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What Are Kanban Systems?

By Laura Metz
Updated May 17, 2024
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Kanban systems are used to signal when a material needs to be produced or ordered and how much is needed. It is a type of pull system which is based on customer demand and in which materials are only made when they are needed. A kanban system is a type of lean manufacturing, and it strives to have no more material on hand than is necessary.

The first kanban systems were developed by Taiichi Ohno for use by Toyota® manufacturing. In the mid 1900s, Ohno studied inventory strategies used in supermarkets. Many supermarkets actually function like a kanban system and have cards for every type of item sold. Ohno took what he learned from supermarkets and applied it to manufacturing.

Later, Toyota issued six rules to guide its kanban system. Most of these rules deal with ordering only what is needed to keep the rate of production as steady as possible. Whenever a defect is noted, it must be immediately fixed or discarded. If a defective product is allowed to go down an assembly line, it wastes both time and money.

Visual aids are used in kanban systems to show when a specific part is needed. These visual aids are usually kanban cards that feature the part’s name, picture, code, and the quantity needed. Kanban cards are often attached to a container where they become visible as soon as the quantity reaches a point where more should be ordered.

A stable level of demand is almost a requirement for kanban systems. Companies that produce seasonal items, such as snowsuits or beach toys, must adjust their numbers with the season. Otherwise, there will be too much stock in the off-season and too little stock when it is needed.

Kanban systems are also a tool for achieving just-in-time manufacturing (JIT). JIT manufacturing occurs when a facility has a stable rate of production. In an assembly line, every station must finish at exactly the right time in order to keep the line moving. Kanban systems make sure that no one ever runs completely out of a material, so the line never stops moving.

Although the kanban system was originally created to use kanban cards for each item, some production facilities now use other items. Other signals, such as kanban squares or golf balls, can be used to signal the need for more material at a workstation. Some production facilities have even implemented electronic kanban systems.

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Discussion Comments
By SkyWhisperer — On Dec 05, 2011

@nony - The real question is can this model of lean development be easily carried over into other industries?

In the software industry, where I work, we have this thing called agile development. It’s an iterative process, resulting in making changes a little at a time. Again, in keeping with the kanban system philosophy, it’s about doing no more, no less; only make incremental changes as you continually refine your production of software.

Unfortunately I don’t think it works as well in software as the kanban systems do in the manufacturing world. The reason is that software is made by people, and people can be more or less efficient. Manufacturing is done by robot arms, which never get tired or temperamental.

By nony — On Dec 04, 2011

@NathanG - Why would they use golf balls to replace the Kanban cards as signals? That sounds strange, and certainly not too high tech from what I can tell. I think they should use RFID chips – things that can easily be scanned.

By NathanG — On Dec 04, 2011

@hamje32 - I imagine that these Kanban systems must use sophisticated Kanban software to accomplish the intended result, which is no more, no less, the model of efficiency.

It may explain why Japanese cars are constantly the model of compactness and efficiency. You’re right; I think these systems are part of an overall philosophy that decries waste. It’s very oriental in that sense, in my opinion.

But the software would be needed not only to signal when to alter the rates of production, but also to conduct statistical analysis and make projections about possible future demands.

By hamje32 — On Dec 03, 2011

Years ago I read an article about the Japanese philosophy of improvement in manufacturing. It’s called “kaizen” which means improvement. It’s a philosophy that they incorporate into their daily manufacturing processes which leads to constant refinement, improvement and elimination or repair of defective merchandise.

Upon reading this article on Kanban pull systems and discovering that it was pioneered by Toyota, I immediately remembered “kaizen.” It seems that the Kanban systems would go hand in hand with these ideas of continual productivity on the assembly line.

I think it’s also one reason why the Japanese car manufacturing process is still the most efficient in the world, continuing to set standards for quality control and reliability. I think American car manufacturers are beginning to catch up, but if they do they will have to focus on both the Japanese philosophy of kaizen as well as the actual Kanban systems in my opinion.

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