675 775 875 485 MTO
1381-173661,200 1,150 1,000 1,150 975 1,000 850 975 1,000 900 875 775 988 MTO
= Cells that need information input.
= Cells that are automatically calculated.
= Cells that are labels only.
Adjusted
Demand
Average Daily Demand by Month
Ave.
Daily
Demand
Adjusted Demand is established by making your best estimate of the rate of
customer demand in a particular period. Adjusted Demand should cover the
majority of occurrences of demand over that period.

56. 360vu

SM
LE206 v3.0 Pull/Kanban 56
Exercise #2 – What should
the Adjusted Demand Rate
Looking at the average daily demand, what should the
adjusted demand-rate be?
Part # 1 2 3 4 5 6 7 8 9 10 11 12
175-2457 3,000 3,150 2,976 3,000 2,875 3,125 2,775 2,925 3,000 3,100 2,950 3,000 2,990
267-9087 - 1,245 675 1,045 - 980 825 652 789 972 - 872 671 MTO
334-1287 4,900 5,200 5,125 5,150 4,750 4,975 4,850 5,000 5,250 5,125 4,900 4,780 5,000
487-0980 6,000 6,200 5,900 5,950 6,125 6,200 6,150 5,975 5,950 6,200 6,000 5,900 6,046
523-6578 1,200 800 - 450 700 50 75 1,100 - - 750 1,000 510 MTO
Adjusted
Demand
Average Daily Demand by Month
Ave.
Daily
Demand

57. 360vu

SM
LE206 v3.0 Pull/Kanban 57
EPEI or EPE Interval
•Refers to the “every-product-every interval”—a measure of production
batch size
If a machine is able to change over and produce the required
quantity of all the part types dedicated to it within three days,
then the production batch size for each individual part type is
about three day's worth of parts. The machine is making
every part every (EPE) three days.
Example

58. 360vu

SM
LE206 v3.0 Pull/Kanban 58
Calculating EPE Intervals
•Calculate EPEI by gathering the following information:
-Time available for production per day.
-Capacity of the producing resource.
-The Set-up Times and Cycle Times for the parts produced on
the resource.
-Volume of demand for the parts over an appropriate time
period.

59. 360vu

SM
LE206 v3.0 Pull/Kanban 59
Time Available for Production
480
20
0
2
96%
92%
813
480
20
0
2
96%
92%
813
420
20
0
1
96%
92%
353
24 Hour Day 1978
Work Days 5
Historic Quality Yield
Historic Equipment Reliability (uptime)
Available Time Analysis
Shift Time (minutes)
Adjusted Available Time to Produce Good Parts
Breaks (minutes)
Historic Quality Yield
Historic Quality Yield
Other time not available for production (minutes)
Number of Machines Utilized
Shift Time (minutes)
Breaks (minutes)
Shift Time (minutes)
Other time not available for production (minutes)
Breaks (minutes)
Historic Equipment Reliability (uptime)
Other time not available for production (minutes)
Historic Equipment Reliability (uptime)
Number of Machines Utilized
Number of Machines Utilized
Number of Work Days per Week
First Shift
Second Shift
Third Shift
Time Available for Production (minutes)
Time Available for Production (minutes)
Time Available for Production (minutes)
Note: Time Available must
be filled in FIRST in order
to drive other calculations
in spreadsheet!

60. 360vu

SM
LE206 v3.0 Pull/Kanban 60
EPE Calculation Spreadsheet
Part #
181-03702 60 0.70 48 780mins/cycle
281-04598 60 0.70 9 746mins/day
381-04617 60 0.70 58 13 per cycle
481-04777 60 0.70 83 1978mins/day
581-06580 60 0.70 41 1232mins/day
681-06627 60 0.75 115 0.6day
781-07564 60 0.70 71 1.58Cycles
881-10090 60 0.75 122
981-12086 60 1.00 115
1081-12877 60 0.70 8
1181-14448 60 0.75 50
1281-14590 60 1.00 9
1381-17366 60 1.00 17
Totals 780 N/A 746
= Cells that need information input.
= Cells that are automatically calculated.
= Cells that are labels only.
Total Planned Available Time
Time Available for Set-ups
Every Part Every =
Cycles per Day Possible =
Changeover Analysis / EPE Calculation
Total Set-up Time
Total Daily Required Run Time
Number of Set-ups Required
Production Requirements
Set-Up Time
(Minutes)
Cycle Time
(Seconds)
Daily Req.
Run Time
(Minutes)
Enter typical Set-up times
Enter cycle times
Run Time = Daily Volume X Cycle Time
# of Set-ups = The # of
Part Numbers.
EPE = Total Set-up Time / Time
Available for Set-ups.

61. 360vu

SM
LE206 v3.0 Pull/Kanban 61
Exercise #3 – Time Available
Analysis
• Filter King, Inc. is a three shift operation, but due to the current
demand, only runs two shifts to manufacture these part numbers.
• The shifts run from 6:30 a.m. to 3:00 p.m. and 3:00 p.m. to 11:30
p.m.
• There is a thirty minute lunch break, as well as two ten minute breaks
per shift.
• There is also a 10 minute clean-up period at the end of every shift.
• Current operations run Monday through Friday.
•They utilize one machine for this product line.
• The typical quality yield is 93% and the historic equipment reliability
is 90%.
• Fill out the form on the next page with the above information.

62. 360vu

SM
LE206 v3.0 Pull/Kanban 62
Exercise #3 – Time Available
Analysis (Cont’d)
D1
E1
F1
G1
A2
B2
C2
D2
E2
F2
G2
A3
B3
C3
D3
E3
F3
G3
24 Hour Day H
Work Days I
= Cells that need information input.
= Cells that are automatically calculated.
= Cells that are labels only.
G1 = (((A1 - B1 - C1) X D1) X E1) X F1
G2 = (((A2 - B2 - C2) X D2) X E2) X F2
G3 = (((A3 - B3 - C3) X D3) X E3) X F3
I = # of days worked per week.
Number of Machines Utilized
Historic Quality Yield
Historic Quality Yield
Shift Time (minutes)
Breaks (minutes)
Shift Time (minutes)
First Shift
Second Shift
Third Shift
Time Available for Production (minutes)
Time Available for Production (minutes)
Time Available for Production (minutes)
Historic Equipment Reliability
Number of Machines Utilized
H = G1 + G2 + G3
Historic Equipment Reliability
Number of Work Days per Week
Adjusted Available Time to Produce Good Parts
Historic Quality Yield
Other time not available for production (minutes)
Number of Machines Utilized
Other time not available for production (minutes)
Breaks (minutes)
Historic Equipment Reliability

63. 360vu

SM
LE206 v3.0 Pull/Kanban 63
Exercise #4 – Production
Requirements / EPEI
All products must be processed through the same machine. The cycle time and set-up times per
product are in the table below.
Fill in the table with all required data and calculations.
•Daily Req. Run Time = {Avg. Daily Demand X Cycle Time}(from Exercise # 2) / 60 Seconds
•Available for Set-up = Total Planned Available Time – Total Daily Required Run Time (from Exercise #3)
•Total Planned Available Time = Adjusted Available Time to Produce Good Parts
•EPE = Total Set-up Time / Available Time for Set-up
•Cycles per Day Possible = 1 / EPE
Part # mins/cycle
175-2457 60 0.70 mins/day
267-9087 45 0.70 per cycle
334-1287 90 0.70 mins/day
487-0980 60 0.70 mins/day
523-6578 30 0.70 day
Totals 285 N/A cycles
Total Planned Available Time
Available Time for Set-up
Every Part Every =
Cycles per Day Possible =
Changeover Analysis / EPE Calculation
Total Set-up Time
Total Daily Required Run Time
Number of Set-ups Required
Production Requirements
Set-Up Time
(Minutes)
Cycle Time
(Seconds)
Daily Req.
Run Time
(Minutes)
35
8
59
71
179
6
285
179
5
753
574
.5
2.0

64. 360vu

SM
LE206 v3.0 Pull/Kanban 64
Order Point and Order
Quantity
•The order point is the point at which you request
replenishment for your supermarket.
•The order quantity is the amount that you order to replenish a
supermarket.

65. 360vu

SM
LE206 v3.0 Pull/Kanban 65
Order Point Considerations
•Demand during replenishment lead time from prior supermarket
(or outside vendor) plus:
-Safety lead time for unpredictable events, such as tool
problems, maintenance
-Additional lead time to cover fixed EPE intervals
-Inventory to cover parent batch sizing
-Non-inventoried component lead times
•Safety stock to cover demand variability within lead time

66. 360vu

SM
LE206 v3.0 Pull/Kanban 66
Formula for Preliminary
Order Point
Adjusted Daily
Demand X =
Replenishment
Lead Time
Preliminary
Order Point

67. 360vu

SM
LE206 v3.0 Pull/Kanban 67
Order Quantity
Considerations
•Purchased Item Considerations
-Identify Limitations
-Shipping Frequency (Daily, Weekly, etc.)
-Minimum Purchase Quantities (Container size)
-Others?
•Manufactured Item Consideration
-Identify Limitations
-Mixed Model Capacity Constraints
-Batch Oriented Processes
-Others?
•If this makes you nervous, create a rule to increase the fixed Order
Quantity.
-This means you accept additional inventory costs!

68. 360vu

SM
LE206 v3.0 Pull/Kanban 68
Formula for Preliminary Order Quantity
Daily Requirement× =
Frequency of
Supply
Preliminary Order
Quantity
For purchased part or raw materials:
Adjusted Daily
Demand
× =EPE Interval
Preliminary Order
Quantity
For manufactured items:

69. 360vu

SM
LE206 v3.0 Pull/Kanban 69
Order Point / Order Quantity Spreadsheet
Part #
181-03702 1.0 4,250 0.6 2,690 1.6 6,940
281-04598 1.0 - 0.6 - 0.0 -
381-04617 1.0 5,200 0.6 3,291 1.6 8,491
481-04777 1.0 7,200 0.6 4,557 1.6 11,757
581-06580 1.0 3,600 0.6 2,279 1.6 5,879
681-06627 1.0 9,200 0.6 5,823 1.6 15,023
781-07564 1.0 6,150 0.6 3,893 1.6 10,043
881-10090 1.0 9,800 0.6 6,203 1.6 16,003
981-12086 1.0 6,900 0.6 4,367 1.6 11,267
1081-12877 1.0 - 0.6 - 0.0 -
1181-14448 1.0 4,100 0.6 2,595 1.6 6,695
1281-14590 1.0 - 0.6 - 0.0 -
1381-17366 1.0 - 0.6 - 0.0 -
= Cells that need information input.
= Cells that are automatically calculated.
= Cells that are labels only.
Order
Quantity
(Pieces)
Initial Total
Supermarket
(Days)
Initial Total
Supermarket
(Pieces)
Replenishment
Lead Time
(Order Point)
(Days)
Order Point
(Pieces)
EPE
(Order Qty)
(Days)
Enter time it takes to
respond to production
signal.
Order Point = Adjusted Demand X Replenishment
Lead Time
Order Quantity = Adjusted Demand X
EPE
Initial Total Supermarket (Days) = Replenishment Lead Time +
EPE
Initial Total Supermarket (Pcs.) =
Order Point + Order Quantity

70. 360vu

SM
LE206 v3.0 Pull/Kanban 70
Part #
175-2457
267-9087 MTO MTO MTO MTO MTO MTO
334-1287
487-0980
523-6578 MTO MTO MTO MTO MTO MTO
Order
Quantity
(Pieces)
Initial Total
Supermarket
(Days)
Initial Total
Supermarket
(Pieces)
Replenishment
Lead Time
(Order Point)
(Days)
Order Point
(Pieces)
EPE
(Order Qty)
(Days)
Exercise #5 – Order Point &
Order Quantity
The manufacturing process can typically respond within a few hours of getting a
customer order. Use this information, as well as the data you have gathered thus
far, to complete the table below.
•Order Point (Pcs) = Adjusted Daily Demand X Replenishment Lead Time (from Exercise #2)
•EPE can be found from Exercise #4
•EPE is also known as the Order Quantity (Days)
•Order Quantity (Pieces) = Adjusted Daily Demand (from Exercise #2) X EPE
•Initial Total Supermarket (Days) = Order Point (Days) + Order Quantity (Days)
•Initial Total Supermarket (Pieces) = Order Point (Pieces) + Order Quantity (Pieces)

71. 360vu

SM
LE206 v3.0 Pull/Kanban 71
Containerization Considerations
•Establish Container Standardization, if one does not
already exist
-Weight
-Number of Containers Needed
-Time Equivalence
-Others?
•Adjust Buffers Based on Container Size
•Simplify the System with use of Standard Container
Quantities for Each Item

72. 360vu

SM
LE206 v3.0 Pull/Kanban 72
Adjust Your Calculations for
Containers
Part #
181-03702 2,250 2 2 4
281-04598 2,100 0 0 0
381-04617 6,700 1 1 2
481-04777 6,700 2 1 3
581-06580 9,300 1 1 2
681-06627 2,250 5 3 8
781-07564 6,700 1 1 2
881-10090 2,250 5 3 8
981-12086 1,800 4 3 7
1081-12877 2,250 0 0 0
1181-14448 2,250 2 2 4
1281-14590 2,250 0 0 0
1381-17366 1,800 0 0 0
Totals 23 17 40
= Cells that need information input.
= Cells that are automatically calculated.
= Cells that are labels only.
Container
Quantity
Final Order
Point
(Containers)
Final Order
Quantity
(Containers)
Total Containers
in Supermarket
Enter the Container Capacity of
each product.
Final Order Point = Order Point / Container
Capacity
Zeros represent
Make to Order
Part #'s.
Total Cont. in supermarket =
Final Order Pt. + Final Order
Qty.
Final Order Quantity = Order Quantity / Container
Capacity

73. 360vu

SM
LE206 v3.0 Pull/Kanban 73
Exercise #6 –
Containerization
The table below has the container quantity listed, determine how many
containers you require.
Part #
175-2457 1,500
267-9087 500
334-1287 1,500
487-0980 1,500
523-6578 750
Totals
Container
Quantity
Final Order
Point
(Containers)
Final Order
Quantity
(Containers)
Total
Containers in
Supermarket
•Order Point (Pieces) and Order Quantity (Pieces) (from Exercise #5)
•Final Order Point = Order Point (Pieces) / Container Quantity
•Final Order Quantity = Order Quantity (Pieces) / Container Quantity
•You typically want to round up the Final Order Point and Final Order Quantity
•Total Containers in Supermarket = Final Order Point + Final Order Quantity

74. 360vu

SM
LE206 v3.0 Pull/Kanban 74
Analyze Your Future Inventory
Levels
Part #
181-03702 0 9,000 4,500 21,499 16,999
281-04598 0 - - 9,000 9,000
381-04617 0 13,400 6,700 22,735 16,035
481-04777 0 20,100 10,050 42,654 32,604
581-06580 0 18,600 9,300 27,645 18,345
681-06627 0 18,000 9,000 24,565 15,565
781-07564 0 13,400 6,700 24,750 18,050
881-10090 0 18,000 9,000 26,363 17,363
981-12086 0 12,600 6,300 5,361 (939)
1081-12877 0 - - 7,425 7,425
1181-14448 0 9,000 4,500 16,786 12,286
1281-14590 0 - - 4,400 4,400
1381-17366 0 - - 5,290 5,290
Totals 0 132,100 66,050 238,473 172,423
= Cells that need information input.
= Cells that are automatically calculated.
= Cells that are labels only.
Inventory
Reduction
Inventory Analysis
Maximum
Supermarket
Quantity
Minimum
Supermarket
Quantity
Average
Supermarket
Inventory
Current
Inventory
Max. Supermarket Qty. =
Cont. Qty. X # of
Containers
Avg. Supermarket Qty. =
Max. Supermarket Qty. / 2
Enter Current
Observed Inventory
Inventory Reduction = Current Inv. -
Avg. Supermarket. Inv.

75. 360vu

SM
LE206 v3.0 Pull/Kanban 75
Exercise #7 – Analyze Final
Inventory
The table below has the current inventory levels listed. Fill out the rest of the
table to determine if the Pull System increases or decreases your inventory
levels.
•Supermarket and Container information (from Exercise #6)
•Maximum Supermarket Inventory = Total Containers in Supermarket X Container Quantity
•Average Supermarket Inventory = Maximum Supermarket Inventory / 2
•Inventory Reduction = Current Inventory – Average Supermarket Inventory
Part #
175-2457 0 16,498
267-9087 0 7,500
334-1287 0 12,500
487-0980 0 2,000
523-6578 0 12,500
Totals 0 50,998
Inventory
Reduction
Inventory Analysis
Maximum
Supermarket
Inventory
Minimum
Supermarket
Inventory
Average
Supermarket
Inventory
Current
Inventory
MTO MTO
MTO MTO

76. 360vu

SM
LE206 v3.0 Pull/Kanban 76
FIFO Lanes
• Why use FIFO Lanes?
-Simple
-Batch Oriented Process (Ovens, Mixers, Paint Booths,
etc.)
-Non-repetitive environments (Job Shops)
•Considerations:
-Process Times
-Downtime
-Batch Size
-Flexibility of Operators and Processes
-Changeover Times
-Trial and Error

77. 360vu

SM
LE206 v3.0 Pull/Kanban 77
FIFO Lanes (Cont’d)
Which is correct?
Depends on your situation!
PROCESS 1 PROCESS 2
Max. = 2 Containers
PROCESS 1 PROCESS 2
Max. = 4 hours
PROCESS 1 PROCESS 2
Max. = 4 Jobs
FIFO
FIFO
FIFO

78. 360vu

SM
LE206 v3.0 Pull/Kanban 78
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

79. 360vu

SM
LE206 v3.0 Pull/Kanban 79
Selecting Appropriate Pull
Signals
Few parts
Small batches
Infrequent changes
Empty Space
Many parts
Large batches
Frequent changes
Nearby
Far Away
Empty Containers
Kanban Cards
Trigger Boards
Electronic
Virtual Kanban
C
o
m
p
l
e
x
i
t
y
P
r
o
x
i
m
i
t
y

80. 360vu

SM
LE206 v3.0 Pull/Kanban 80
Two-Bin System

81. 360vu

SM
LE206 v3.0 Pull/Kanban 81
Two-Bin Bar Stock System
Empty rack signals
more bar stock

82. 360vu

SM
LE206 v3.0 Pull/Kanban 82
Kanban Squares
Parts are produced
on this side
Parts are used
on this side
Empty shelf triggers
another assembly

83. 360vu

SM
LE206 v3.0 Pull/Kanban 83
Molding Compound Barrels
Two empty spots
trigger reorder

84. 360vu

SM
LE206 v3.0 Pull/Kanban 84
Parts are consumed
across the aisle
Parts are produced
behind the racks
Switch Subassemblies

85. 360vu

SM
LE206 v3.0 Pull/Kanban 85
Purchased Forgings

86. 360vu

SM
LE206 v3.0 Pull/Kanban 86
Sample Kanbans

87. 360vu

SM
LE206 v3.0 Pull/Kanban 87
Trigger Board
Part Family
Order Point
Order Quantity

88. 360vu

SM
LE206 v3.0 Pull/Kanban 88
Overdoing It
Wrong!Wrong!

89. 360vu

SM
LE206 v3.0 Pull/Kanban 89
Exercise #8 – Discuss
Potential Pull Signals
The exercises throughout this
session could lead you to several
types of Pull Signals.
One potential solution is a trigger
board. An example is shown to
the left.
75-245734-128787-0980
8
7
6 6
5 5 5
4 4 4
3 3 3
2 2 2
1 1 1
5 6 8
4 5 7
3 4 6
2 3 5
1 2 4
1 3
2
1
= Maximum Level. Do not have more canisters than shown
= Order Point. Must run part number that reaches top of yellow.
= Priority must be given to any Part # in the red.
Supermarket Status
Part #
Order Point
Order Quantity


90. 360vu

SM
LE206 v3.0 Pull/Kanban 90
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

91. 360vu

SM
LE206 v3.0 Pull/Kanban 91
Train Personnel & Implement
System
•Train Personnel
•System Startup
•System Interfaces
•Executing a Pull System

92. 360vu

SM
LE206 v3.0 Pull/Kanban 92
Train Personnel
•Train Personnel
-Cross Functional approach is best
-Value Added Employees
-Material Handlers
-Supervisors
-Management
-Purchasing
•Review rules
•Explain logic for creating system

93. 360vu

SM
LE206 v3.0 Pull/Kanban 93
System Start-Up
•Select a Pilot Program (Safest)
•Design Pull signals.
•Fabricate cards, boards, containers, etc.
•Erect trigger boards (if applicable).
•Set up point-of-use storage.
•Place Kanbans with inventory (if applicable).
•If inventory is greater than Kanbans, use excess inventory first.
•If inventory is less than Kanbans, send Kanbans to supplier.
•Log startup inventory for later audit.

94. 360vu

SM
LE206 v3.0 Pull/Kanban 94
Implementation Planning
Activity 12345678910111213141516171819202122232425
Value Stream Mapping
VSM Training
Current State Creation
Future State Creation
Pull System Kaizen
Pull System Training
Calculate Buffers
Select Appropriate Pull Signals
Create Signal Mechanism
Develop Performance Measures
Train Personnel & Implement System
Review Rules
Explain Logic for Creating New System
Implement System
Trial Run Pull System
Preliminary Audit
Review Supermarket Size
Review Current Inventory
Review Employee Comfort Level / Understanding
Make Adjustments (If Necessary)
Pull System Fully Utilized by Production
Full Audit
Physically Monitor System
Interview Employees
Make Adjustments (If Necessary)
Determine Next Audit Date
Pull System Gantt Chart
Days

95. 360vu

SM
LE206 v3.0 Pull/Kanban 95
System Interfaces
Visual Replenishment
Automated Planning
Fab Fab Fab
Inventory
Plan
Capacity
Plan
Planned
Orders
Forecast/
Backlog
MPS
MRP
Material
Forecast
Outside
Suppliers
Customer
Orders

96. 360vu

SM
LE206 v3.0 Pull/Kanban 96
Executing a Pull System
10
10
10
10
10
Supermarket
Demand: 10/day
Lead Time: 3 days
Replenishment: 2 days
Order Point: 30 pieces/3 containers
Order Quantity: 20 pieces/2 containers
1
10
10
10
10
2
10
10
10
3
10
10
4
10
5Day 8
10
10
6
10
10
Empty Containers
Supplier
7
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10 10 10
10
10
10
10
10

97. 360vu

SM
LE206 v3.0 Pull/Kanban 97
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

98. 360vu

SM
LE206 v3.0 Pull/Kanban 98
Pull System Follow-Up Audit
•Develop performance measures to monitor the system
- Determine if system is working
- Determine if customer criteria have changed
- Determine when system should be modified
•Physically monitor system
- Get on the shop floor
- Ask employees how the system is working
- Look at inventory levels on shop floor
- Do they fit within Pull System guidelines?

99. 360vu

SM
LE206 v3.0 Pull/Kanban 99
Performance Measurement
• Avoid using:
-Efficiencies: amortized setups
-Earned hours: unless hours of
output
-MRP date-based measures
• Measure:
-Throughput (on-time delivery,
actual output instead of
required output)
-Inventory (cycle time, weeks
of inventory)
-Operating Expense (output
per person)

100. 360vu

SM
LE206 v3.0 Pull/Kanban 100
Agenda
Welcome and Introductions
Inventory Basics and Measures
Pull and Lean Manufacturing
How to get from Push to Pull
Document Reality
Determine Your Current State (Value Stream Map)
Visualize the Ideal State
Conceptualize Your Future State (Value Stream Map)
Create Plan/Strategy
Calculate Buffers
Select the Appropriate Pull Signals (Kanban)
Make Changes
Train Personnel & Implement System
Verify Changes / Check Effectiveness
Confirm Results / Standardize
Keys to Success

101. 360vu

SM
LE206 v3.0 Pull/Kanban 101
Keys to Success
•Vision and authority
•Value stream management
•Cross-functional involvement
•Structured implementation planning
•Interfaces with other systems
•Ease of maintenance
•Flow-oriented performance measures