Kanban

Kanban Principles

Kanban maintains inventory levels; a signal is sent to produce and deliver a new shipment as material is consumed. These signals are tracked through the replenishment cycle and bring extraordinary visibility to suppliers and buyers.
Purpose	Logistic control system
Developer	Taiichi Ohno
Implemented at	Toyota

Kanban (看板^?) (literally signboard or billboard in Japanese) is a scheduling system for lean manufacturing and just-in-time manufacturing (JIT). Kanban is an inventory-control system to control the supply chain. Taiichi Ohno, an industrial engineer at Toyota, developed kanban to improve manufacturing efficiency. Kanban is one method to achieve JIT.

Kanban became an effective tool to support running a production system as a whole, and an excellent way to promote improvement. Problem areas are highlighted by reducing the number of kanban in circulation. One of the main benefits of kanban is to establish an upper limit to the work in process inventory, avoiding overloading of the manufacturing system. Other systems with similar effect are for example CONWIP. A systematic study of various configurations of kanban systems, of which CONWIP is an important special case, can be found in Tayur (1993), among other papers.

An English-language term that captures the meaning of the Japanese word, kanban, is queue limiter; and the beneficial result is queue limitation. Operationally, then, as process problems are dealt with, the queue limit (or maximum) should be reduced; for example, a former upper limit of five pieces is reduced to four, with queue time in the process reduced by 20 percent.

In the late 1940s, Toyota started studying supermarkets with the idea of applying shelf-stocking techniques to the factory floor. In a supermarket, customers generally retrieve what they need at the required time—no more, no less. Furthermore, the supermarket stocks only what it expects to sell in a given time, and customers take only what they need, because future supply is assured. This observation led Toyota to view a process as being a customer of one or more preceding processes, and to view the preceding processes as a kind of store. The "customer" process goes to the store to get required components, which in turn causes the store to restock. Originally, as in supermarkets, signboards guided "shopping" processes to specific shopping locations within the store.