8. Conclusion
The kanban is a practical tool for implementation of JIT delivery in supply chain operations. The functions of the kanban are twofold––they are used as a means for production control and process improvement. The role played by kanbans in production control is to tie different manufacturing processes and to ensure that the delivery of necessary amounts of material and parts at the appropriate time and place. The use of the kanban in process improvement includes improving the operations in the production process with emphasis on reducing inventory costs.
It is very difficult to develop a generalized mathematical model that incorporates all its salient features such as demand pattern, leadtime (processing time, waiting time, conveying time), information (kanban) delivery time/cost, setup time/cost, production capacity, and batch size. In the supply chain system controlled by kanbans, the total quantity of products produced in each stage over a period ties the individual stages together. Without this variable approach, the inventory model of a supply chain system with a series of stages is hard to establish.
Supply chain systems controlled by kanban mechanisms are inherently easier to control. The company need not be concerned about the random demand over time and predict the demand pattern for future production as kanban technique is a customer-oriented approach. Once there is a demand, the kanbans are issued or released at the end of the production line for supplying materials from the preceding stage(s). This makes kanban technique more useful and practical for production. In other words, the supply chain system is easy to control with kanban technique. In this research, it is also shown that the kanban technique can be applied to the places where the material to be delivered to the other places can be delivered in batches. As the kanbans are circulated smoothly in a supply chain system, the productivity increases and the wasted materials, time and labor in the production are reduced.
Overall, the model developed here can help a manager to respond quickly to consumers’ need, determine the right policies to order the raw material, deliver the finished goods, and efficiently manage their operations. As a result, an organization can economically benefit from savings by effectively managing a supply chain. An MINLP model for a multi-stage supply chain system considered here provides insight in formulating and solving the problem. The greedy heuristic is very promising in terms of its efficiency and quality of the solution. The problem has potential in implementing the current approach either in an existing system to improve the current operational approach or in a new system where planning needs to be performed to incorporate the results. For future research, the model can further be expanded to converging and diverging supply chain system where the system is either supplied with components from several sources in branches or delivers components to other facilities or buyers downstream.