LEAN: Kanban Tool

Kanban is a relative concept to JIT (just-in-time) and Lean production. It literally means ‘billboard’ or ‘signboard’. Taiichi Ohno found out that kanban can be used as a means to achieve JIT. Kanban refers to an embellished metal or wooden sign, which are being used as trade marks and seals since the 17th century. These are masterpieces of logo design produced within rigid restrictions. For example, a pharmacy may use sumo wrestlers as kanban on their sign for advertising a product for curing anemia.

Kanban is basically a signal system for triggering action. It primarily uses cards for signaling an item’s need. There are other types of devices such as plastic balls (like golf balls) or markers (kanban squares), floor location, and empty part-transport trolley, which could also be employed for triggering the production, supply, or movement in a factory’s unit. Toyota was the first company to employ the kanban system, which proved not only an efficient tool for production system, but also for promoting excellent improvements. Problem areas were highlighted by reducing the kanban number in use. Toyota researched supermarkets in 1940s and found that only what is required could be bought and sold, in the necessary quantities. So, Toyota applied this concept to its earlier processes. A process moves to their store for its required components, which replenishes them. Kanban controls this replenishment rate and gives permission for production. This logic was applied in Toyota’s main machine plant shop in 1953.

Kanban’s approach to production scheduling is based on receipt of “pull” from demand. So, production, or supply, is tailored to suit customers’ demands. Kanban is employed as signal of demand that propagates immediately across supply chain. When there has been a delay in supply and consequent loss in sales, then by issuing more kanban, stock building could be achieved. In Taiichi Ohno’s view, kanban should follow strictly the rules of usage for its efficacy, and these rules must be closely monitored throughout. Toyota has its own six simple rules, which are outlined below:

Defective products should not be sent to subsequent process
The subsequent process can take only the needed quantity
The exact quantity that is withdrawn by subsequent process should only be produced
Production should be equalized
Kanban is used as a tool for fine tuning
The process should be stabilized and rationalized