Reference no: EM13781470

Determining the number of Kanban card sets

Meritor, a company that makes muffler assemblies for the automotive industry, is committed to the use of Kanban to pull material through its manufacturing cells. Meritor has designed each cell to fabricate a specific family of muffler products. Fabricating a muffler assembly involves cutting and bending pieces of pipe that are welded to a muffler and a catalytic converter. The mufflers and catalytic converters are pulled into the cell based on current demand. The catalytic converters are made in a specialized cell. Catalytic converters are made in batches of 10 units and are moved in special hand carts to the fabrication cells. The catalytic converter cell is designed so that different types of catalytic converters can be made with virtually no setup loss. The cell can respond to an order for a batch of catalytic converters in approximately four hours. Because the catalytic converter cell is right next to the muffler assembly fabrication cell, transportation time is virtually zero. The muffler assembly fabrication cell averages approximately eight assemblies per hour. Each assembly uses the same catalytic converter. Due to some variability in the process, management has decided to have safety stock equivalent to 10 percent of the needed inventory. How many Kanban sets are needed to manage the replenishment of the catalytic converters?

K= 8x4(1+.1)/10= 35.2/10 = 3.52 or 4 sets

Based on the above.

Meritor hires a team of consultants. The consultants suggest a partial robotic automation as well as an increase in safety stock to 0.125. Meritor implements these suggestions. The result is an increase in efficiency in both the fabrication of muffler assembly and the making of catalytic converters. The muffler assembly fabrication cell now averages 16 assemblies per hour and the lead time has been decreased to two hours response time for a batch of 10 catalytic converters. How many Kanban cards are now needed?