Kanban


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Kanban - short version

Is a Japanese scheduling system. A small sign or signboard, an instruction to produce or supply something; usually a card; usually includes supplier and customer names, and information on transportation and storage; a central element of the just-in-time system. There are two types: production and withdrawal kanbans.



Kanban - long version

Kanban (in kanji 看板 also in katakana カンバン, where kan, 看 / カン, means "visual," and ban, 板 / バン, means "card" or "board") is a concept related to lean and just-in-time (JIT) production. The Japanese word kanban (pronounced [kambaɴ]) is a common term meaning "signboard" or "billboard". According to Taiichi Ohno, the man credited with developing JIT, kanban is a means through which JIT is achieved.

Kanban is a signaling system to trigger action. As its name suggests, kanban historically uses cards to signal the need for an item. However, other devices such as plastic markers (kanban squares) or balls (often golf balls) or an empty part-transport trolley or floor location can also be used to trigger the movement, production, or supply of a unit in a factory.

It was out of a need to maintain the level of improvements that the kanban system was devised by Toyota. Kanban became an effective tool to support the running of the production system as a whole. In addition, it proved to be an excellent way for promoting improvements because reducing the number of kanban in circulation highlighted problem areas.

Origins

The term kanban describes an embellished wooden or metal sign which has often been reduced to become a trade mark or seal. Since the 17th century, this expression in the Japanese mercantile system has been as important to the merchants of Japan as military banners have been to the samurai. Visual puns, calligraphy and ingenious shapes — or kanban — define the trade and class of a business or tradesman. Often produced within rigid Confucian restrictions on size and color, the signs and seals are masterpieces of logo and symbol design. For example, sumo wrestlers, a symbol of strength, may be used as kanban on a pharmacy's sign to advertise a treatment for anemia.

In the late 1940s, Toyota was studying supermarkets with a view to applying some of their management techniques to their work. This interest came about because in a supermarket the customer can get what is needed at the time needed in the amount needed. The supermarket only stocks what it believes it will sell and the customers only take what they need because future supply is assured. This led Toyota to view earlier processes, to that in focus, as a kind of store. The process goes to this store to get its needed components and the store then replenishes those components. It is the rate of this replenishment, which is controlled by kanban that gives the permission to produce. In 1953, Toyota applied this logic in their main plant machine shop.

Operation

An important determinant of the success of production scheduling based on "pushing" the demand is the quality of the demand forecast which can receive such "push". Kanban, by contrast, is part of an approach of receiving the "pull" from the demand. Therefore the supply, or production is determined according to the actual demand of the customers. In contexts where supply time is lengthy and demand is difficult to forecast, the best one can do is to respond quickly to observed demand. This is exactly what a kanban system can help: it is used as a demand signal which immediately propagates through the supply chain. This can be used to ensure that intermediate stocks held in the supply chain are better managed, usually smaller. Where the supply response cannot be quick enough to meet actual demand fluctuations, causing significant lost sales, then stock building may be deemed as appropriate which can be achieved by issuing more kanban. Taiichi Ohno states that in order to be effective kanban must follow strict rules of use (Toyota, for example, has six simple rules, below) and that close monitoring of these rules is a never-ending problem to ensure that kanban does what is required. Toyota's Six Rules are:

Do not send defective products to the subsequent process
The subsequent process comes to withdraw only what is needed
Produce only the exact quantity withdrawn by the subsequent process

1. Equalize production
2. Kanban is a means to fine tuning
3. Stabilize and rationalize the process

A simple example of the kanban system implementation might be a "three-bin system" for the supplied parts (where there is no in-house manufacturing) — one bin on the factory floor (demand point), one bin in the factory store and one bin at the suppliers' store. The bins usually have a removable card that contains the product details and other relevant information — the kanban card. When the bin on the factory floor becomes empty, i.e, there is demand for parts, the empty bin and kanban cards are returned to the factory store. The factory store then replaces the bin on the factory floor with a full bin, which also contains a kanban card. The factory store then contacts the supplier’s store and returns the now empty bin with its kanban card. The supplier's inbound product bin with its kanban card is then delivered into the factory store completing the final step to the system. Thus the process will never run out of product and could be described as a loop, providing the exact amount required, with only one spare so there will never be an issue of over-supply. This 'spare' bin allows for the uncertainty in supply, use and transport that are inherent in the system. The secret to a good kanban system is to calculate how many kanban cards are required for each product. Most factories using kanban use the coloured board system (Heijunka Box). This consists of a board created especially for holding the kanban cards.

E-kanban systems

Many manufacturers have implemented electronic kanban systems. Electronic kanban systems, or E-Kanban systems, help to eliminate common problems such as manual entry errors and lost cards. E-Kanban systems can be integrated into enterprise resource planning (ERP) systems. Integrating E-Kanban systems into ERP systems allows for real-time demand signaling across the supply chain and improved visibility. Data pulled from E-Kanban systems can be used to optimize inventory levels by better tracking supplier lead and replenishment times.

 



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