Wrap up: What happened and what can we do to help?:

94 keep operations running smoothly.

d. Raw Materials Buffer

As with storage, this buffer already existed but the function was to store raw materials. The purpose of this buffer is to store and control the supply of raw materials from the vendors. By inserting these buffers between the two groups of processes, the total production process can be viewed as the combination of several blocks.

In the new system, the concept of trigger point is applied since the company wants to apply a single-card pull system that is considered to be simpler. However, this system can only be applied if there are no different parameters between two adjacent workstations or JIT blocks, particularly in terms of batch size and lead time. In the new system, the batch size and lead time are likely to be different from one block to another block, therefore, the concept of trigger point must be applied to deal with this problem. By using this concept, a Kanban operating at the particular block that requires a higher batch size is not executed directly but it waits until the total Kanban quantity received reaches the particular value that should be close enough to the batch size of the block. This value which is then called the trigger point, indicates that production must be started when the total requirements have reached the point. The other benefit of a trigger point is to dampen the variations of production and demand. Similar to a change in the number of required Kanbans conducted by supervisors, by using this concept the supervisor can also change the value of the trigger point in order to avoid shortage or overproduction as effects of the variations.

Although the use of trigger point has some advantages, there are some drawbacks as well. By applying the trigger point, the system tolerates a considerable amount of buffers that cannot be minimised unless the lead time or the setup time is reduced. In addition, if the demand is fluctuating, the shortage is likely to be unavoidable. To overcome this problem, the status of the trigger point must be updated continuously.

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the quantity taken by the customer, the number of sub-pallets (cartons) in the containers (referred to as Kanban quantity) and the capacity of each buffer. Before determining all of these parameters, discussions with the customer, the Drug Process Plant, were conducted. In this step, as a result of the previous approach, determining parameters was not based only on the theory but more on practical reasons as well. A practical formula such as the Kanban formula (Monden, 2011) cannot be applied since the lead time for each block is very different to others. For instance, block 3 and block 1 take 1 hour and 2 hours, but the block 2 requires a much longer time (around 6.5 days) as shown in figure 3.10.

Figure 3.10: The design of pull system for JPF 113155

3.3.3.1. Block 3

There are three parameters that will be determined for this block i.e the batch size, Kanban quantity and the frequency of picking.

a. The Frequency of Picking

In the new system, the customers take the items within interval of three days instead of weekly as

3 Kanbans @ 30

(green Kanbans) 1 Kanban @ 360 (Yellow Kanbans)

30 30 Buffer 2 30

30 30

500 Trigger

Point

Raw Material Buffer 1

30 30 30 30 30

30

3 2 1

1 Kanban @ 500 (blue Kanban) Storage

30 30

Customers

Batch Min 30 Carton Packaging – Blistering/ Strip Sealing

(1 hr.)

Batch Min 500 Dispensing

(2 hrs.) Batch Min 360

Mixing/blending – Inspection/Quality Control (6.5 days)

30 30

30

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in the previous system. Therefore, the frequency of picking can be determined directly (daily).

b. The Batch Size and Kanban Quantity

The batch size is determined based on the following considerations. The average order of the trial item JPF 1131155 is 370 units weekly or 74 units daily. To stabilise the production, the batch size at the storage was determined to be 30 units so the Kanban quantity in the block 3 is also 30. The customer can take the finished items in multiple of 30 i.e 30, 60, 90 or even 120 daily depending on need. Since the average order is 74 units and the frequency of picking is daily, three Kanbans (or equal to 90 units) are sufficient to run the system at Block 3. Therefore, the customer is not allowed to take more than 90 units. However, the supervisors can add or reduce a Kanban when the system is considered to be tight or loose. To distinguish the Kanbans from another block, in this system, the colour of the Kanban is green.

c. Trigger Point

In block 3, a trigger point is not required since the processing time in the block is very short, that is around one hour. So a minimum quantity to indicate that the previous block must start production is not required and block 3 can replenish the empty container immediately.

3.3.3.2. Block 2

In this block, only two parameters will be determined i.e the batch size and Kanban quantity.

Frequency of picking is not required because it depends on the requirement of the block 3.

a. The Batch Size and Kanban Quantity

The batch size is determined according to the following considerations. The throughput time in block 2 (from the mixing/blending process to the inspection/ quality control test) is around 6/5 days based on the most pessimistic estimate of supervisors. The batch size of block 2 should be 5 times 90 units (equal to three Kanbans at Block 3) or 450 units. Because of the capacity of the mixing/blending machines that only produces 120 sub-pallets (units) at once, the batch sizes for the trial item can be in multiples of 120 i.e 120, 240, 360, 480 or 600. However, the batch size of 360 units or 480 units is closer to 450 units. The last figure is not selected because it will increase the level of inventory in the buffer. In addition, a lead time of five days is the most pessimistic, which means the average can be lower than this figure, so 360 units is sufficient to run the system. Therefore, the batch size and the Kanban quantity at block 2 is 360 units. In this block only one Kanban is required. To distinguish the Kanbans from the other blocks, the colour of Kanban is yellow.

97 b. Trigger Point

As the supply of 360 units at block 2 will finish within four days so as to reduce the chance of shortages as well as to avoid the effect of the different batch sizes, the trigger point must be established in this block. Since the total average demand for five days is equal to 74 times 5 or 370 units, there is an average shortage of around 10 units (370 - 360) every five days. To overcome this problem, the trigger point is set at 300 units, which means there are 60 extra units (360 - 300) for five-day requirements. Therefore, in the new system, when the total Kanban quantity at buffer 2 achieves 300 units, the production in the previous block must be started or this means another Kanban must be issued to block 1. Another way to reduce the chance of shortages in block 2 is to decrease the throughput time from five days to four days. This can be carried out by improving the performance of each process such as by applying techniques including quality improvement, total preventive maintenance, or continuous improvement.

However, if all efforts are not successful or there are undesired situations such as machine breakdown or increased production, a Kanban must be added.

3.3.3.3. Block 1

The last block, the automated dispensaries, has been set to run in batch sizes of 500 pallets (3000 sub-pallets) that will supply not only dispensed items but also other items based on average daily demands. The batch size of 500 units is determined according to the most reasonable production quantity of the operation with regard to the utilisation of the machines and the availability of the workers. In this block, the colour of the Kanban used is blue. Based on all of the above parameters, the design of the pull system for the trial item at the Drug Process Plant can be described as Figure 3.10.

Average Daily demand = 74 sub-pallets (standard deviation = 30 sub-pallets) The number of sub-pallets in the standard container = 30 units