Feature

A continuing lean journey: an electronic

manufacturer’s adopting of Kanban
Andrew Lee-Mortimer
Lee Business Communications Ltd, Manchester, UK

Abstract
Purpose – This paper aims to examine the introduction of Kanban production control, at a UK-based electronic product-manufacturing operation.
Design/methodology/approach – The paper covers key implementation issues, including cultural factors, the reasons behind the adoption of an
electronic Kanban system, and explains in detail the working and benefits gained from the changes introduced.
Findings – Learning lessons from its previous lean implementation experiences, the company’s adoption of Kanban was phased, and the final stage of
gradually building up the parts under the control of the electronic Kanban was combined with broad involvement, widespread training and the
addressing of cultural issues. This “pull” system has delivered the expected dramatic reductions in lead times and inventory but, having used Kanban to
gain increased internal stability, the company is now planning to extend the system externally. Interestingly, to make this work, it will require the
replacement of Kanban control in some internal areas of the plant with push control in the form of direct replenishment.
Originality/value – The paper clearly shows how effective the progressive introduction of aspects of lean can be in terms of delivering long-term
business benefits. It also confirms the importance of recognizing that even well organized businesses are liable to suffer pain when implementing lean.
It is critically important not to blame the new system, but to find the real causes, and this requires understanding and training. Finally, in addition to
explaining how the plant’s new system operates, and observing some of the finer details of the electronic Kanban system, the paper looks at the
interesting planned steps in the system’s “evolution”.

Keywords Electronics industry, Kanban, Production management, Lean production, United Kingdom

Paper type Case study

Introduction Undeterred, and with the support of the Manufacturing

Prior to embarking on its lean journey in 2005, Siemens
Standard Drive’s Congleton factory had already seen the
benefits of a highly effective continuous improvement
program. This had delivered a major culture change along
with significant OEE and quality improvements to the UK
plant, which is part of Siemens Automation & Drives and
employs 420 people in the design and manufacture of a range
of electronic drives. Its achievements had been recognized by
the winning of a host of awards.
Therefore, the initial “surprise” for Congleton’s
management when it started its new improvement offensive
was not that lean offered a way to deliver performance
improvements, but just how much potential for
lean improvement was still present within the site. A
significant insight into the major challenges still facing the
plant, and the level of “waste” and unnecessary cost still
present, was brought home to the senior management team
when it undertook a value stream mapping exercise.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0144-5154.htm
Assembly Automation
28/2 (2008) 103– 112
q Emerald Group Publishing Limited [ISSN 0144-5154]
[DOI 10.1108/01445150810863662]
Advisor Service North West, the operation started to tackle
some of the key process issues highlighted.
The products produced at Congleton are all based around
printed circuit boards (PCB), and so its main production
processes include automated surface mount lines, through-
hole assembly, PCB testing, an automated protective spray
coating process and final manual assembly. This last stage is
where boards are assembled into the end product’s metal
frame and plastic casing, tested and then packaged ready for
dispatch to the German Export Centre. The first area tackled
by the “Lean Manufacturing” initiative was PCB testing, as
this had been shown to be a real bottleneck.
Using SMED techniques, the changeovers within the test
area were radically redesigned and standardised, with the
result that the plant gained reductions in change over times,
for example, from 10 down to 1 min.
Then, having established increased flexibility and output
from the test area, the next big challenge tackled was the final
assembly areas for the plant’s core MM4 products. These
account for 80-85 per cent of production by volume.
Adopting lean techniques to redesign the final assembly area
into cells and balancing the workload within each cell,
dramatic improvements were gained. These included
reducing cell WIP from 195 trolleys to 3, improved
quality and reduced rework, productivity up well in excess
of 45 per cent, assembly lead time down to 7 min from 5 h,
and increased output.

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 A continuing lean journey
Andrew Lee-Mortimer
Overall, these changes constituted an important step
towards the plant’s ultimate goal of creating a build to order
system. Yet, the improvements did not come without facing
severe problems when the cells initially went live. (Details of
the developments are covered in the article previously
published in Assembly Automation “A lean route to
manufacturing survival.”).
In fact, as David Roberts, Congleton’s Production
Manager, reports, crucial to the ongoing success of the cells
was the slightly belated introduction of Gembi Kanri; visual
control charts and workplace management. “By getting
operators directly involved in tracking output and
performance, and ensuring both management and operators
sort problems on a daily basis – driven through morning
meetings held at each cell – the new approach to workplace
management is one of the key reasons why the cells have
become so successful.”
However, these developments have proven to be far from
the end of the plant’s lean journey. In particular, in early 2006
the management realized that although significant inroads had
been made by optimizing certain processes, so reducing some
internal processing times, removing non-value-added
activities and increasing productivity, the overall material
flow in the factory was still far from efficient. As a result, the
plant was still a long way short of delivering against overall
lead-time and flexibility improvement goals.
Therefore, another major change in practice and culture
was needed, and it was decided to adopt a Kanban production
control system.
The drive for pull
Essentially, it had become obvious that the major barrier to
further lead time and inventory reductions was the traditional
“push”-based production environment still being operated at
Congleton.
As the factory does not supply customers directly, but an
export centre based in Germany, the demand placed on it
comes from the Corporate SAP ERP system. This dictates
output, based on actual sales, forecast sales and warehouse
stock, and provides firm orders for 15 days in advance and
forecasts beyond that. From this data, Congleton’s
production planners produce a rolling four-week production
plan, with the last two weeks fixed, and, traditionally, a daily
MRP run has then determined the necessary works orders for
each work centre.
This meant that in effect, all activity in each work centre
was centred on producing in accordance with material
availability and efficiency (i.e. large batch sizes), with the
result that part processed PCB boards were constantly being
pushed through the factory, regardless of the demand from
downstream processes. This was naturally causing larger than
necessary amounts of WIP, which was often increased as a
backlog of certain boards could rapidly build up if
downstream processes could not consume them for any
reason. Also, overall lead-time was dictated by the MRP
driven work sequence and batch sizing (Figure 1).
According to Tobias Cock, Operations Graduate and head
of the Kanban project, “We needed to change this situation
and become more efficient in getting the right boards through
the plant at the right time, and in so doing reduce lead time
and WIP and improve overall productivity. This meant
encouraging a way of working that was based on internal
104
Assembly Automation
Volume 28 · Number 2 · 2008 · 103 –112
demand, and smaller batch sizes, and the best way to create
this pull of products through the factory would be via
Kanban” (Figure 2).
Other long-term drivers for the change to Kanban included:
.
the opportunity to provide more visibility and control into
production processes and to capture historical data for
trend and improvement analysis;
.
the opportunity to empower operators to make production
related decisions, such as prioritising work and create
production orders;
.
the opportunity to improve communication across work
centres by making material supply and consumption data
available to everyone;
.
the opportunity to reduce manufacturing lead time and
thereby reduce inventory both in production and at our
Export Centre in Germany (LZN);
.
the opportunity to respond faster to changing demand by
having Kanban stocks throughout the production pipeline;
and
.
the opportunity to analysis historical production data to
identify production issues such as capacity constraints,
over production and delivery failures.
But, it was also recognised that going from push to pull would
be a big culture change, challenging well established
procedures. There was also the considerable tangible risk
involved with this move, of losing production and missing
output targets. The problem had been highlighted by the final
assembly cell implementation, but in this case the whole
factory could grind to a halt if the system did not work as
anticipated. Fortunately, these concerns were partly offset by
the greater level of understanding of lean throughout the
company, and, critically, the level of senior management
support for the change.
Testing the water
Taking into account the risks involved with the introduction of
Kanban, the first practical step taken by the plant was the
development of simulations to see how the factory might
operate with Kanban controlling production.
As Tobias Cock reports, using the site’s reporting system
(COBRA) daily production data was extracted for all of the
high-volume products over the previous 12 months. This
information was used to calculate standard deviation in
demand for each product group and to estimate the volume of
products that were qualified for being included in a Kanban
system.
In addition assumptions were made that:
.
demand variability will be reduced by 50 per cent because
planners are allowed to plan in smaller batch sizes;
.
work centres will on average use half a day to respond to
down stream demand; and
.
the acceptable risk for material stock-out for any given
item is 0.5 per cent.
From this, a Kanban simulation was developed to estimate
inventory and expected lead-time reduction for qualified
Kanban items.
The simulations showed that with the factory already
arranged in terms of flow, a full Kanban implementation was
not only feasible but could also generate significant
improvements (Figure 3).
 A continuing lean journey Assembly Automation
Andrew Lee-Mortimer Volume 28 · Number 2 · 2008 · 103 –112

Figure 1 Traditional push manufacturing at Siemens Standard Drives Congleton

Before

Procurement MRP Planning

A&D Export
Suppliers S5 A6 F7 A10 K1
Centre

Lead time 4 - 5 days

Additional key

S5 - Surface mount
A5 - Through-hole board assembly
F7 - PCB testing
A10 - PCB coating
K1 - Final Assembly

Figure 2 Reducing batch sizes delivers reduced WIP

WIP levels highly reflect the

Before After amount of variability in
production batch sizes. By
encouraging planners to plan
orders according to demand
Batch sizes

Batch sizes

WIP and not based on optimum

batch sizes a significant
WIP reduction in inventory has
been achieved with the aid
of the Kanban
Days Days

Figure 3 Estimated reduction in inventory from the introduction of Kanban

600.0
Average Inventory
500.0 (using SAP with 4
days lead-time)
400.0 Average Inventory
(using the Kanban
300.0 system)

Total estimated inventory

200.0
reduction 37.48%
100.0 (See Appendix A for the
complete calculation)
0.0
1790L820A
1790L825A
1790L830A
1790L837A
1790M827
A5E00138091
1790L848A
1790L849A
1790L851A
1790L854A
1790L855A
1790L856A
1790L858A
1790L871A
1790L875A
1790L876A
1790M844
A5E00137379
A5E00137380
1790L868A
1790L869A
1790L888A
1790L889A
1790L944
1790L945A
1790L946
1790L947A
1790L948A
1790M864
1790M865
A5E00140080
1790M845

Based on this the plant took the first implementation steps in
February 2006. Again, to reduce risk and see in practice how
the process would work in the factory, this consisted of the
introduction of a simplified manual card-based system that
only controlled the largest volume board produced.
As Tobias Cock notes, “One of the key aspects of this trial,
which lasted several months, was to see if the Kanban system
could be operated effectively in combination with the ERP
system. This was vital because, although the intention was to
introduce Kanban control throughout the factory, there was
nothing at that stage that Congleton could do about the
Corporate ERP system still dictating the order demand being
placed on final assembly.”
Therefore, the trial system was based on employing the
production plan to stipulate when final assembly would
produce the required products (instead of the ideal of a pull
from the warehouse). The Kanban system then controlled the
internal production of the boards within the trial. This meant
that as soon as final assembly consumed a certain number of
boards in its Kanban stock, a signal – the Kanban card with

105
 A continuing lean journey
Andrew Lee-Mortimer
the replacement quantity – was sent to the preceding work
centre to request re-supply, with subsequent triggers pulling
new boards through the whole production processes
(Figure 4).
This trial not only confirmed that the combined control
process was feasible, but it also provided good insight into
potential benefits of improved flow and reduced WIP that
could be generated by a larger scale Kanban system. It also
proved to be a fundamental tool in starting to change the
culture within the plant (Figure 5).
However, it also highlighted a potentially big problem. The
large variation in demand for the operation’s products, which
was not helped by final production being driven by ERP,
resulted in the constant need to change the Kanban
thresholds (the size of the Kanban stock held at each centre
and replenishment request). With an enlarged paper-based
system this would require considerable effort, with someone
physically having to produce and introduce new Kanban cards
on a regular basis for all products being controlled by
Kanban. It was recognised that this could become a major
headache, and not only in terms of changing the cards but
also the need to keep each work centre informed of all the
changes.
The solution chosen to overcome this constraint, while also
being considered a more realistic option for the long-term,
was the development and adoption of an automated,
computer-based Kanban system. Two further factors helped
in determining this route forward. First, a key advantage that
Congleton had, as regards going for an electronic system, was
that it had a board bar coding and scanning infrastructure in
place on which to build the system. Every item was already
Figure 4 The key differences in control methodology between push and pull manufacturing at Siemens Standard Drives Congleton
Before
Procurement
Suppliers S5 A6
Lead time 4 - 5 days
After
Procurement
Suppliers S5 A6
Lead time 2 - 3 days
Information
Materials / Products
Additional key
S5 - Surface mount
A5 - Through-hole board assembly
F7 - PCB testing
A10 - PCB coating
K1 - Final Assembly
Assembly Automation
Volume 28 · Number 2 · 2008 · 103 –112
being scanned at each work centre for transactional purposes.
Secondly, it had an IT department who were capable of
producing the system in-house.
Full implementation
By August 2006, a small team of people from Congleton’s
operations and IT had not only created a functional electronic
Kanban system, but it also had been made available site wide.
This implementation not only replaced the card-based
system, but also significantly expanded the number of
boards under Kanban control to cover the majority of items
needed for its core MM4 product range.
According to Tobias Cock, as with the manual approach the
basic premise of the electronic Kanban system, which is now
fully operational, is that it runs in parallel with the ERP
system. A production plan continues to determine output
from final assembly, with MRP still operating in the
background for the whole plant by producing work orders,
and managing material procurement. However, now the
Kanban system – with Kanban controls introduced between
each work centre – drives what and how many of each item
(the Kanban threshold), a work centre produces against the
works order at any one time (Figure 6).
For instance, the overall works order covering the next
week’s production may be for 150 boards of a particular type.
But production of the board will not start until signalled by
the Kanban system, and the amount produced in any one
batch is stipulated by the threshold (say 30). The rest of
the “order” remains unmade until subsequent Kanban
signals have been received. The result as anticipated is that
MRP Planning
A&D Export
F7 A10 K1
Centre
Planning
A&D Export
F7 A10 K1
Centre
106
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Andrew Lee-Mortimer Volume 28 · Number 2 · 2008 · 103 –112

Figure 5 Representation of the manual card-based Kanban trial

1790L800ASM
Total No Number Number Number
Kanban of Red of Yellow of Green
Tickets Tickets Tickets Tickets
Surface Mount (S6)
10 5.8 2.1 2.1

1 Transaction

Lead time: 2.24

CARD Deviation: 1.77
Batch Size: 100
CARD

Conventional Build (A9)

2 Transaction

CARD Lead time: 0.75

Lead time: 1.61
Deviation: 0.44
Deviation: 0.56
Batch Size: 40
Batch Size: 40

3 Transaction Lead time: 0.88

Deviation: 0.52 4 Transaction
CARD Batch Size: 40
PCB Test (F7) Coating (A10)

CARD
1790L800A
Total No Number Number Number
Kanban of Red of Yellow of Green
Tickets Tickets Tickets Tickets CARD
36.6 23.2 6.7 6.7

6 Transaction Lead time: 0.5

Deviation: 0.3
Batch Size: 40 5 Transaction
Mechanical Assembly CARD Options (K2)
(K1)

1790L811A
CARD
Total No Number Number Number
Kanban of Red of Yellow of Green
Tickets Tickets Tickets Tickets

14.7 7.3 3.7 3.7

production is undertaken in much smaller batches, and if final
assembly – for whatever reason is in backlog for one product
for two days – there is not two days worth of high-added
value boards in WIP.
With the electronic system, the signals for processing are
conveyed to each work centre via digital Kanban displays.
Through these, any work centre can see exactly what it needs
to be working on. The information is updated automatically
as each board is scanned and the activity undertaken recorded
at every work centre.
The display is primarily in the form of a gauge for each
board variant, item, with a dial that moves between green,
yellow and red zones (Figure 7). If in the green, there is no
need to produce anymore at present. If yellow, this shows that
there is likely to be demand to replenish the downstream
Kanban soon. If the gauge is in the red, then the work centre
needs to produce some of these straight away to avoid
stopping downstream production.
The display box below the dial also clearly shows:
.
Stock. This is how many boards are left between it and the
next work centre. For instance, this could be 14, and the
reason why the dial could be in the red, even though 14
boards are still in stock, is that the dial takes into account
the set up time required to start building new boards of
this type.

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Andrew Lee-Mortimer Volume 28 · Number 2 · 2008 · 103 –112

Figure 6 The key principles of the electronic Kanban control system introduced in August 2006

Current Replenishment Procedure

Kanban Replenishment Kanban Replenishment
Week 4 Week 3 Week 2 Week 1
Production Plan

Open Open Closed Closed S5 A6 F7 A10 K1

Total Respond Time (15 business days)

German Export Centre
Additional key

S5 - Surface mount
A5 - Through-hole board assembly
F7 - PCB testing
A10 - PCB coating
K1 - Final Assembly

Figure 7 Examples of the electronic Kanban displays
(The Kanban Display available to
operators on the shop-floor)
A “Unit Consumption” signal is automatically triggered
when the next work centre starts consuming its stock of the
board. This is another key indicator to help group leaders
make decisions on build sequence. For example, the dials for
two items might be in the orange zone, but only one might be
being consumed by the next centre – hence highlighting the
more important one to work on.
“A typical situation for any work centre is that 30% of the
dials will be in red, 30% in orange and 40% in Green,” says
Tobias Cock. He adds, “Obviously with this sort of balance,
not all decisions on build sequence are clear cut, and often all
the information available to Group Leaders has to be taken
into account to make some priority and build quantity
judgements. To help make this decision making easier, the
system is constantly being reviewed; and the latest addition is
to provide all work centres with filtered information and
simplified charts that will help clarify the situation about every
item across the factory.”

.
Batch size. This is the number of items needed to get the
item’s Kanban threshold up to maximum in the green.
The work centre is not allowed to build more than the
stated batch size as this would entail wasting resources on
boards that are not going to be needed at present, and
taking away resources from other boards that probably
need more being produced (i.e. also in red or in yellow
state). However, the group leader can decide to build less
than the batch size stated, in order to get some stock,
(and get the dial into yellow) but may then transfer onto
another board which is also critical.
A “Build in Progress” signal shows if that board is being
produced. This is more of an indicator for production control.
It shows if work centres are responding to the dials
appropriately. For instance, if they see some items in red
across the factory, and no build in progress for it at any work
centre then they can react to this situation.
Implementation challenges
In implementing this full, electronic, system Congleton faced
a number of process, technical and people related challenges.
As Tobias Cock observes, one of the key process issues was
determining the actual lead times between work centres,
including response time to a demand signal, and then
calculating the size of the Kanban thresholds for each item.
Some work centres have as many as 40 different board
variations, and if a large number of these go into the red then
they cannot respond to all at the same time. Therefore, to
reduce the risks the system started with quite large thresholds
– in many cases larger than needed in theory. These “safety
levels” have then been gradually fine tuned and typically
reduced as the process has become more stable and
confidence in the approach has increased
He claims, “We decided that it was far more important to
initially get the system operating successfully, and not risk it
falling over because of trying to take out too much inventory
in one go. This approach was made far easier by the adoption
of an electronic system.”
The electronic system also means that the Kanban
thresholds can be constantly monitored and changed to

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 A continuing lean journey
Andrew Lee-Mortimer
reflect anticipated changes in demand. For instance, by
looking ahead at future demand forecasts and recognising that
demand for some products is historically always different in
December as opposed to July, then gradual changes
in thresholds can help smooth out these changes in
requirements.
Another major issue was deciding how to manage the
surface mount area, which is where the company has most
capital tied up.
It was important to ensure that production in this area,
which is at the beginning of the process, was not dictated just
by efficiency, and was still focused on responding to the
demand mix of actual production, and not a forecast plan.
However, it was also recognised that significant reductions in
batch size and increased changeovers could have had serious
efficiency impact. Therefore, it was decided that it would be
controlled by the Kanban system, but that to balance demand
and efficiency needs, it would operate with a “healthy”
Kanban threshold. This decision was helped by the fact that
many of the boards produced at surface mount are consumed
by a number of different sub assemblies. In addition, the
boards at this point boards have limited added value and are
easy to store.
The decision to develop the system in-house offered a way
to avoid the big bang deployment of a full-scale system, which
can often require a significant amount of capital investment,
and outside resources, from the outset. But it also posed some
challenges. However, the plant’s IT operation proved more
than willing and capable, and by developing the system in
stages – adding features that were seen as needed or useful –
no major problems were encountered.
“We started with a relatively simple system, just 30% of
features now available, and this has been built up over the past
year, as we have better understood the dynamics of the
process in operation, and the requirements of those using it,”
says Tobias Cock.
Naturally, the prospect of moving people away from the safe
practices and behaviours associated with a long established,
and working, push system, to the relatively unknown and
untried pull system techniques raised some cultural concerns.
For instance, production controllers, who were in effect losing
some responsibility and control to the shop floor, might have
been less than enthusiastic. But according to Tobias Cock,
this has been far from the reality, and in fact the production
controllers have proven, to be very supportive in working with
group leaders to determine and manage how best to meet
Kanban demands and improve flow.
The increased responsibility and ownership placed on the
group leaders, who now must focus on reacting and
responding to their customer and not just building to
forecast plan, has taken longer for some to adjust to than
others. But, overall the transition has gone well, with the key
to this, and the refocusing of all operators, being the amount
and length of training undertaken, the broader involvement of
all concerned in the system development, and the setting up
of support mechanisms.
Fortunately, as most of the workforce had already been
through some lean training, the concept and basic principles,
and reasons for Kanban, were not new. Although this was an
advantage, as it overcame some of the normal initial
reluctance to new ideas, it was still recognised as critical to
effectively train people in the specifics of the new system. This
was a lesson learnt from the earlier cell introduction when
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Assembly Automation
Volume 28 · Number 2 · 2008 · 103 –112
wrong assumptions were made about the level of
understanding of how the new cells would operate in practice.
For the Kanban system, several training sessions and a half-
day workshop were arranged for everybody involved with the
new system to ensure they were correctly trained and that any
concerns or questions were specifically addressed. A Kanban
operating manual was also produced and made available to all
operators and group leaders using the Kanban.
Finally, there are always some problems when new
approaches are introduced, and the tendency is for the
changes to be blamed. This is what happened previously with
the introduction of the cells, and again there were some
instances of this with the implementation of Kanban.
However, states Tobias Cock, “This time there has also
been a greater awareness that any problems are far more likely
to be the result of the new system highlighting long standing
issues, and this has resulted in less ‘blame’ and faster remedial
action. For example, while some work centres have found it
more difficult than others to stay within the Kanban
thresholds, this has generally been quickly recognised as
problems related to the nature of their process, which have
needed modifying, not the introduction of Kanban.”
Part of this different attitude is due to a greater understanding
of what change entails, from senior management downwards.
But it has also been helped by focused support mechanisms.
In this case, in order to effectively record and review
Kanban related issues, a SharePoint site was introduced and
is available for everyone to report problems relating to
overproduction, stock-outs and response time failures.
The site is reviewed by the Kanban coordinator on a daily
basis and actions prepared accordingly (Figure 8).
Further, to record improvements and to identify trends and
problems within production all historical Kanban data is
collected by Congleton’s reporting system (COBRA). A
number of reports now available to help continuous
improvement efforts include inventory performance,
production lead time, production response time and
Kanban replenishment performance (Figure 9).
As David Roberts adds, “With the introduction of the
Kanban, we have now more data available to better
understand the constraints and challenges in production
that were previously hidden by excess inventory and lead
times. Through our Kanban reporting system we can now
easily identify trends and problems in production and prepare
actions accordingly. Additionally the Kanban screens provide
us with valuable real time information on how each individual
work centre are performing, enabling us to be more proactive
to capacity shortages or backlogs, thereby reducing the risk of
delivery failures.”
Figure 8 The sharepoint site for recording Kanban-related issues
(SharePoint site for recording kanban related Issues)
 A continuing lean journey Assembly Automation
Andrew Lee-Mortimer Volume 28 · Number 2 · 2008 · 103 –112

Figure 9 Kanban reporting tools

1,100

1,000

900

800

700
Stock Level KPI
600 Ok
Prepere
500
Build Now
400

300

200 (Kanban
100 reporting tools)
0

900
800
700
600 Stock Level KPI
500 Prepere
400 Build Now
Ok
300
200
100
0
Dec-06 Dec-06 Dec-06
1790L800A A5E00142029 A5E00203785

Key results entering surface mount right through to final assembly, as

Since, the introduction in August 2006, the Kanban system
has been expanded to include 78 per cent of the boards used by
the MM4 product range; a range that represents 80 per cent
of all production at Congleton. Moreover, as well as mastering
the new system, its performance is now being tracked and
measured on the balanced scorecard used to monitor the whole
operation’s performance. One key Kanban measure is the
number of times that a work centre hits zero stock for any item;
with most regularly meeting the present performance target of
only hitting zero once per item per month. Another important
measure is over-production, which is monitored to help
determine how well each work centre is managing the system.
Overall, the Kanban system has delivered numerous
improvements within different business areas, where the
most noticeable and measurable relate to inventory and lead-
time reduction.
For instance, the average lead time of all the work centres
has been reduced from 180 to 60 h – with the biggest
reductions coming through since January 07 when the highest
running power boards came under Kanban control
(Figure 10). This is not the average lead-time per product
as not every product goes through all the work centres
Although as David Roberts states, “We have measured
some PCBs going through the factory in just six hours, from
opposed to the 4 days planned by the old push method.
This indicates that our vision of move to build to order is
increasingly realistic.”
Also, above predictions, the reduction in inventory has come
down in proportion with lead time, with a 70 per cent WIP
reduction in whole the process since introduction of Kanban.
It is also recognised that the Kanban system is providing as
yet unmeasured benefits. These include:
.
Reduced overproduction that ensures resources are used
more efficiently and board obsolescence reduced.
.
With reduced inventory in the pipeline the cost of quality
failures are being kept to a minimum.
.
Fewer and more quickly resolved interruptions to the flow
along with reduced waiting times means that the Kanban
has enabled an increase in production using the same
resources.
.
The Kanban system makes capacity constraints and
availability very visible and enables group leaders to move
operators from areas with excess capacity to areas with
capacity shortage. This ensures that they can utilise the
“variable hours scheme” employed at the factory more
effectively.
.
As well as reducing waste internally, the Kanban has
equipped the factory with an increasingly stable production

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 A continuing lean journey
Andrew Lee-Mortimer
Figure 10 The reduction in average lead time through all process work centres
Average lead-time per work centre for all Kanban items
Hours
180
Post-kanban
160
140
120
100
80
60
40
20
0
Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07
Month in 2007
system that will enable it to approach upstream and
downstream supply chains to remove additional waste
through the use of external Kanban systems.
Beyond Kanban
In fact it is this last benefit that has driven the site onwards
with the development of its next major lean step forward; the
extension of Kanban control, over the next year, through to
the LZN.
Tobias Cock explains, “We realise that what has been
implemented so far is only part of the overall solution. The
Kanban to date has undoubtedly helped us reduce lead-time
and inventory within the factory. But to gain the real benefits
of ‘pull production’ especially in terms of improved customer
service, we must have a direct Kanban link with the LZN, so
that final assembly becomes driven by a ‘pull’ from the
warehouse, rather than pushing stock in.”
This is because at present the operation is still susceptible to
the typical problems of using forecast demand to plan final
production 15 days in advance of delivery. The system shows
that stocks of certain items are down and with planned sales
these need to be replenished. So these are put into the build
plan, only to find that the sales do not come through as
anticipated and there is an overstock. Whilst, other items that
had healthy stock levels, and so no production in the plan,
suddenly see a couple of major orders that leave the LZN with
no stocks and with no immediate plan to replenish them.
Therefore, one element of the planned future changes is the
removal of the ERP driven production plan, and its
replacement with live stock data from the LZN. When
combined with known stocks in transit and finish goods at
Congleton, this data will provide a total warehouse inventory,
which will then be used by the Kanban system to create
a direct pull demand on Congleton’s final assembly from
the LZN.
“Essentially we are looking to create a situation whereby the
Kanban system will drive final assembly to produce today the
mix and volumes needed to replenish what was consumed
from the export centre yesterday, says Tobias Cock.
He continues, “Therefore, we will have a one day response
time to what is happening in the warehouse – and a total lead
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Assembly Automation
Volume 28 · Number 2 · 2008 · 103 –112
A10-Coating
F7 - Teradyne Spectrum
A9 - Selective Solding
A6 - STREKFUSS
A5 - SEHO
B3 - Pre-Assembely
S6 - Surface Mount Si Place
S5 - Surface Mount
S3 - Surface Mount Si-Place
time of three business days which includes transportation.
This is instead of the present 15-day lead-time. So as well as
further reducing inventory across the whole delivery process,
this new system will generate improved delivery
performance.”
However, to make this work is far from straight forward.
Firstly, there is still the problem that demand on the LZN is
highly variable. Therefore, overall “unconstrained” demand
on final assembly could be greater than factory capacity, and
so production would have to be managed to continue
producing into subsequent days to bring the dials into
“Green” while trying not to heavily impact the next days
demand. Alternatively, demand may be much lower than
capacity and in these cases production would again have to be
managed, but this time to over produce to agreed limits, such
as 20 per cent above threshold.
By far the bigger issue is that to make this approach work
will require further changes to Congleton’s own process flow,
and more specifically will mean that parts of the recently
introduced Kanban system will be replaced.
Explaining the anticipated new process, Tobias Cock
reports that to support the pull driven final assembly, a
relatively large buffer inventory of completed boards will be
introduced in front of final assembly. This will ensure the cells
are in a position to immediately start building any product
pulled by a Kanban signal, and continue building while new
boards are being processed upstream and delivered to
replenish the buffer, before it runs out.
The key to this is that the lead time for processing new
boards through board assembly, testing and coating will have
to be sorter than the time it takes for final assembly to
consume the buffer. Unfortunately, at present this would not
be possible mainly because of the stock levels and existing
lead-time within the factory, which is dictated by the Kanban.
Therefore, the intention is to remove the internal Kanbans
that now operate between these three processes and introduce
direct replenishment (Figure 11). This should give much
faster throughput within the factory.
In effect, as soon as final assembly (K1) starts consuming
boards, information on what is being produced and build
quantity will be relayed to board assembly (A6), which will
then start producing the necessary replacement boards;
 A continuing lean journey Assembly Automation
Andrew Lee-Mortimer Volume 28 · Number 2 · 2008 · 103 –112

Figure 11 Comparing Kanban control system with that envisaged for adoption in the near future
Current Replenishment Procedure

Kanban Replenishment Kanban Replenishment

Week 4 Week 3 Week 2 Week 1
Production Plan

Open Open Closed Closed S5 A6 F7 A10 K1

Total Respond Time (15 business days)

German Export Centre

Suggested Planning Procedure

Kanban Replenishment Kanban Replenishment

S5 A6 F7 A10 K1
Inventory Inventory Total Respond Time (3 business days)

Information Flow German Export Centre

Product Flow
Electronic Direct
Replenishment List
Additional key

S5 - Surface mount
A5 - Through-hole board assembly
F7 - PCB testing
A10 - PCB coating
K1 - Final Assembly

“pushing these through subsequent operations as fast as
possible up to the final assembly buffer”.
To ensure the internal lead time can be reduced to that
needed to enable continuity of operation, issues such as work
balance and capacity alignment are likely to be tackled
through the introduction of dedicated testers and a two stage
board assembly, with two operators building the same PCB.
Fortunately, the coating process is highly automated and
extremely flexible, and can work on any board without any
mechanical set up changes.
Finally, while the surface mount lines will continue to be
driven by a Kanban from board assembly, another change
needed to make this new system work will be a larger buffer
stock between the two operations. This stock may be higher
than the present Kanban threshold stock, but this increase is
more than compensated for by the elimination in any stocks
between the subsequent operations.
The overall result is an interesting production control
approach, with the newly introduced pull mechanism, in the
form of Kanban, being combined with the re-introduction of
push mechanism in the form of direct replenishment.
However, as Tobias Cock notes, this should not be such a
big surprise.
“All the theory and research suggests that the full evolution of
a Kanban system should actually result in its removal. Kanban is
not necessary the most efficient approach, but what it
does enable is for a company to get control of its production
process and create stability. In turn, this stability enables the
gradual reduction of lead times and stocks, and the tackling of
issues and variables that can cause instability (the icebergs
typically hidden by high WIP levels). However, once stability is
achieved, in theory the next improvement step is to move on
from Kanban and back to some form of push. Now this is not
easy to comprehend, or achieve, but in developing our new
intended process we believe we are moving forward by
eliminating the Kanban in certain areas.”
He concludes, “We have already done simulations that
show that the new system should work, but there is still a long
way to convert theory into practice.”
Ends
Corresponding author
Andrew Lee-Mortimer can be contacted at: andrew@
lee-mortimer.prestel.co.uk

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