The aim of this paper is to propose the Flexible Lot Size (FLS) for Kanban System as solution for incoming material overflow problem at Compound/Kitting section in the hard disc assembly company. The FLS is used to synchronise the material flows between Warehouse and Module section (hard disc assembly lines) where the Compound/Kitting section is the intermediate station for the incoming materials supplied by the Warehouse. Value Stream Mapping (VSM) tool was applied to identify the nature of incoming material overflow at Compound/Kitting section and its implication to the performance of the subsequent production process. The daily changes of demand pattern were analysed based on three categories of demand volume; (i) low demand, (ii) medium demand, and (iii) high demand. The model of FLS is developed using Pro-Model based on current production system and Kanban system. The FLS is proposed based on the optimisation results through the three categories of demand volume. This paper proves that VSM tool is an effective tool for mapping production wastes in current production system. For the case of demand uncertainty, the FLS for Kanban system can be used to generate the optimum number of Kanban and lot size. Thus, the FLS for Kanban system can provide smooth production flow between Warehouse, Compound/Kitting section and Assembly line section which are the common sections in the hard disc assembly company. In short, the proposed FLS for Kanban system is capable to minimize the overflow of incoming materials at Compound/Kitting section.
