POTENTIAL OF KANBAN IN THE MANUFACTURING PROCESSES OF CUSTOMIZED PRODUCTS

Abstract

The thesis is researching the advantages and disadvantages a Kanban system implementation might cause to the material management processes of a manufacturing facility and define the theoretical and/or practical reasons behind these results. On an empirical level the research question is analyzed by participating to a Kanban implementation project at the ABB, Motors and Generator’s business unit in Vaasa. Another research problem is to define the possibilities of improving the Kanban system with Radio Frequency Identification (RFID) technology. Since the company utilizes an Enterprise Resource Planning (ERP) system, its functionalities are also considered during the whole study. Research strategy is to collect the data by utilizing academic articles, publications, case studies and material obtained during the employment at the case company and the Kanban implementation project. Research methods are a combination between structural, qualitative, and quantitative approaches.

The key findings of the study are concluding that all the resources were complimenting the Kanban system as a part of operations and inventory reduction, and RFID technology enables the enhancement of the Kanban system currently being implemented. The company’s ERP system is able to perform automatic Kanban calculations in order to define parameters for improved production control. These calculations can also be done without the system and appropriate mathematical formulas are introduced and utilized. The Kanban system is not a magical solution for all the problems related to manufacturing customized products, but with a pull system and the Lean concept, it offers a significant improvement for the production operations and inventory management.