A single-stage supply chain system controlled by kanban under just-in-time philosophy

The production system using kanban was pioneered by Toyota Motor Company in Japan and subsequently it was adopted by numerous other Japanese and US companies for applying the just-in-time manufacturing principles. This research studies a single-stage supply chain system that is controlled by kanban mechanism. The supply chain system is modelled as a mixed-integer nonlinear programming (MINLP) problem. It is solved optimally by branch-and-bound method to determine the number of kanbans, batch size, number of batches, and the total quantity over one period. Meanwhile, the kanban operation between two adjacent plants is worked out considering the factors of loading and unloading time, and transport time. Coupled with plant-wide efforts for cost control and management commitment to enhance other measures of performance, a logistics system for controlling the production as well as the supply chain system is developed, which results in minimizing the total cost of the supply chain system. The results show that the improvements in reduction of inventory, wasted labour, and customer service in a supply chain are accomplished through the kanban mechanism.