Kanban

Kanban is one of the primary tools of a Just in Time (JIT) manufacturing system. It signals a cycle of replenishment for production and materials. This can be considered as a “demand” for product from on step in the manufacturing or delivery process to the next. It maintains an orderly and efficient flow of materials throughout the entire manufacturing process with low inventory and work in process. It is usually a printed card that contains specific information such as part name, description, and quantity.  In a Kanban manufacturing environment, nothing is manufactured unless there is a “signal” to manufacture. This is in contrast to a push-manufacturing environment where production is continuous.

According to Taiichi Ohno, the man credited with developing JIT, kanban is the means through which JIT is managed. Kanban is a signaling system. As its name suggests, Kanban uses cards to signal the need for an item. Other devices such as plastic markers (Kanban squares) or balls (often golf balls) can also be used to trigger the movement, production, or supply of a unit in a factory. For example, in the production of a widget, the operator has two shelves, one on either side of the workplace. The raw materials arrive on one shelf and the finished article on the other. These shelves act as kanbans. The outgoing kanban signals the customer's need so that when it is empty, the operator must produce one more widget. The Kanban is sized so that it can only hold however many the customer needs (usually one). When the operator begins work, he takes the raw material from the incoming kanban, thus signalling to the supplier that he needs more. Kanban is frequently known as a "pull" system, as everything is pulled in response to past demand. Demand forecasts are not used in kanban systems. This is the opposite of the traditional "push" manufacturing philosophy, in which everything is made to forecasted future needs. With this in mind, it is not surprising that an important determinant of the relative merits of "push" and "pull" is the quality of the demand forecast. If forecasts are good, then the kanban system will effectively waste useful information, whereas a good "push" system will

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produce just the right quantities at the right times. In contexts where demand is difficult to forecast, on the other hand, the best one can do is to quickly respond to observed demand. This is exactly what a kanban system does, as a demand signal immediately propagates through the entire chain. "Push" systems often encounter serious difficulties when demand forecasts turn out to be inaccurate.

The Kanban system might be visualised as a "Three bin system" for the brought out parts ( where there is no inhouse manufacturing)- one bin on the factory floor, 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 shop floor is empty, the Kanban card is removed and given to the store. The store then replaces the bin on the factory floor with a full bin which also contains a removable Kanban card. The store then contacts the Supplier and indicates the need to replenish the Kanban card. The product also containing a Kanban card is delivered into the factory store completing the final step to the system.

So it will never run out of product, providing of course, the cards are reliably collected from empty containers. It is a perfect "push-pull" that could also be described as a "loop", providing the exact amount required, with only "one" spare so there will never be an issue of "over-supply". The secret to a good Kanban system is to calculate how many Kanban cards are required for each product. Most factories use the coloured board system (Heijunka Box). This consists of a board created especially for the purpose of holding the Kanban cards.