The right replenishment model for your reusable container initiative can maximize efficiency and reduce mistakes caused by human error, while still taking the challenges of your unique business environment into account. In this final entry in the “Limits” series, we’ll examine the Kanban/JIT scheduling system.
Kanban is a Japanese word meaning “signboard” or “billboard.” In the manufacturing industry, it refers to a lean, just-in-time scheduling system, in which resupply or production is determined by the actual demand of the customer. This process is often also referred to as “JIT,” or Just-In-Time. The moment a container is consumed at the point of use, an electronic signal is sent, notifying the system that the container has been used and automatically generating an order for its replenishment.
When coupled with one of the other replenishment models we discussed in the other “Knowing The ‘Limits’” blogs, an additional “safety stock” reduces the risk of reusable container shortages. This model allows users to increase the number of reusable containers they can have on hand, to make up for unplanned delays or errors in the supply chain. While it acts as a buffer of safety, it is nonetheless important to minimize the amount of safety stock necessary.
Safety stock is typically assigned in relation to one of the following metrics:
• TIME – The safety stock is the amount of inventory used in a specified number of inventory days, based on the location’s demand.
• PERCENTAGE – The safety stock is a specified percentage of a location’s total inventory and can exceed demand.
• QUANTITY – The safety stock is the amount required to ensure the minimum quantity on hand is maintained at all times.
The automation of replenishment orders not only reduces the chance of human error affecting the quantity or content of the order placement, it also accelerates the process by eliminating the time spent communicating between personnel as reduced stock levels are tracked and reported. Intelligent, automated management steps can reduce the number of reusable assets needed, minimize end user involvement, and increase the velocity of container movements.