Understanding Kanban in the Manufacturing Industry

Kanban is a visual scheduling and inventory management system that originated from Toyota’s manufacturing practices. It utilizes cards, bins, and signals to effectively manage production and ensure the right amount of materials are produced or procured at the right time, following the principles of Just-In-Time production.

By visualizing workflows and controlling inventory levels, Kanban prevents disruptions and excess stock. It highlights areas for improvement, gradually and efficiently enhancing processes across various industries.

The concept of Kanban was inspired by supermarket stocking methods in the late 1940s. Similar to how supermarkets supply what customers need without excess, Toyota saw each stage of their production process as a customer and inventory as the supplier. Their aim was to provide only what was needed at each stage.

There are different types of Kanban used in the flow of work:

  • Production Kanban: Authorizes the production of a specific quantity of products.
  • Withdrawal Kanban: Authorizes the withdrawal of a container of product from inventory or an assembly area.
  • Supplier Kanban: Authorizes a supplier to ship a specific quantity of product to the factory or a customer.
  • Emergency Kanban: Used to replace defective products or address unexpected shortages.
  • Express Kanban: Used to expedite the production or withdrawal of a container of product in urgent situations.

The calculation for the number of Kanban cards required in the flow of material between downstream and upstream processes is crucial. It aims to minimize excess inventory accumulation and waste. The formula is:

Number of Kanban = Demand per Day x Lead Time / Container Size × (1 – Safety Stock %)

For example, if the daily demand is 100 units, lead time is 6 days, safety stock is 10% of daily demand, and container size is 60 units, the number of Kanban would be 11.

Implementing Kanban can streamline material handling operations and improve overall efficiency. It is a simple system that can be customized to fit the specific constraints of a supply chain.