Production & Operation Management By Navin Khaware

Production & Operation Management

“Flow where you can, pull where you must”

Definition of KANBAN • It allows to schedule production and manage inventories more effectively. In the kanban system, cards or tickets are attached to batches, racks, or pallet loads of parts in the manufacturing process. •

When a batch is depleted in the assembly process, its kanban is returned to the manufacturing department and another batch is replaced immediately.

• Since the total number of parts or batches in the system is held constant, the coordination, scheduling, and control of the inventory is greatly simplified.

• YUKEN INDIA LIMITED (YIL) was set up in 1976 in Technical and Financial Collaboration with YUKEN KOGYO COMPANY LIMITED, JAPAN (YKC) for the manufacture of Oil Hydraulic Equipment.

• YIL is a Listed Company with 40% of the shares held by YKC and the rest by Financial Institutions, the Indian Promoters, and the Public.

• YIL has been certified as a ISO-9001 : 2000.

• QUALITY POLICY "We will strive to meet customer's expectations by providing world-class hydraulic products, components and services through total employee commitment and continuous improvement

 The Kanban system in manufacturing was introduced as part of a re-engineering exercise. The company had seen a sharp decline in its revenues from 1998 to 2000.  In the financial year ending 1999 its revenues had dipped to Rs 24 crore from Rs 29 crore in the year ending 1997.  One of the major reasons for low profitability was the large amount of unused finished inventory stock.  Yuken India introduced lean manufacturing in 2000 to deal with this problem.  One thing led to another and the just-in-time Kanban system was introduced.

Major reason for introducing Kanban system

“To produce exactly what the customer wants and when he wants it, at a fair price and with minimum wastage.”

Inventory as part of Kanban • As a part of Kanban system three major inventory system was introduced at Yuken India ltd  CONWIP  Two-bin system  Fixed Time Variable Quantity system

CONWIP •

In a CONWIP (Constant Work In Progress) trays are used as Kanban.

•

Each tray containing spare parts for manufacturing has a unique number and is identified by a laminated barcoded label with a photograph of the item.

•

When trays are ready for movement to the next operation, a sheet containing all tray IDs is used to identify the trays to be moved.

• Scanning the tray ID barcode enables the identification of material requirements for manufacturing for the current and the next operation.

Two-bin system • Two bins are placed one upon the other containing spare parts in the manufacturing area. Material required for manufacturing is drawn from the upper bin when required. • When the upper bin is empty, the bar-coded plastic slot for the lower bin is removed and the location of the bins is reversed so that the empty bin becomes the lower bin.

supplier

Requisition slip

Bar-code

Dispatch card

scanned Slip attached

put

Empty bin

Plastic slot

Scanning the bar code enables checking the items in stock and also generation of the bill of material required. As a result of the two-bin system received material is filled into the lower bin and the label is put back in the plastic slot.

Fixed Time Variable Quantity system • The FTVQ is used for long lead-time items like imported spare parts. • A monthly stock of items is taken in and cards are filled in. • Orders are placed for items consumed in the previous months as replenishment of imported items might take three to four months.

Benefits from the implementation • It has resulted in a smoother flow of operations. • Has resulted in drastic reduction in inventory levels and has facilitated a smooth flow of operations . • Successful integration of data across Yuken’s various departments with its existing ERP system. • By using CONWIP and the two-bin system the order of spare parts is down as per the day-to-day demand, thereby controlling inventory successfully. • It has also helped Yuken enhance the capability of its pull system by helping it dynamically reconfigure bin and tray sizes.

Thanks

By: • Navin Khaware

(B-53)

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