Buisiness Analysis

Learning Team: Inventory System – Kanban System

A simple definition for the two-bin kanban inventory system is an inventory control method that contains two bins or containers with parts that when one is used an order is executed to replenish. While this occurs the second bin is use and will contain enough parts to use until the first bin is replenish (Business Dictionary. 2011). The implementation of this type of inventory system has been increasing over the last years because is simple and easy to implement and is very efficient (Claudio, D. & Krishnamurthy, A. 2007). Kanban system helps control the inventory because is design to contains on bin and dispatch to the point of usage only the quantities needed according to the production schedule (S. Kotani, 2006). In addition to the previously mentioned advantage, this system is easy to manage to both the Warehouse department and other areas. Is a visual system because when one bin or container is used usually is turn upside down making it easy to detect. Also two bin system are used with colored bins, green when the first bin is used and red when the second bin is used. As is known when you implement a system there are advantages and disadvantages, just to mentioned some, the Kanban method is a very manual system, it uses what is called a kanban card in each bin making it easier to loose in a busy environment. Also when there are changes in parts usage the Kanban should be revised. In addition and as stated by S. Kotani a safety inventory stock should be calculated to cover for fluctuation in daily demand, fluctuation in the rate of parts used by the assembly lines per unit time in a day, delivery delays and so on.

References

Business Dictionary, (2011). Definition: Two Bin System. Retrieved on October 15, 2011 from http://www.businessdictionary.com/definition/two-bin-system.html.

Claudio, D. & Krishnamurthy, A.. Kanban-based pull systems with advance demand information. International Journal...