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Research Paper | Management | Indonesia | Volume 7 Issue 1, January 2018 | Popularity: 6.9 / 10

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Design and Implementation of Kanban System to Reduce Finished Goods Inventory

Hasami Wakas Harahap, M. Syamsul Maarif, Yandra Arkeman

Abstract: Lean manufacturing system principles that emphasize waste elimination and Just-In-Time have created new strategies to optimize operational costs and improve manufacturing efficiency. The push system aimed at making large inventories for customers is no longer done by Japanese companies. Most of them like Toyota use a pull system by using kanban to manage manufacturing control processes based on actual market demand. As a result, they are able to reduce their inventory and shorten lead time. Large inventories can be attributed to the amount of production that is not in accordance with consumer demand and excessive production will impact on overtime production costs. This study covers pre-requisite activities in building Kanban systems, starting from designing kanban flow (value stream mapping), making heijunka, and calculating kanban population. This paper studied the design and implementation of kanban system in local auto component company in Indonesia. The scope of the implementation was focused on the rear axle assembly process or known as rear-wheel drive. This paper concludes that implementation of the kanban system minimized inventory, reduced lead time, and minimized unnecessary overtime production cost. The purpose of this study is to show that Kanban system can reduce finished goods inventory, inventory cost, and production overtime costs.

Keywords: inventory reduction, just in time, kanban system, lead time reduction.

Edition: Volume 7 Issue 1, January 2018

Pages: 1689 - 1696

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