Re: Fwd: Kan Ban -- BPCS-L

It sounds like you are all over-complicating this issue.  The fact that
the customer is using Kanban methods to drive demand is not really
relevant to YOUR PROCESSES.  If you set safety stock appropriately at
the finished good level, the rest should work properly.

As was suggested earlier, consignment might be a good solution as
well.

What Kanban is really all about is keeping minimal inventory at each
stage of production, and replenishing immediately.  It is really a way
to run a typically discrete process in a more flow oriented manner. 
Work orders do not drive the process in a Kanban shop, they are
typically used after the fact to manage Lot control.

If you have ever seen a "two-bin" method is a parts room, it is
essentially the same as Kanban.  The parts room has multiple bins for
each part in stock.  When a single bin of the part is emptied, that is
the trigger to procure more.  Depending on the lot size and lead time,
you might have two bins for the part or twenty.  Kanban manufacturing
uses the same idea; there is a set of spaces for materials, and an empty
space triggers the "order" down the line.  Generally, Kanban is used in
conjunction with initiatives to drive lot size and lead time down.

If your company WANTS to move to Kanban oriented processes, they should
start at the BOTTOM and move up the bills.

Al wrote . . .

> 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?

At this point, the other name for this is "pass the trash".  The
customer has no idea how many they will need, and expect you to absorb
the risk for them.  You need to get (or guess) some kind of forecast,
and set safety stock figures.

> Can anyone suggest pros and cons of different ways of handling this
business?
> 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.
  
Stop thinking of it as different, it is essentially the same.  This is
just a disorganized customer who orders everything rush.  As far as BPCS
goes, Safety Stock should work; if it doesn't you need to get it fixed. 
You may want to run MRP more often, at least for those items in
question.

> 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.

Ya think?  

It sounds like the company is in over it's head on this new business. 
I would not bother with MRP for those parts until the Bills are set,
just buy lots of the components.  Bad MRP is worse than no MRP, because
MRP gives staff the opportunity to disengage their brains and blame the
system for problems.  Sounds like that is happening here.