ABSTRACT

The classifications of orders by the names of "kanban" (stocked), "made to order" (MTO), and "custom" help set the expectations, and there is a policy and philosophy of manufacturing behind the names to support it. Quantities ordered of the stocked, kanban part number determine whether or not it is considered to be an "limited-time offer" (LTO)—exceptionally high-order quantity of a normally stocked and shipped part number. What defines an "LTO" can be as simple as a rule that an order quantity equal to or exceeding 150 percent of a single kanban card quantity is considered an abnormal demand. Order shipment history, order shipment quantities, and order shipment intervals are keys to setting the inventory levels. The resulting inventory classifications, reflected in the end-item part numbers making up the shipment data, are agreed to by the marketing, sales, and materials departments.