Why E-Kanban is Replacing ROP (Reorder Level Planning)

ROP Planning

Man stock recording

Many of the ERP Systems use MRP based planning. One of the most popular method of planning is Re-Order Level planning also called ROP Planning.

In this method, for each item, a minimum stock level will be set in the system. When the actual on hand inventory reaches this minimum level, or goes below this level, this item will be marked as ready to order. Next time when MRP runs, a purchase order will be generated. This is an automated mechanism to ensure there is always adequate quantity available.

When ROP Fails

Re-Order level planning is heavily dependent on the system on hand quantity being up to date and correct. But in real life, most of the times, system quantity will not match the actual physical quantity. It needs discipline to issue or receive material only after doing the transaction in the system. But most of the times, physical material receipt or issue will be done first and data entry into system will be done much later in batch mode. We have seen in many companies that transactions are noted down in the paper first and then entered into system much later.
This is where ROP will fail

Visual Signal is the winner

Unlike ROP Planning, Kanban is not dependent on the system quantity. Here it is based on the actual visual prompt. When the supervisor in the shop floor sees that the container or bin is empty, he will trigger the signal for replenishment. He need not check what is the system quantity. The very fact that the bin is empty is the signal to start the re order process.

Traditional Kanban Vs Electronic Kanban (E-Kanban)

In traditional Kanban, manual processing of replenishment signal is done. In the above example, the supervisor is supposed to put a red tag on the empty bin. The store’s manager walks around the shop floor once or twice in a day and notes down all the bins that have the red card. He need to note down the part number and the bin size. After recording all the empty bins, he goes back to his desk to create purchase orders for the empty bins and sends the orders to supplier by email or snails mail. This process is also very inefficient and defeats the purpose of Kanban. This is where electronic Kanban comes into play

Mobile Apps and e-mail are the modern way of Kanban

In the modern way of doing things, each bin has a Kanban card that has the barcode. When the supervisor notices the bin is empty, he takes out his mobile phone and scans the barcode on the card using the mobile app. This will trigger the signal to the supplier by email. Supplier ships the bin immediately.

This process removes the lag in the system and communication is instantaneous and efficient Supplier ship Kanban card

TPSynergy’s E-Kanban system

TPSynergy(www.tpsynergy.com) is one such app that provides both mobile app and a cloud based solution to manage the electronic kanban process. Each item can be coded with a bar code and scanned with the mobile app. The card goes through the life cycle of New-> In Process -> Full. It is possible to adjust the size of the Kanban cards according to the demand.

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