System dynamics modelling of fixed and dynamic Kanban controlled production systems: a supply chain perspective

Abstract

Purpose Pull production systems have received much attention in the supply chain management environment. The number of Kanbans is a key decision variable in the pull production system as it affects the finished goods inventory (FGI) and backorders of the system. The purpose of this study is to compare the performance of the fixed and dynamic Kanban systems in terms of operational metrics (FGI and backorders) under the demand uncertainty. Design/methodology/approach In this paper, the system dynamics (SD) approach was used to model the performance of fixed and dynamic Kanban based production systems. SD approach has enabled the feedback mechanism and is an appropriate tool to incorporate the dynamic control during the simulation. Initially, a simple Kanban based production system was developed and then compared the performance of production systems with fixed and dynamic controlled Kanbans at the various demand scenarios. Findings From the present study, it is observed that the dynamic Kanban system has advantages over the fixed Kanban system and also observed that the variation in the backorders with respect to the demand uncertainty under the dynamic Kanban system is negligible. Research limitations/implications In a just-in-time production system, the number of Kanbans is a key decision variable. The number of Kanbans is mainly depended on the demand, cycle time, safety stock factor (SSF) and container size. However, this study considered only demand uncertainty to compare the fixed and dynamic Kanban systems. This paper further recommends researchers to consider other control variables which may influence the number of Kanbans such as cycle time, SSF and container size. Originality/value This study will be useful to decision-makers and production managers in the selection of the Kanban systems in uncertain demand applications.