Kanban Calculator

Kanban is a simple technique for stochastic materials management. The goal is to work as quickly as possible with small batch sizes and small buffer storages, which are kept at the user operation. These stores will contain, for example, a maximum number of standard containers or bins holding a fixed number of items. The order batch size will be a set of containers. The kanban card is a means to identify the contents of the container and to release the order. One or more empty containers are either sent directly by work center employees to the supplier or collected by one of the supplier’s employees. The supplier executes the implied stock replenishment order and delivers it directly to the buffer. The kanban feedback loop is then closed. One of the tasks of long- and medium-term planning is to determine the type and number of kanban cards for each feedback loop.

When introducing a kanban system, you will inevitable face the question How many kanban bins or cards do I need in my system to guarantee the availability of items?

In its essence, the following condition needs to be satified: The entire quantity in the system must match the expected usage during lead time. Where the entire quantity is defined as number of kanban bins $A$ times bin size $k$ and the expected usage during lead time is calculated by multiplying average weekly demand $WD$ and average lead time in weeks $LT$.

The additional bin $k$ at the end of the equation can be interpreted as the bin, that is in consumption. The safety factor $SF$ is introduced to compensate for fluctuations in lead time and demand during lead time.

Usually, bin replenishment time is depending on the actual bin size. Our advanced version of the kanban calculator accounts for that by splitting replenishment times into three parts: Summed run times $SRT$ per item, summed set up times $SST$ and summed admin time $SAT$, which includes all the time needed for transportation and administration. In adition, the advanced calculator takes into account, that transport batch size $w$ might differ from the actual bin size $k$.

Kanban can only guarantee availability when the following two conditions are met:

Contineous demand: Demand should be as contineous as possible along the whole value-adding chain. That means that that production or procurement orders should be frequent and batch sizes should be small.

Flexible capacity: In reality, there are few situations where demand is truly continuous. Therefore, capacity must be flexible enough to adapt to changes in load.

Kanban systems are typically used for AX-articles in an ABC/XYZ classification. A-articles are the articles with the highest contribution to revenue. X-articles are the articles with the greatest continuity in demand.