Kanban, a lean production and inventory control method

Kanban is a Japanese word meaning billboard or signboard. It is derived from kan which means visual and ban which means card or board. In lean manufacturing, kanban is used as a means of inventory management and production control which signals that something needs to be done. In the case of raw material it notifies purchasing to seek procurement of more raw materials. In the case of a manufactured part it signals the need for production to begin. Kanban is an important part of Just in Time Manufacturing.

In a conventional push system of manufacturing, batches of product are made and put into stock. Large batches are commonly run to spread the changeover times over many parts to reduce the cost per unit. There are many disadvantages with this mentality of production. One is that money is tied up in inventory that may sit around for a long time. This inventory takes up valuable factory space that could be used for manufacturing. The longer the material is stored the more chance that the product will degrade, get lost, or become obsolete.

In a pull system of manufacturing, parts are only produced when they are needed. It is also referred to as just in time production. The amount of inventory on hand at any given time is reduced. Batch sizes are also reduced. There are many advantages to this type of system. Money can be freed up to be invested on more profitable aspects of the business. Plant space can be freed up to allow development of other work cells. Response times are generally shorter than in push systems. Mistakes are generally caught sooner resulting in less defective parts.

Now that we have a general understanding of kanban and a pull system, let’s discuss kanban's role in a pull system. Kanban plays two roles in a pull system of manufacturing. The first is in inventory control. The second is in production control. The video to the right demonstrates them both.

Kanban in the role of inventory control. After material is depleted to a predefined level, a kanban signals the purchasing professionals to start the process of procuring more of said material. In the video, purchased materials in inventory include (6) GPS units, (6) of each cabins and cockpits, and (6) each hulls and sails.

Kanban in the role of production control. After manufactured inventory is depleted to a predefined level, a kanban signals production to replenish the stock. In the video there is a work cell for each of the tasks to be done. (1) for adding sails to hulls, (1) for adding cabins and cockpits, and (1) for adding GPS. Each cell is responsible for keeping the inventory level of their subassemblies at a predefined level. In this demonstration it is (6) of each type of subassembly.

A kanban signal can present itself in many different forms. One of the most common forms is a kanban card. The possession of the card serves as a signal to replenish inventory. A kanban card is usually full of information about the part. It may include the part number, lot size, locations, container size, and much more.

Another form of kanban is the 2 bin system. In this system there are two bins for each part. One is located where the product will be used and the other in the location where the product will be made. In this system any empty bin gives the signal to start producing stock to fill the bin. Once the bin is full it will be moved into storage. When a bin is emptied it is taken to the preceding operation to be replenished and the full bin in storage is taken back to be used.

The most technically advanced for of kanban is the E-kanban. This form of kanban uses computer technology to send the kanban signal. One major advantage is the instantaneous transmittal of the signal. Another advantage is that the kanban can be for the exact amount instead of a lot size. This brings the system closer to one piece flow.

There are many different variations and types of kanban. The possibilities are endless which will allow you to tailor kanbans to fit each and every aspect of your application.

Since kanban goes hand in hand with just in time production, there benefits are similar. They include reduced inventory, smaller batch sizes, quicker response times, and less defective parts. Kanban is an integral part of lean and the Toyota production system.