ABSTRACT
This chapter focuses on methods to reduce raw materials, purchased parts, work-in-process and any finished goods inventory. Material requirements planning is a just-in-time tool that helps materials arrive just as they are required. It globally plans for capacity and human resources, but the users of the system tend to get nervous and typically build in extra lead time and safety stock. Kanban is a pull system rather than a push system, which is based on forecasted future needs. The minimum number of kanbans for a production batch is normally decided by the production manager; a smaller number is always better. The chapter explains how to set up internal kanban; from this point, it will describe the process of setting up supplier kanban. Kanban gives the shop floor the ability and means to schedule and saves the planning department time.
