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6 Other Material Replenishment Signals

Welcome to Lesson 6, on the subject of Additional Signals. In the previous lesson we focused on the Kanban method exclusively. In this lesson we will expand on the various signaling methods in use in a Lean Material Management system, and provide guidance on when to use them.

In this lesson we will cover five different methods for signaling and delivering materials to the various Points of Use. Your job as a Material Flow specialist is to know these methods well, in addition to the basic Kanban methodology, and select the best method given the nature of the items being managed.  Here is a quick summary of these five methods:

1.  MRP Push. This is “classic” MRP, system generated and managed. Materials are managed based on system calculated demand, lead times, and a Master Schedule. High inventory accuracy is essential.

2.  Sequenced delivery. Items are delivered based on a production line-up, in the order of consumption at the Point of Use. This method is typical for large items like engines, cabs or axles.

3.  Consignment. In this method the materials are consigned by the supplier, and paid for based on an agreed milestone (often consumption). Consignment will be combined with other signaling methods.

4.  Kitting. Parts are grouped and delivered as a set to the Point of Use, but the grouping may be done via a list or a kit tray.

5.  Vendor Managed Inventory is material that is not only normally consigned, but the supplier also takes responsibility for replenishing the material.