RE: Fwd: Kan Ban

Hi,

I agree w/ Lisa, it sounds like your customer is using JIT.  We do use Kan
Ban on some of our tooling items (entered like expense items in BPCS); out
in the shop, we use a two storage bin system - commonly used w/ Kan Ban -
where, when one bin runs out, we request our supplier to send us more and
then move to the 2nd bin.  The 2nd bin is stocked well enough to give our
supplier time to react...  Good luck.

DeeDee Virgei
Nelson Stud Welding, Inc.
7900 West Ridge Rd
Elyria, OH 44036

 -----Original Message-----
From:   Lisa.Abney@xxxxxxxxxxxxxxxxx [mailto:Lisa.Abney@xxxxxxxxxxxxxxxxx] 
Sent:   Tuesday, February 25, 2003 8:50 AM
To:     SSA's BPCS ERP System
Subject:        Re: Fwd: Kan Ban


Al ... Why would the fact that a customer uses Kan Ban make your process
(as the vendor) in BPCS be any different?  My very basic understanding of
Kan Ban is that it's a process of having a visual sign (usually called a
Kan Ban card) that your parts are low (or gone!) and you need to restock
them immediately.  (While your customer may call this Kan Ban, it sounds to
me more like Just in Time, where they don't want to carry any inventory
themselves, but want you to ship it "just in time" to meet their production
needs.)  As the vendor, if you want to be able to fill that customer's
order immediately and ship it the same day, you could keep a minimum
balance on hand.  Depending on how long it takes you to replenish your
minimum balance, that might be equal to the customer's normal order amount,
or might be double that, so that you never run out.  You could also use
forecasts, either based on the customer's forecast (preferable!) or a
forecast based on history.  If your production time is not too long,
assuming you have the parts on hand to produce the item, you might prefer
to stock a minimum balance of the parts, rather than the finished item, if
these are parts that could be used in other production if the customer's
orders suddenly drop off.  Another approach we have used occasionally with
customers is to ship them a certain amount of inventory on consignment.
The inventory remains on our books (in a facility we create in BPCS that is
really at the customer's physical location), and we invoice them once a
month for the inventory they have consumed that month.  This works well for
the customer who has the physical space to store the materials, but doesn't
want to pay for them until they use them, and gives you the ad vantage of
not having to ship a lot of small quantity zero lead time orders (not to
mention not having to store them yourself!).



 

                    Al Mac

                    <macwheel99@xxxxx        To:     BPCS Users Discussion
Group            
                    om.net>                  <BPCS-L@xxxxxxxxxxxx>

                    Sent by:                 cc:

                    bpcs-l-bounces@xx        Subject:     Fwd: Kan Ban

                    drange.com

 

 

                    02/24/2003 11:29

                    PM

                    Please respond to

                    "SSA's BPCS ERP

                    System"

 

 





Do any other companies using BPCS for your ERP have experience with
customers using Kan Ban, where they expect zero lead time for their
parts.  Whenever they run low on the Kan Ban parts, they call us, and
expect immediate shipment of whatever quantity they ask for, using us like
a warehouse with safety stock of the end parts.  Is there another name for
this phenomena where "Kan Ban" is not the right terminology?

Can anyone suggest pros and cons of different ways of handling this
business?
I expect that BPCS can handle it, using some aspects of BPCS with which we
are inexperienced.
We are on BPCS 405 CD mixed mode AS/400 V5R1
We are doing engineering, costs, orders, inventory, by facility.

This Kan Ban concept is new to our BPCS users.  Some co-workers seem to
think safety stock is working Ok, while others seem to think our methods
are not working right for the Kan Ban parts.  I think the whole issue of
what is working, and what is not working, is complicated by us accepting a
whole bunch of parts new to BPCS in which we are trying to make them before

the BOM and Routings get completed, so we are getting to experience reality

for BPCS users not yet ready to use MRP as it is designed to be used, for
those new parts with the engineering backlog.

We are accustomed to driving MRP using customer orders due on various dates

a few weeks into the future.  If Kan Ban is to be shipped when customer
calls, should Post Ship Billing be used instead?
-
Al Macintyre
BPCS/400 Computer Janitor at http://www.globalwiretechnologies.com/

>Summary: Al suggests some areas for additional experiments, unless you
>already tried this stuff.
>
>Allegedly Y"all tried something and it did not work out as expected.
>So invest a few hundred bucks in a call for BPCS tech support to tell you
>what you were doing wrong.
>You can tell them that you put safety stock on this item # and MRP ignored

>it ... why?
>Then they will point out whatever field it is of what file we need to have

>different setting on.
>
>As I understand it, the customer says they will order 250,000 in one year,

>they just can't predict the precise timing ... when they call and say they

>ready for another chunk, they want it damn fast, so we need to be making
>enough before the demand comes in.
>
>Ok, consider FORECASTING ... with MRP100 you can setup a Forecast on such
>an item that says "let's make 5,000 a week" (5k x 50 weeks = 250k).
>System Parameters (SYS800) say that Customer Orders will Consume the
Forecast.
>This means we are making 5,000 a week into inventory,
>along comes Customer Order for 4,000 or 10,000 or whatever.
>we ship to the customer on the basis of THAT customer order line
>because the ForeCast has arranged in advance for MRP to plan on this even
>steady schedule.
>Try that out on an item or two and see if that works for us.
>
>Take a look at Order Policy K
>K for Kan Ban?
>This sounds like the JIT plans where you setup a repetitive "daily"
>factory schedule
>Basically you can setup like 150 periods in which even quantities of the
>item are to be released through the factory
>
>Review Ed DeHarde's suggestions again
>He had one about using a Consolidated Purchase Order Release deal that
>would work the same way as Shop Order Release.
>Perhaps we want to have a Planner Code for the stuff that crosses
>facilities and/or PEN needs, then have a Lee Slater "helper" running this
>deal for the ReSupply Order stuff.
>When Lee is ready to launch POs, he would first print what his "helpers"
>contributed, then do his stuff (process the "helper" output first to avoid

>duplication)
>
>I previously suggested Y"all look at BPCS Outside Operations
>where some outfit outside of our company does some of the work and returns

>it to us
>
>Review the criteria used in running MRP releaseable shop orders report
>Does it list ALL items that would need shop orders?
>Are there some on the list that we do not release shop orders on?
>
>Review the criteria used in running the reports that Lee Slater uses in
>planning Purchase Orders
>Is he getting ALL items that are coded that would need something other
>than shop orders?
>
>Between the two, are there any holes in what we are not looking at?
>
>Review the documentation on DRP ... try out DRP in the TEST environment to

>see if it does stuff that we need to be doing now that we have increased
>the volume of resupply orders
>
>-
>Al Macintyre
>BPCS/400 Computer Janitor at http://www.globalwiretechnologies.com/

-
Al Macintyre
BPCS/400 Computer Janitor at http://www.globalwiretechnologies.com/
See Al at http://www.ryze.com/go/Al9Mac
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