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Kanban

In: Business and Management

Submitted By TandT0121
Words 327
Pages 2
"Today's kanban research is the modern equivalent of yesterday's economic order quantity research." Do you agree? Explain your answer. 


Both Economic Order Quantity and Kanban are based on finding the level of inventory that results in the lowest holding and ordering costs.
Kanban research uses the rate of demand to control the rate of production. Customers or needs determine the demand and this drives the level of inventory. Production is made of only what is needed by demand, not based on a set amount.
The biggest difference between the two is that Economic Order Quantity applies situations in which the demand is constant for the product and new orders are delivered at the point when inventory reaches zero. It is based on the assumption that the different parts: lead-time, purchase price, demand, and costs are all constant.
Kanban is more refined, limits overproduction and is demand driven. It helps smooth out kinks in the production system and eliminate overstock.
Here is a good link: http://www.gemba.com/tool-kit.cfm?id=193
2. There is considerable evidence that getting the correct operating conditions is more important than the choice between MRP, kanban, or reorder point methods in the MPC system. How general do you believe this situation to be?
I agree that correct operating conditions are the most important choice in the MPC system. If you have good operating conditions, with reasonable people willing to do the job correctly they will do what it takes to operate efficiently and effectively. Even the best tools cannot override a poorly run operation. For instance, an operation depends upon inventory to satisfy customers. Should bills not be paid, inventory will not be restocked. MRP, kanban, or reorder point methods cannot solve this issue. Also, it takes people working together, willing to continually fine tune the operation to continue to...

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