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  Inventory or Not inventory –
That is The Question

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For the most part Lean Manufacturing develops the NO-Inventory mindset. It gives us many reasons to prevent storing what we don’t need. It is fair to say that sometimes we may tend to exaggerate this concept and it can carry disruption in our operation.

It is true that we can’t always run a perfect flow of product and supplies, especially if some of those supplies may be furnished by external sources. Even if some of the components are made in site, there is a slim possibility that we can efficiently get one piece or kit of parts at the time.

Why is that?

Many components that we produce in site come from machines which would not be efficient if only one piece is made at a time. Plasma cutters, Punch presses, Hydro jet cutters, CNC machines, Plastic injection or blowing machines, not always can be set up to produce only one part number. Therefore some batching will be necessary.

Toyota and other very lean manufacturers resolve this by means of the popular “supermarkets” which are mainly POUS - Point of Use Storage centers. They establish a maximum and minimum “Kanban” mark for each component.

How is a Kanban set?

Currently we have several external suppliers that can make a daily delivery and even in some cases more than once a day deliveries; as per the internal suppliers, for the most part will work with several deliveries per hour.
I have two plants under my advice that have a 120 second takt time in their final lines. Therefore they require a kit of parts every two minutes, NOT 30 per hour which would be a tremendous volume. One supplier is the wooden parts that need to be routed, then finished and delivered to assembly. They have a rate of delivery of 5 kits every 10 minutes; the hydro-jet cut parts have a wider window between cycles of the cutting machine. Considering all of these normal situations, it is necessary to establish the necessary Kanbans.

  1. Think of the economic (cost-effective), operation of each supplier and the shortest achievable frequency of delivery after a signal for requirement (when the Kanban reaches minimum). This can be an order to external supplier.
  2. With that time in mind, simply multiply the number of those parts you will need for a smooth flow of production during that “supplier-lead-time”; that is the minimum order of your Kanban.
  3. The maximum will usually be a “load” of the supplier which can be up to 200% of the minimum for small components. For larger components it is critical to make sure of the precision of delivery, since it will take place at the time the station runs out of the previous delivery.

Example: An automobile plant with a Takt-Time of 60 seconds will get exactly 6 engines each 6 minutes, 8 exhaust systems each 8 minutes and so on. Smaller parts like wiper motors may be delivered to the customer station, (usually by external supplier), once each hour in the amount and mix that the program requires. In optimal conditions these deliveries will happen during the 60 seconds following the last unit utilization.

Supplier Reliability

Obviously the dependability of the supplier becomes critical here. Suppliers, even if external, become engaged in this JIT delivery process, they are our partners in the business. To increase this dependability, most of them have a “cushion for emergencies or contingencies” by keeping some inventories in facilities, (sometimes trucks and trailers in the parking lot), near the plant.

Help is Available

We are capable and willing to help your company develop the Just In Time strategy with the alignment of the internal supply and the Partnership Deals with your suppliers and logistics involved.

Send us an email now! JIT-Strategy@LeanExpertise.com

 

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