Determining the Number of Kanban Card Sets:

Example: Determining the Number of Kanban Card Sets

X automotive, a company that makes muffler assemblies for the Mangalore Motors, uses kanban to pull materials through its manufacturing cells. Tom (owner) has designed each of the cell to fabricate a small family of muffler products. Fabricating a muffler assembly involves cutting and bending pieces of pipe that are welded to the muffler and the catalytic converter. The mufflers and catalytic converters are pulled into the cell depend on current demand. The catalytic converters are made in a specialized cell. Catalytic converters are made in batches of 10 units and are moved in special hand carts to the fabrication cells. The catalytic converter cell is designed so that different kinds of catalytic converters may be made with virtually no setup loss. The cell may respond to an order for a batch of catalytic converters in approximately four hours. Because the catalytic converter cell is right next to the muffler assembly fraction cell, transportation time is virtually zero.

The muffler assembly fabrication cell averages approximately eight assemblies per hour. Each assembly uses the same catalytic converter. Because of some variability in the process, management has decided to have safety stock equivalent to 10 % of needed inventory.

How many kanban sets are required to manage the replenishment of the catalytic converters?

Solution

Here, the replenishment time of the converters or the lead time (L) is four hours. The demand (D) for the catalytic converters is eight per hour. Safety stock (S) is 10 % of the expected demand, and the container size (C) is 10 units.

k = (8 × 4 (1 + 0.1)) /10= 35.2/10 = 3.52

In this case, four Kanban card sets as well as four containers of converters are needed. It is to be noted that whereas calculating for Kanban card sets always round the number up because always full containers are need to work with.