GSInnovate Extended MRP Application Suite :: Electronic Kanban (eKanban)
Automatic Materials and Inventory Replenishing for a Demand-Driven Environment
Kanban, a technique for work and inventory release, is a major component of Just-in-Time (JIT) and Lean Manufacturing philosophy. Kanban was originally developed at Toyota in the 1950's as a way to manage material flow on the assembly line. Over the last three decades, the Kanban process—a highly efficient and effective factory production system—has become a widely used tool in the manufacturing environment and global competition.
The Kanban Process
Kanban stands for Kan- card, Ban- signal. The essence of the Kanban concept is that a supplier, the warehouse or the manufacturer should deliver components only when they are needed so that there is no excess inventory. Within this system, workstations located along production lines only produce or deliver desired components when they receive a card and an empty container, which indicates that more parts are needed in production.
In case of line interruptions, measures are taken so that each workstation will only produce enough components to fill the container and then stop. Kanban also limits the amount of inventory in the process by acting as an authorization to produce more inventory. Since Kanban is a chain process in which orders flow from one process to another, the production or delivery of components is pulled through the production line, in contrast to the traditional forecast-oriented method where parts are pushed.
In JIT systems, when components and parts are needed for final assembly, they are pulled in small batches from the supplying work centers. One of the most popular methods used for implementing JIT is through the use of Kanbans.
Advantages of Kanban Processing
- Provides quick and precise information
- Provides quick response to changes
- Avoids overproduction
- Minimizes waste
- Maintains full control
- Delegates responsibility to line workers
GSInnovate's Kanban
Today, the Kanban process has been further automated utilizing computers. GSInnovate's Electronic Kanban can be executed as an integral part of the supply chain. It provides the ability to monitor inventory levels and establishes triggers to automatically replenish inventory when a predefined minimum for each item is reached. Further, it provides important inventory control benefits, including:
- Full automation, which reduces work and increases accuracy
- Minimal amount of inventory at any given time
- Auto-replenishment to suppliers, reducing planning and purchase order cycle
- Customer consumption driven processes
- Excellent customer service with minimal effort
- Ability to work with multiple companies across multiple continents
eKanban Processing in GSInnovate
With GSInnovate's Electronic Kanban the triggering of the Kanban pull is done automatically to enable you to focus on the material movement while the system manages the data movement. GSInnovate does this by establishing triggers that are executed when a pre-defined minimum is reached. It knows to create a Kanban pull for the predefined quantity of material from the stores location to the predefined location on the factory floor.
Similar to purchased item data, detail data is maintained in the item/customer cross-reference. To further support customer's Lean cost saving efforts, inventory can be consigned at your customer site until use.
GSInnovate's Electronic Kanban establishes the same auto-triggers for additional material from suppliers. Just as with Electronic Kanban within the four walls, GSInnovate manages the data manipulation by triggering the proper initiator (i.e. Purchase Order or Blanket Release) to the supplier. The data required for this execution, including pricing details, is simply maintained in the item/supplier cross-reference.
This can also be done with supplier consigned inventory or items that sit within your four walls, but are still considered the supplier's until they are actually used. Financial records are maintained and invoicing is not triggered until the material is moved to a 'non-consigned' location.
Now, take this even one step further: imagine doing the same thing for your customers. Imagine maintaining supplies at the customer site, where GSInnovate can control quantity and trigger a sales order deliver line when the predefined minimum is reached.
GSInnovate's Electronic Kanban can add significant value to the supply chain and support efforts for Lean operations by optimizing efficiency and cost effectiveness of materials and their movement.
