Aug 19, 2014 | Posted by Ben Thompson
Hello and thank you for typing in to my adventures in TPS learning, this week is a busy one blog fans as we are gearing up to phase in a pull inventory model area here at Durabody Ltd. Our wall sub assembly area is set for a make over we are looking at developing a stable inventory system with better visibility to make our material handler/purchaser’s life easier and remove the guess work for when to place the orders for the components this area requires to keep production going.
Now if you are new to the blog and/or TPS there is a prior post on the philosophy behind just-in-time inventory systems and the fundamental differences between the traditional push inventory system and just-in-time’s pull inventory system right here.
So, we are specifically implementing what is know as a 2 bin pull inventory system that looks a lot like this:
Basically bin A being empty is a visual indicator, much like a kanban or my even use a kanban system, that tells us we must place an order for this part. How much inventory? Excellent question bloggy! The bin sizes are directly related to our rate of consumption and lead time for the part. We established the amount of these parts used in the last 6 months and a lead time for said part of 6 weeks. So say in 6 months we used 600, 6 weeks is 1/4 of 6 months so we divide 600 by 4 to get 150. Now there is one final step and that is adding 10% to our bin size as a safety stock bringing our bin size to 165 parts.
So, by the time the order for bin A arrives bin B should be just about depleted, but if its not depleted and there are still parts in bin B then we don’t we don’t yet have an indicator to pull more parts from the supplier. Inventory systems are a lot like a biological organism, if supply matches demand, you have a lean healthy body but if supply is just pushed into the system or less then demand you either carry the dead weight or are starved. As usual with TPS a little bit goes a long way in helping you,