Determining the number of kanbans in a multiproduct, multistage production system

Significant reductions in setup and lead times reported by the Japanese have led Western manufacturers to rethink the need for complex computer-based MRP systems. Consequently, many of these firms have adopted some form of kanban for shop floor control. In this paper, a planning model is developed to assist line managers in determining an optimal kanban policy at each workstation. The objective is to work within the capacity of the system to balance cost and service over the planning horizon. The model takes the form of a mixed integer linear program, and is solved with standard techniques. When no shortages are permitted, a number of alternative formulations are introduced that sharply reduce the computational burden. Results are presented for an example based on the assembly of printed wire boards at Texas Instruments' Austin plant.