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Supply Chain Mgmt – Peter J. Metz
A process-oriented, integrated approach to procuring, producing, and delivering end-products and services to customers. It includes sub-suppliers, suppliers, internal operations, trade customers, retail customers, and end-users. It covers the management of materials, information, and funds flows.
JIT uses the kanban system to manage the pull production system and help coordinate the production and movement of parts and components between processes to avoid excesses or shortages.
JIT requires confidence that the supplier chain will meet commitments
It is important to understand that kanban works within the framework of JIT to manage flow. This means that a company cannot achieve JIT without some form of kanban. Conversely, if a company is not pursuing JIT or a lean environment, kanban is not likely to succeed. We will look at a few points regarding the lean environment in the next section.
Inventory mgmt.
• Order point (OP). An established inventory level that when reached, signals the need to issue a replenishment order
• Safety Stock (SS) A quantity of inventory planned to be on hand to protect against fluctuations in demand
• Lead Time (LT) The time required to replenish inventory. This is normally measured as the number of days from when the order point is broken, to receipt and put-away of the corresponding replenishment order. May include order processing time, supplier lead time, and receipt and put away time.
Traditional approach – fixed. (email) JIT
Toyota – Kanban, Jidoka
Simplicity : Kanban provides clear and precise manual-visual
Lower cost: Production and move signals utilize low cost visual tools
Agility : Pull processes respond quickly to changes in customer demand
Reduced inventory: Kanban limits overcapacity in processes and avoids overproduction of inventory, driving less “just in case”
Minimal

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