All about Kanban, Part 1
What is Kanban?
Kanban is a communication system that controls the flow of the shop, and synchronizes the level of production to customer demand. Kanban is a visual system that allows everyone to see the flow, and to adjust to the level it is set at. Kanban uses signals to determine when an operation should start the next activity, and these signals can be cards, containers, emails or electronic notices. At its simplest, Kanban is similar to a two bin system, where an order for activity occurs when the first bin is empty.
Where should it be used?
Kanban can be used effectively in circumstances where demand is relatively stable (plus or minus 10 or 30%), and operations are not shared on multiple product lines with variable demands. Kanban is similar to lean manufacturing, but allows Kanban quantities to exceed the lot size of one. This allows for some flexibility in the shop for unexpected events, but not enough to overload the shop with excessive inventory. Of course, the goal of Kanban is to continuously lower the Kanban quantities through improvement of the shop processes that are causing the problems.
Like other manufacturing systems (MRP, Lean, etc), Kanban is only applicable where there is little variance in execution. For example, raw material shortages of vendors, or downtime of equipment, etc, can shut down the entire production sequence.
How does it work?
With the Kanban system, time is no longer wasted, money is no longer scarce, customers will no longer question, and quality will never be questioned.
What does a Kanban signal look like?
- The identity of the item that should be stocked “on this shelf”
- The reorder quantity
- “To whom” to send the order
- Any other information that that may be needed by the person making that order
- Cards- This was the original approach for Kanban, and placed a physical card with each container of materials. As each container emptied at the operation, it was passed back to the previous operation to be refilled.
- Email- Although not a common approach, the Kanban system can be run with simple email notifications of empty Kanban container.
- Electronic- A more recent and popular approach is the use of data collection tools to assist the Kanban system. When containers are emptied, the bar codes on the containers are scanned, which triggers the replenishment cycle. The electronic version also allows easy adjustment of kanban quantities for changes in customer demand or production improvements.
Stay tuned for the next part in this series, where we’ll look at the benefits of Kanban, as well as some of it’s limitations.