Gursharan.Singh
Gursharan Singh
Hi all.. I am currently involved in implementing a project regarding implementing kanban.. Problem definition is:
1) There are 40+ SKUs
2) Demand for most of them is very volatile. Also, their consumption is very irregular as well during any planning period. For example, a particular valve has a monthly demand of 5000 and lets say its current stock is 4000. It often happens that all this 4000 quantity is issued for production in a matter of 1-2 days and suddenly I am facing a stock-out situation!!
3) Demand for only 5-6 items is high and somewhat stable. Also, these 5-6 SKUs together comprise for about 60-70% of total value of all valves. So, they are in line with Pareto analysis and it won't be a bad idea to start with them.
4) A major challenge for me is that there are 10+ plants where these valves are to be supplied to. Also, there are 4 suppliers. So, I am also looking to develop a logic that will decide at what stock level a kanban should be sent and to which supplier (as 3-4 suppliers may supply same SKU for a particular plant).
5) The biggest challenge is not to decide safety stock (as I can do that by assuming a high safety factor), but to decide the lot quantities for each supplier. Valves are very low volume items and suppliers usually club together various quantities of different valve SKUs to send a delivery. They would not agree to send less-than-truckloads for sending any particular SKU in even a reasonable quantity. And that again can mean I am in trouble because of stockout!!
Basically, I would like to know implementing kanban would be a good practice in such a environment. If yes, what should be my approach. Should i start on a trial basis by putting plant-wise high-volume-stable-demand SKUs to see how it goes about. Also, is there any heuristic technique/approach that can help me decide lot quantities.
1) There are 40+ SKUs
2) Demand for most of them is very volatile. Also, their consumption is very irregular as well during any planning period. For example, a particular valve has a monthly demand of 5000 and lets say its current stock is 4000. It often happens that all this 4000 quantity is issued for production in a matter of 1-2 days and suddenly I am facing a stock-out situation!!
3) Demand for only 5-6 items is high and somewhat stable. Also, these 5-6 SKUs together comprise for about 60-70% of total value of all valves. So, they are in line with Pareto analysis and it won't be a bad idea to start with them.
4) A major challenge for me is that there are 10+ plants where these valves are to be supplied to. Also, there are 4 suppliers. So, I am also looking to develop a logic that will decide at what stock level a kanban should be sent and to which supplier (as 3-4 suppliers may supply same SKU for a particular plant).
5) The biggest challenge is not to decide safety stock (as I can do that by assuming a high safety factor), but to decide the lot quantities for each supplier. Valves are very low volume items and suppliers usually club together various quantities of different valve SKUs to send a delivery. They would not agree to send less-than-truckloads for sending any particular SKU in even a reasonable quantity. And that again can mean I am in trouble because of stockout!!
Basically, I would like to know implementing kanban would be a good practice in such a environment. If yes, what should be my approach. Should i start on a trial basis by putting plant-wise high-volume-stable-demand SKUs to see how it goes about. Also, is there any heuristic technique/approach that can help me decide lot quantities.