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The IUP Journal of Operations Management :
Implementation of Replenishment System Using Kanban as a Tool
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In almost all manufacturing companies, materials need to be stored or buffered, implying that manufacturing companies need effective replenishment methods. However, this is challenging, since companies must balance inventory costs and customer service in complex and different situations. Therefore, it is important to choose replenishment methods carefully. One well-known and widespread method is Material Requirements Planning (MRP). But the method has problems, such as the one regarding volume flexibility. Hence, the purpose of the present study is to analyze the application of visually-oriented replenishment methods in manufacturing industry and further to design a tentative decision tool for selecting methods.

 
 

Following the remarkable success of the Toyota production system, a lot of companies have begun to adopt and apply lean principles to their organization. Lean principles are used to preserve value while eliminating the amount of waste which ranges from time, defects, inventory, work in progress and overproduction. Nowadays, lean principles are not only limited to manufacturing, they have been applied to other industries such as finance, retailing, distribution and healthcare centers.

Rapsri Engineering Products Company Private Limited is one of the largest copper alloy manufacturing organizations in India that has been applying lean principles across its organization for more than five years. The purchasing and production planning departments are working together to implement the replenishment system using kanban tool so that the material storage department does not run out of stock of continuous casting machine items or consumables when the machine is running. So in order to come up with a solution, the purchasing department decided to implement the kanban replenishment system. The kanban replenishment system will allow the company to have a pull replenishment system and a visual method for automating stock replenishment. The kanban system was developed, tested and improved in case of continuous casting items and if positive results are obtained, the kanban system would be implemented to the other items or raw materials.

 
 

Operations Management Journal,Manufacturing companies,Effective replenishment methods,Material Requirements Planning (MRP).