Kanban Management and Kanbans

JD Edwards EnterpriseOne Kanban Management enables you to streamline the day-to-day functions of the shop floor and associated departments. Kanbans are execution tools that you use when the production and inventory control systems are based on a pull system, rather than a push system.

Kanbans represent predetermined quantities of components at specified locations on the production line. They are designed to minimize work-in-process inventories.

Kanbans are visual cues that authorize the replenishment of inventory at a specified consuming location in a pull environment. When kanban inventory is consumed, a replenishment action is triggered when the holding bin is emptied.

A kanban can include, but is not limited to, bins used to physically transport material from work center to work center on the production floor. Kanbans can also represent pallets of raw material.

You can replenish inventory by manufacturing activity, procurement, or simply the movement of the required goods. The size attribute of a kanban determines the replenishment quantity. The size of the kanban affects the effectiveness of the kanban system significantly; when the kanban size is too high, the system contains more inventory than necessary, which is unacceptable. When the kanban size is too low, the system eventually runs out of inventory.

Kanbans support just-in-time manufacturing, but are not used exclusively with repetitive or lean manufacturing. You can also use them effectively in a discrete manufacturing environment.

Kanbans enable you to pull material from five sources:

• Work center

  When a work center kanban is checked out, the system finds an open work order or rate schedule. When no work order or rate schedule exists, the system creates a work order or rate schedule to fulfill the kanban demand. When the kanban is checked in to indicate replenishment, an inventory transfer from the supplying location to the consuming location occurs as defined in the kanban master.

• Inventory

  When an inventory kanban is checked out and checked in at its consuming location, the system creates an inventory transfer to move the material from its supplying location to the consuming location. For example, you can move required materials from raw materials inventory to a work center location on the shop floor.

• Supplier

  When you check out a supplier kanban, the system creates a purchase order or initiates a blanket purchase order release, depending on how you set up the system. Additionally, depending upon setup criteria, you can also enable the check in of the kanban to perform the purchase order receipt for goods received. When the kanban is checked in to indicate replenishment, an inventory transfer from the supplying location to the consuming location occurs as defined in the kanban master.

• Branch/plant

  When you check out this kanban, the system creates a sales order and purchase order for the kanban item. When the last card is checked in, the system receives the purchase order that was created at check out. This kanban type is particularly useful for companies that prefer to utilize the formal sales and procurement transactions (transfer orders) between facilities instead of managing inventory replenishment using inventory transfers.

• Outside assembly

  When you check out an outside assembly kanban, the system creates a sales order for a list of components that is required to make a product. When you check in the kanban, the system creates a purchase order for the finished product. When the kanban is checked in to indicate replenishment, an inventory transfer from the supplying location to the consuming location occurs as defined in the kanban master. This kanban is particularly useful for companies that use outsourcing to provide additional value to their products and want a more robust record of inventory balances. Special setup is required to use this kanban type.

Kanbans provide automated background transactions that eliminate much of the required paperwork and data entry.