Kanban Analysis Example
Problem Statement
Determine the number of Kanban cards to make for the following case:
Items | Value |
|
Lead Time |
5 days |
|
Daily Demand |
100 |
|
Safety Stock |
30% |
|
Container Size |
20 |
How to perform Analysis
Open Sigma Magic
- Click on the Sigma Magic button on the Excel toolbar.
- Click on the New button to create a new project.
Step 2: Add the analysis template
- Click on the Tool Wizard to add the analysis template.
- Click on Lean and then Kanban Analysis.
Step 3: Specify analysis options
A new worksheet will be added to your workbook. Analysis Setup will be automatically opened, in the setup tab specify the following details.
If you need to make changes to the charts, click on the Analysis Setup and then the Charts tab. You can specify the following details,
Labels:
- Add a title for the chart.
- Label the X-axis and Y-axis appropriately.
Appearance:
- Adjust colors, font sizes, or other visual elements as needed.
- Enable/disable gridlines or background shading.
Finally, click on Verify tab to ensure all the inputs are okay and shown in a green checkmark.
Step 4: Generate Analysis
Click OK and see the final and overall result. Click on Compute Outputs to update the outputs.
Interpreting Results
- Production Kanban is deployed, which reveals that the procedure is demand-driven of production.
- Procurement Frequency New orders are called every 4 days to restore the inventory quantities.
- Container Volume: The unit capacity of Kanban container holds 20.
- Safety Stock: 30 units of stock are kept safe to absorb all the variability, either in demands or supplies side.
- Average Daily Demand: This is 100 units as a daily value.
- Average Lead Time: It takes 1 day to replenish inventory once a Kanban signal is triggered.
- Cycle Inventory: 500 units are maintained as the average working inventory.
- Safety Inventory: 160 units act as a buffer to ensure smooth operations in case of unforeseen demand or delays.
- The number of calculated Kanbans is 33 to ensure that inventory levels are properly maintained without getting below the level of safety stock or going over the maximum inventory capacity.
- Proper regulation of inventory levels in the system to handle average demand with minimum chance of stockout or overstocking.
- This safety stock provides an additional 160 units which will act as the cushioning capacity against any potential fluctuations in the demand or unexpected delays in the lead time during production.
- Orders every 4 days balance replenishment with inventory management, reducing unnecessary stockholding costs while ensuring availability
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