Different Types of Kanban
I know my last post was about the concept of kanban. It has been a concept that springboarded a lot of my learning over the years. It may have started with implementing a kanban system but ended up learning about visual management, the seasonality of the business, what the customer is demanding, and change management.
There are two important learnings that I have had when implementing a kanban system. Two that I thought I would share.
The first lesson is that when a kanban system is mentioned people jump to a conclusion that all materials will be handled in one way. All the materials will be set with a min/max. The min being the reorder point and the max being the point to fill the order to. This assumption scares people because setting everything to a min/max system would mean increasing inventory overall and holding inventory on some parts for a very long time. This is not a smart thing to do. People need to know that a system can be put into place that takes each component into consideration and does the right thing for that component.
This brings me to the second lesson. What is the appropriate way to handle each component?
So far, I have learned three ways to handle a component in a kanban system.
The first way is the typical kanban replenishment system. A minimum is set for a reorder point based on lead time and safety stock. The maximum is the highest quantity wanted on hand at one time. I have found the best time to use this is when a component is used on a nearly daily basis and in high quantities.
The second way is another typical way. The non-replenishment kanban. This is a kanban that is filled but not recirculated. I have found this to be best used when a component is needed for a very short period of time, a day or week, and then the component is not used for a long period of time.
The third way is what I call a seasonal kanban. It is a component that will be used frequently and with higher demand but only for a short period of time, a month, two, three. It is long enough that a non-replenishment kanban is not proper to use and a replenishment is too permanent. What I have done is set up the component on a replenishment kanban but when the use is winding down, I convert it to a non-replenishment. When the season is over the component has no inventory so things aren’t stored for an unnecessary amount of time.
Using a combination of these three can make for a very efficient system.