What Is Kanban?

Kanban is a Japanese word that means card or signal. This is an important tool for improving production from a push to a pull system. At the core of pull production, upstream operations signals the prior operation to deliver what is needed, in the quantity needed, and when needed.

For a Kanban pull system to work effectively, demand variations must be smoothed. Distributing both the volume and mix of total customer orders evenly over sequential time periods through load leveling satisfies the demand variable. This achieves a steady and consistent work flow. With erratic demand patterns, higher inventory levels must be utilized, and this is accomplished by applying a policy variable to modify the calculation.

One uses takt time to determine the production rate to satisfy market demand. It is determined by dividing the available production time by the rate of customer demand. For example, if customer demand is 240 parts per day and the factory operates 480 minutes per day, takt time is 2 minutes. This sets the pace of production to match the rate of customer demand.

A kanban system can be manual or automated. A pull system can use various signal methods to trigger replenishment such as physical, min/max levels, cards, electronic, interplant, and single enterprise. The previous department must understand the signal and act upon it.

Kanban Benefits

By using a Kanban pull system you:

• Integrate all processes into one another and connects the value stream to your customer demand.
• Improve flexibility to respond to customer demand.
• Simplify the procurement process.
• Uncover hidden waste in processes.
• Empower employees to produce based on customer demand.
• Improve production scheduling.
• Eliminate unnecessary paperwork.
• Eliminate overproduction.
• Reduce inventory for finished goods, raw materials,and subassemblies.