Topics: Kanban, Manufacturing, Mass customization Pages: 25 (8448 words) Published: April 18, 2011
What Is Kanban?
Derived from the combination of two Japanese words, kan ("visual") and ban ("card" or "board"), kanban roughly translates to sign board or signal board. In English it has developed a highly specialized meaning - kanban is a process of manufacturing or work space organization that relies upon visual signals to control inventory. Kanban has become synonymous Just in Time production and "demand scheduling." It is a cornerstone of lean manufacturing, just as it relies upon 5s and kaizen, so to do they rely upon kanban for full implementation. Kanban, as a means of manufacturing, was developed by Toyota during the late 1940s and early 1950s. During that period, the Toyota Corporation studied American supermarkets and their management techniques. Taiichi Ohno, the man credited with developing JIT, saw the relationship between the supermarket and its customer as an efficient means of organizing production, because a supermarket assures future stock while only supplying what the consumer has immediately signaled that he or she needs. The premise behind this organization is a visual signal, a kanban. In the case of a supermarket it might be the level in a bin of oranges dipping below a certain marker. This visual signal, in turn, tells the supermarket employee to stock more oranges. Ohno saw the possibility to deploy this means of organization in Toyota's main machine shop, and had done so by 1953. In the 1970s, with the economy worsening, kanban made its way across the Pacific Ocean to the United States. Since 1977 it has become the principle means of implementing Just in Time (JIT) production and is used in all manner of working environments. Benefit of kanban

What Does Kanban Do?

The implementation of a kanban system, as well as other lean manufacturing methods, like 5s, and kaizen, can have significant benefits for almost any type of work. As a system, kanban is faster, more efficient, and saves significant money over most other production models. Kanban is particularly useful for high volume, low cost items, and may be less appropriate for low volume, high cost, long lead time production operations. A kanban system is also far more directly responsive to customer demand, with the consumption level of the customer being the immediate impetus behind production levels. Kanban is a system that visually indicates when production should start and stop. Only what is needed is produced, and this is controlled by a series of kanbans, that indicate when production should begin. Kanban has been known to:

• Reduce Inventory

o Kanban will reduce inventory, on average, by 25 to 75%. This saves any company significantly in terms of rent, electricity, and storage space. 

o In addition, all of the space freed by the implementation of a kanban system can be used for future expansions or new opportunities

• Improve work flow

o The visually organized environment ensures all parts are easily found and continually stocked.

o The speed of moving from one task to another is significantly reduced by the creation of clearly marked flow lanes, kanban cards, and clearly marked labels.

• Prevent Overproduction. 

Because parts are only created at the visual signal by the kanban label (link), inventory is much less likely to be overproduced. Resulting in significant savings in the holding of stock.

• Improves responsiveness to changes in demand. 

Unlike a predictive system, kanban immediately reacts to the environment. By responding to clearly and easily read kanban cards the lag time between a shift in demand and a shift in production is almost non-existent.

• Minimize risk of obsolete inventory, because inventory is only created as it is needed.

How Does Kanban Work?

Imagine a factory that produces widgets. The production of this widget requires two parts being put together at the factory. Let's call them Part A and Part B. The...
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