Pull-to-order Environment

This first case study illustrates usage of various types of kanban tickets described in the previous part of this series. In this case, the replenishment policies for the end item reflect a pull-to-order (PTO) manufactured kanban, whereas replenishing kanbans are used for the components. PTO represents a special case of make-to-order (MTO) manufacturing environments, with kanban tickets providing linkage to sales orders and acting as the primary coordination tool.

The case study involves a two-level product structure to build the end item, identified as Product #1 in figure 1. The left side of figure 1 depicts the product structure in terms of the bill of material (BOM) and routing. A final assembly cell produces Product #1 to sales order demand, and completed items are placed in a shipment staging area for subsequent shipment. Production of Product #1 requires Subassembly #1, Part #1A, and other purchased components. These purchased components are stocked next to the final assembly cell, with receipts direct to the location. An inventory location on the factory floor is commonly called a floor stock location or a supermarket location. The right side of figure 1 depicts the factory layout in terms of cells and inventory locations.

is produced to stock in the subassembly cell, using Part #1B and other purchased components. These purchased components are first received in a stockroom, and then transferred to the floor stock location next to the subassembly cell. Completions of Subassembly #1 are placed in the final assembly floor stock location.

Purchased kanbans provide the basis for replenishing purchased material stocked in the stockroom and the final assembly floor stock inventory locations. A purchased kanban acts as a signal to the vendor, and the kanban receipt transaction updates the item's inventory balance. Transfer kanbans replenish the floor stock inventory for the subassembly cell with material transferred from the stockroom. A transfer kanban acts as a signal to the stockroom, and the kanban receipt transaction transfers inventory between the two locations. The left side of figure 2 depicts these kanban signals and the associated kanban receipts.