What is Kanban?

Video Transcript

Welcome to this video introduction to kanban in a manufacturing environment. Specifically, by the end of this module, you’ll know what a kanban and kanban system are as well as the different functions kanban can serve. Finally, by the end of this module, you’ll understand the many different types of kanban used today. Let’s get things started by answering a question. What is a kanban? Kanban is a Japanese word that literally means signboard or sign. In the context of production control, kanban refers to the visual signals that authorize the production or movement of items. Kanban are sometimes referred to as the nervous system of a lean production system. Just like our human brain sends instructions to our various body parts, a kanban system gives production control instructions to each and every work area. It does this by connecting information flow with material flow by attaching kanban cards to the actual goods.

The kanban system was developed by Taiichi Ohno of the Toyota Motor Corporation as a way to make Toyota’s vision of just in time manufacturing a reality on the production floor. Ohno’s original aim was to stop overproduction in his machine shop, which was creating large inventories and costing a lot of money. Mr. Ohno was inspired to create the kanban system by the product replenishment methods he observed in American supermarkets. What caught his attention was the way shelves were restocked with goods only after products were consumed, in other words, pulled by the customers. In the broadest context, kanban is a tool of a just in time system. At the most basic level, a kanban is a signal that authorizes the production or movement of items. We often use a chain laying on the ground to visually demonstrate the difference between a kanban pull based system and a traditional push system that doesn’t use kanban. When we attempt to move the chain by pushing it, we end up with this type of situation. Just as the chain is uneven and loose, push production systems often create uneven inventory levels resulting in having too much of the wrong inventory and not enough of the correct inventory.

But, when we pull production through the system, meaning we only produce product when it’s required, the chain is tight resulting in all processes having the right inventory when they need it. With this said, kanban systems are far from perfect. You see, the kanban system can be full of ways such as excessive handling, inventory, and processing. In fact, the ideal just in time production system would use no kanban at all so long as it produces what the customer wants, when they want it and the quantity they want. In other words, our goal shouldn’t be to implement a kanban system. Instead, our goal should be true one-piece flow. Let’s now move our attention to the different functions of a kanban. First of all, a kanban sets limits within a production system. You might think of kanban as a type of currency that’s exchanged for an item, much like money is used to buy parts or materials. If there is no kanban, no items get moved or produced. When a kanban system functions correctly, nothing is ever made or moved without a kanban signal of some kind. This enables companies to limit the extremely deadly waste of overproduction since things are not produced until they’re needed.

In addition to setting limits, kanban also physically links material and information flow through a card, or as we often see today, through a bar code scan. Finally, kanban makes abnormalities visible since no material should be without a kanban and no kanban on the shop floor should be found anywhere but attached to the material, in the heijunka board, or in the kanban post box, which we’ll learn about later in the course. To wrap up this first overview module, let’s learn about some of the most common types of kanban. The first type of kanban is the classic two-card system where production and withdrawal kanban cards are used. In this example, we see a shaded withdrawal kanban going from shipping to the supermarket. This is a signal from shipping to the supermarket that it needs product to meet a customer request. Once the shipping clerk removes product from the supermarket, a production kanban will be sent to the assembly department signaling there’s an item missing in the supermarket that needs to be replenished. We’ll get into this in more detail later in the course, but a kanban card normally contains information such as the party name and number, the supplier process name, the quantity per container, the delivery address, the storage address, and the number of cards in the system.

A kanban system using cards differs most significantly from the two-bin system, which we’ll discuss shortly, and that the card is pulled as soon as the first part is taken. The next type of kanban system is referred to as a one-card system. While we’re referring to it as one card, there may not be a card used at all. Instead, we might use empty containers, or carts, or colored golf balls, or ping-pong balls, a light, or any kind of signal that conveys information. One of the most practical examples of a one-card kanban system is the mailbox flag. When the flag is up, a signal is sent to the postal worker that there is something inside the mailbox we wish to mail. Another system that doesn’t rely on traditional kanban cards is the two-bin system. In the two bin system, standardized bins or containers perform the role of the kanban card. An empty bin signals that more parts are required. The collection of empty bins should follow time based standard work whenever possible so that one person can supply the materials reliably for a department or section.

Here’s an example of how a two bin system works. It uses two bins with an equal amount of goods inside and the same information on the outside about the contained goods such as the name, location, and quantity within each bin. Parts are then consumed from the first bin as shown here. When the first bin is empty, there’s a signal to bring or replenish two more bins. The second bin then slides forward into position while two more bins are being prepared. Finally, a material handler replenishes two bins within the agreed lead time, which will obviously be before all of the parts are consumed from the second bin. While there are other kanban systems, these are some of the most common. Throughout the rest of this course, we’ll go on a much deeper journey, including how to calculate kanban quantities. We’ll also discuss how to implement and manage a kanban system. In our next module, we’re going to take a closer look at the two-card kanban system. We’ll speak to you soon.