A system of continuous supply of components, parts and supplies, suchthat workers have what they need, where they need it, when theyneed it.

The word Kan means "visual" in Japanese and the word "ban" means "card". So Kanbanrefers to "visual cards".What is a visual card? It is a visual aid that triggers action.

Here's how Kanban works:

Let's say one of the components needed to make widgets is a 42" stem-bolt and it arriveson pallets. There are 100 stem-bolts on a pallet. When the pallet is empty, the personassembling the widgets takes a card that was attached to the pallet and sends it to thestem-bolt manufacturing area. Another pallet of stem-bolts is then manufactured and sentto the widget assembler.A new pallet of stem-bolts is not made until a card is received.This is Kanban, in it's simplest form.A more realistic example would probably involve at least two pallets. The widgetassembler would start working from the second pallet while new stem-bolts were beingmade to refill the first pallet.If this was a high volume widget manufacturing facility, each widget assembly stationmight empty a pallet of stem-bolts in just a few minutes, and there could be 15 or 20widget assembly stations. Thus there would be a continual flow of cards going back tothe stem-bolt manufacturing area that would cause a continual flow of pallets of stem- bolts to be sent to the widget assembly stations.

Kanban is Pull (Demand)

This is called a "pull" type of production system. The number of stem-bolts that are madedepends on the customer demand--in other words the number of cards received by thestem-bolt manufacturing area.Systems other than cards may be used. For example, the empty pallets may be returned tothe stem-bolt manufacturing area. Each empty pallet received indicates a need tomanufacture 100 more stem-bolts. For other types of components, bins, boxes or cagesmight be used instead of pallets. Or components might be stored on shelves in the widgetassembly area. When a shelf became empty that signals that more components need to bemanufactured and the shelf refilled.

In Kanban the method of handling the components is flexible, and depends on the needsof the manufacturing process.

An Alternative Kanban Model

Kanban can also operate like a supermarket. A small stock of every component needed tomake a widget would be stored in a specific location with a fixed space allocation for each component. The widget assemblers come to the "supermarket" and select thecomponents they need. As each component is removed from the shelf, a message is sentto a "regional warehouse" or component manufacturing facility, requesting that thecomponent be replaced. The "supermarket" might then receive a daily shipment of replacement components, exactly replacing those that were used.If we just change the term "supermarket" to "warehouse" we have our manufacturingexample.This "supermarket" model is different from the first Kanban example in that it would beused when components are manufactured in facilities that are distant from the widgetassembly plant. Instead

of moving around small quantities of components, larger quantities are shipped once a day to the centralized warehouse.

Kanban - Responsive To Customers

Kanban results in a production system that is highly responsive to customers. In theabove example, the production of widgets will vary depending on customer demand. Andas the widget demand varies, so will the internal demand for widget components. Insteadof trying to anticipate the future (predicting the future is difficult) , Kanban reacts to theneeds.Kanban does not necessarily replace all existing material flow systems within a facility.Other systems such as Materials Requirement Planning (MRP) and Reorder Point (ROP)may remain in operation. Kanban is most beneficial when high volume/low valuecomponents are involved. For low volume and high value components, other materialsmanagement system may be a better option.

JIT - Just In Time / Continual Improvement

Kanban is directly associated with Just-In-Time (JIT) delivery. However, Kanban is notanother name for just-in-time delivery. It is a part of a larger JIT system. There is more tomanaging a JIT system than just Kanban and there is more to Kanban than just inventorymanagement.For example, Kanban also involves industrial re-engineering. This means that productionareas might be changed from locating machines by function, to creating "cells" of

equipment and employees. The cells allow related products to be manufactured in acontinuous flow.Kanban involves employees as team members who are responsible for specific work activities. Teams and individuals are encouraged participate incontinuously improving the Kanban processes and the overall production process.Kanban is not a system indented to be used by itself. It is an integral part of Kaizen and5S.

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Introduction to Kanban

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Benefits of Kanban

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Getting Started With Kanban

Three-bin system

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 thefactory 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 — thekanban card . When the bin on the factory floor becomes empty, i.e., there is demand for parts, theempty bin and kanban cards are returned to the factory store. The factory store thenreplaces 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 itskanban card. The supplier's inbound product bin with its kanban card is then deliveredinto 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 oversupply. This 'spare' bin allows for theuncertainty in supply, use and transport that are inherent in the system. The secret to agood 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 consistsof a board created especially for holding the kanban cards