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What is Kanban?
‘Kanban’ literally means – Visual board / Signboard / Billboard
Uses cards to signal the status of various activities/goods/WIP/processes
Highly effective tool to achieve Just-in-Time delivery
Consumption Production
THE INNOVATOR – TAIICHI OHNO
Taiichi Ohno (TOYOTA): Developed Kanban.
1940: Intrigued by the shelf replenishment system used in Supermarkets
Implemented the system in Toyota’s manufacturing plant for the first time in 1953
Signals to track replenishment cycles
More than just a JIT tool..
Scheduling method answering – what, when, how
Inventories minimized
Production after consumption
Close monitoring of Work-in-process
Encourages industrial Re-engineering
Cards, pallets, bins or boxes as signaling tools
DEMAND ‘PULL’ vs DEMAND ‘PUSH’
Differentiator Push Model Pull Model
Prime Busi. Driver Max Utilization at least cost High level of Customer service
Lead Time Long Short
Pricing Strategy Key means for balancing supply/Demand
Normally don’t impact
Mfg. Strategy Long Prod Run Short and flexible Prod Run
Inventory Typically High Typically Low
3rd Party Relationship Supplier relation tend to be Critical
Customer relation tend to be critical
Critical Tech Application Sales forecasting, Inv Mgmt, N/w Optimization
Order fulfillment, advance scheduling
SIMPLE vs INTEGRATED KANBAN PROCESS
Cards perform the task of signaling various processes.
Cycle with only one process - a simple Kanban process
Cycle with multiple processes - an integrated Kanban
process (one process providing the signal to the next
process)
Two different types of cards – Transport & Production
Transport Kanban
Contains info about the part origin & destination
Use of only one single card referred as “Simple process”
Most useful in daily schedule
Production Kanban
Multiple cards used for multiple processes
To what extent & when work is to accomplish at that station
Used along with Transport Kanban referred as “Integrated
process”
Often used between Corporation & it’s Supplier
RULES FOR EFFECTIVE APPLICATION
Never pass on defective product
Take only what is needed
Produce the exact quantity required
Level the production
Fine-tune production
Stabilize and rationalize the process
The Toyota way..
Objective: Control WIP
inventory
Produce only after
consumption
Cards as currency
controlling size of WIP
MERITS OF SYSTEM
A simple and understandable process
Provides quick and precise information
Low costs associated with the transfer of
information
Provides quick response to changes
Limit of over-capacity in processes
MERITS CONTD…
Avoids overproduction
Is minimizing waste
Control can be maintained
Delegates responsibility to line workers