Kanban for the Supply Chain : Fundamental Practices for Manufacturing Management, Second Edition book cover
2nd Edition

Kanban for the Supply Chain
Fundamental Practices for Manufacturing Management, Second Edition

ISBN 9781439895498
Published January 2, 2013 by Productivity Press
137 Pages 71 B/W Illustrations

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Book Description

Following in the footsteps of its popular predecessor, the second edition of this workbook explains how to apply kanban replenishment systems to improve material flow. Kanban for the Supply Chain: Fundamental Practices for Manufacturing Management, Second Edition provides readers with a detailed roadmap for achieving a successful and sustainable kanban implementation.

Detailing the steps required for each stage of the manufacturing and supply chain management process, this updated edition focuses on creating an environment for success. It addresses internal mechanisms, including leveling production schedules, as well as external elements, such as conducting a thorough analysis of customer demand. Numerous techniques are presented for setting up kanban that consider a wide array of material types, dimensions, and storage media. This edition presents a wealth of new tools and techniques useful across the broad spectrum of manufacturing environments, including:

  • A statistical data cleansing technique to remove questionable or irrelevant data from kanban calculations
  • Correlation analysis based on simple Excel techniques to guide the decisions around which part numbers "qualify" for kanban
  • An alternative "stair-step analysis" approach for those who are unable to generate correlation data and prefer to use more readily available monthly demand history
  • An approach to analyze supplier performance data vs. lead time and lot size expectations, with risk mitigation strategies for poor performing suppliers

This book is for those who are ready to stop thinking about a conversion from materials requirements planning push techniques to kanban pull techniques and want to make it happen now. Stephen Cimorelli provides actionable advice for installing fundamental kanban concepts that can immediately help you increase manufacturing productivity and profitability. The book includes team-based exercises that reinforce key principles as well as a CD with helpful outlines, charts, figures, and diagrams.

Table of Contents

Overview of Kanban in a Lean Environment
What Kanban Does
Definitions: Building a Common Language
Building a Lean Environment
Takt Time
JIT Preparation for Kanban
Begin with 5S

Supply Chain Management Principles
Defining the Supply Chain
What Is Supply Chain Management (SCM)?

Applying the ABC Classification Applying ABC Classification Step-by-Step

The Sawtooth Diagram: Analyzing Inventory Behavior
Sawtooth Diagram Basics
Sawtooth Example: Analyzing the Behavior of a Part Number
Sawtooth Assumptions versus Reality
Analyzing Demand Pattern Variability
Potential Solutions for Covering Potential Stockouts

Lead Time and Lot Size Guidelines
Using the EOQ Formula
Fine-Tuning the EOQ
Establishing Carrying Cost
Setting Lot Size Guidelines
Managing Replenishment Lead Times
Determining Lead Time Objectives

Statistical Analysis 101 and Demand Variability
Customer Demand Variability
Using Z Scores
Recommended Formula
Optimizing Inventory for On-Time Delivery: The Case for Data Cleansing
How Much Safety Stock Is Enough?
Deciding Which Parts to Put on Kanban
Using Correlation Analysis to Guide Kanban Candidate Selection
A Simplified "Stair-Step" Approach

Sawtooth Exercises
Managing Kanban during Decreasing Demand
Recommend Actions for Adjusting to Decreasing Demand
Applying the Solution for Decreasing Demand
Further Lot Size Reduction Is Possible Using a Multicard Approach
Other Supply/Demand Issues
The Problem of Early Deliveries
Two Potential Actions for Early Delivery
The Problem of Late Deliveries

Physical Techniques of Kanban Replenishment Systems
Using Kanban’s Manual–Visual Control Techniques
Painted Squares on the Floor
Technique for Storing Single Card Parts
Technique for Storing Multicard Parts
Techniques to Identify the Order Point Inside the Bin
Information on the Kanban Card
Handling the Kanban Card
Options for Designating Permanent Locations
Kanban Management for Raw Materials
Challenges and Recommendations for Managing Raw Material
Employing a Ledger System for Managing Raw Materials
Cautions and Recommendations for Setting the Order Point

Kanban Maintenance
Kanban Adjustment Report and Card Maintenance
Supplier Performance Reports and Stockout/Expedite Tracking Report
Stockout and Expedite Tracking
Supplier Performance
Kanban Audits

Kanban Implementation
Roles and Responsibilities in Kanban Implementation
Using a Project Plan for Implementing Kanban

Stabilizing Production
Creating a Hybrid Push/Pull Model: Min/Max Stabilization Process
Calculating Min/Max Levels

What You Have Learned—What You Need to Practice
Next Steps
Final Word on Lean


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Steve Cimorelli is an educator, speaker, and author in the field of materials and supply chain management. He holds a BS degree in industrial engineering from the University of Central Florida and is certified at the Fellow level by APICS in production and inventory management (CFPIM). He has more than 30 years of experience in manufacturing, engineering, materials, and supply chain management in a variety of industries, including aerospace and defense, industrial equipment, and commercial products. For the past 10 years, Steve has led and consulted with numerous distribution centers and manufacturing plants around the world, developing and implementing Lean manufacturing and materials excellence practices, especially in the areas of kanban, forecasting, line balancing, and production stabilization.

Mr. Cimorelli was first introduced to Lean manufacturing and just-in-time principles in the late 1980s while working toward his certification in production and inventory management (CPIM) with APICS, the Association for Operations Management. As he explains, "These ideas resonated so strongly with me that I began to actively seek opportunities to put them into practice. It wasn’t until 1995, when I joined Square D–Schneider Electric that I saw first-hand how they actually worked. From that point on, I became a vocal advocate and implementer of these practices throughout Schneider Electric and elsewhere through consulting work, teaching, and publishing."

His other published works include "Lean Six Sigma for a Leaner Supply Chain" in Driving Operational Excellence (Metaops Publishing, 2010), "Control of Production and Materials" in the Handbook of Manufacturing Engineering (Marcel Dekker, 1995), and two cover stories in APICS—The Performance Advantage magazine, "Reduced Demand" (2002) and "Anticipating the Reemergence of Demand" (2010). These and other works can be found online at SCCInventory.com.

Mr. Cimorelli lives in Titusville, Florida, with his wife, Cindi, English Springer Mr. Darby, and the enduring memory of their Springer Spaniel Ranger the Dog.