Calculating Number of Kanbans
The number of kanbans in the system will go a long way to calculating kanban signal points, as determined by process demand. There are numerous ways to calculate the number of kanbans necessary for a given process. While you are welcome to use the method with which you are comfortable, I have seen the following calculation work in an environment that is working toward quality improvement.
Number of Kanbans = ((PD * LT) + (Z * SD))/KQ
PD: The is the average demand per period in which you are measuring. For instance, if you measure demand on a daily basis, this should be the quantity of widgets typically used in a day.
LT: LT stands for the lead time, or replenishment time, necessary to replace the PD. Keep in mind, this should stay on the same time scale as the PD. For instance, if your lead time is a week to replace the PD, this number should be 7, not 1.
Z: This is the Z factor, typically 1.645 for a 95% quality compliance. Rather than try to explain the theory of the Z factor here, refer to the following for a quick overview,
SD: This is the standard deviation of the process. As you probably know, it is a measure of how consistently a process produces the same result. In kanban terms, a higher standard deviation would require more substantial re-work, and may increase kanban size.
KQ: KQ is for Kanban quantity, in terms of the batch size in which the product is to be produced.
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