The right process will produce the right results.
This is the sentence used by Toyota to define excellence in production.
Toyota used 14 different principles and I want to explain the number 3.
Principle 3. Use pull systems to avoid overproduction
Provide to your customers downstream in the manufacturing process what they need, when they need it and in the quantity they need.
This reminds us the stock levels (right?). It is curious but the stock level is as the speed dashboard in a car, only indicates the speed we drive, I am sure that nobody would move the speedometer indicator up to show he is driving faster.
Therefore is not a question about how much stock do we have, but how much stock do we need, and then is when we can rationalize it using PULL production
A pull operation means that the materials and products movement is related only to the customer requirement quantity at any time.
It means that the customer demand define what do we need to produce and deliver.
In other words, push means we work onwards, starting in the first process and continue to the last. But pull means working backwards from the customer back to the first process.
However this is not so easy, we will face some problems:
1º We can´t keep the continuous flow with no interruptions
2º Diferent processes means diferent cycle times and therefore stops and starts several times.
How to resolve these problems?
Using supermarkets, what does this mean?, the same that happen in a supermarket, we may have in the shelves 20 packs of rice, but what is happened when there are just five or less?
Somebody is coming and refilling the shelves to keep 20 packs again.
Therefore we can do the same, replenish just what we need, when we need and in the quantity we need as said before in principle nr. 3.
How can we start with this process?
1º We need to analyze the demand variation daily to define how many times do we need to replenish the supermarket.
2º Create some kanban cards to replenish when need.
Regarding this kanban process there are few rules to comply always!!,no exceptions..
1º Next process withdraw the parts need from the previous process.
2º The previous process manufacture only the same quantity that has been already withdraw, noted in the kanban card.
3º Nobody can withdraw without a kanban card.
4º It can´t be material produced with no kanban card.
In other words we produce only what is required in the kanban card, no more no less, and won´t produce anything else till the parts available have been withdraw by next process with a kanban card.
Therefore when we will receive back the kanban card, we will re-start to produce the quantity reflected in the kanban card, no more no less.
In order to get continuos flow we must consider the 3S, Standardize, Stabilize and Simplify.
So we need to have standardize process to produce, withdraw and re-start production to be able to use the kanban process.
Standardize the processes means simplify them and stabilize the production.
Then when we have produced the kanban quantity, the machine will stop production and then operators will move to other área to continue working.
How can we calculate the kanban quantity?
The firts thing is to analyze how the parts are consumed, I use an Excel file where I have the following data:
Part number, top customers (5) weekly consumption, daily consumption, orders frequency, number of deliveries, quantity per pack /pallet, frequency of shipments, and transit time.
Someone may say this is too much information, but if we don´t analyze meticulously we won´t have the right kanban cards and therefore we will have interruptions in the production process.
Now after this analysis we can define the buffer and safety stock
Buffer stock: Buffer is the protection we define to cover the variation in the demand, we calculate it checking the peaks and valleys in the consumption, the minimum and maximum consumption during the week.
Note that average means nothing in stock, if have only the average consumption quantity in stock you will be short soon or later.
Safety stock: We calculate taking into consideration the variation in the suppliers delivery time. And same than buffer based in minimum and maximum peaks not average.
Then now with your buffer and safety stock you can define your kanban cards and start working in a pull system.