The Kanban System

The original Kanban system is believed to

have been developed by Toyota in the
early stages of what we would call its JIT
improvement campaign. The particular
feature of a Kanban system is that it
short-circuits normal ordering
procedures: as supplies of a Kanban-
controlled material are used up, new
supplies are requested simply by
releasing a re-order card which is sent
direct to the supply point (i.e. the
manufacturer or stockists). It is often
described as a ‘pull’ system, in contrast
with traditional ordering procedures,
which ‘push’ orders into the system.
The term ‘Kanban’ comes from the
Japanese language, in which Kanban
simply means ‘card’. Somehow, the word
Kanban seems to have caught
imagination of manufacturing people in
the Western World, even on the shop
floor, and today it is often used to
describe simplified ordering systems
which a Japanese terminology in
manufacturing companies in the Western
world, even if the interpretation isn’t
quite true to the original! However, in this
section I shall stick to the true meaning
of Kanban, the other types of application
being covered in the next section, on
improving the performance of suppliers.
To explain the Kanban concept, consider
the case of an assembler who is drawing
a particular component from a pallet
which, when full, contains 100 pieces. As
the last piece is drawn, the assembler
takes an identifying card from the empty
pallet and sends it back down the line to
the earlier work centre where that part
(among others) is made. On receiving the
Kanban card, the work centre responsible
for supplying the component makes a
new batch of 100 and sends it to the
assembly post ( so that the assembler
isn’t kept waiting, there will probably be
an extra pallet in the system to maintain
the supply while the new batch is being
made). This means that there is a
minimum of paperwork, and the order
cycle is generated on a ‘pull’ basis, the
components only being made when there
is an immediate need for them, thus
keeping work-in-progress to a minimum.
If you are familiar with the ‘two-bin’
method of stock control you will recognize
the similarity.
Since the procedure was first introduced
at Toyota, a number of variants have
been introduced (the explanation in the
previous paragraph was based on the
second variant, the 1 card Kanban):
 The 2 card Kanban: this is the original
Toyota method, developed at a time
when replenishment supplies were
routed through a component or parts
store (though it can also be used
when no stores intervention is
involved). The card released by the
 user authorizes the stores to ‘move’ a
replenishment supply to the user.
When they do so, a second card,
which is found on the pallet they are
about to supply, is removed and sent
to the component supplier as authority
to ‘produce’ another standard
quantity.
 The 1 card Kanban: similar to the 2-
card system, but a single card acts as
both ‘move’ and ‘produce’ authority.
This method is typically used where
the supply point is close to the user
point, so that the supply and user
operatives move the empty and full
pallets between the two work centers
themselves without the intervention of
a stores function. It is also commonly
used where the movement of pallets is
automated.
 The container-based Kanban: in this
variant the Kanban card is dispensed
with altogether. Instead, there are a
predetermined number of containers
or pallets in the system, all uniquely
identified to a particular part number
or component: if the maker of the
component has an empty container
waiting he or she fills it; if there is no
empty container waiting, then the
operator must stop production of that
component and switch to some other
task. This procedure is often used
when special-purpose containers or
pallets are provided, so that there is
no doubt as to which components
have to go into them. However, it is
also possible to use multipurpose
containers in what is in effect a cross
between the container-based and the
1 card systems, by painting the
appropriate part number and standard
quantity on the containers itself.
Another useful technique is to paint
containers for similar parts in different
colours, so that operators can identify
the right container easily.
 The shelf-space Kanban: anyone who
has used a motorway cafeteria will be
familiar with this method. At the
cafeteria counter a range of dishes is
provided to the customer via a
display/dispensing cabinet, which is
subdivided into a number of ‘pigeon-
holes’, each providing one
compartment for each type of dish.
The instructions to the kitchen staff
are ‘ensure that there is always at
least one and not more than three of
each type of dish available in the
cabinet. If there are three dishes
available of all types of dish, stop
producing and find something else to
do (like cleaning your equipment)’.
The same principle, applied to the
factory, takes the form of shelf spaces
marked up with the part
number/description of different parts.
Someone is given the task of making
sure that empty shelf places are filled.
 When all spaces are filled, production
of the item stops.
 The floor grid Kanban: exactly the
same as a shelf-space Kanban, but
typically used for bulky or heavy
components which are unsuitable for
putting on shelves.
In all the above examples of Kanban, an
essential feature of the system is that the
number of containers or locations is
systematically reduced by management
to the point where supply is kept just in
balance with the rate of use, so that the
replenishment supply arrives ‘just-in-
time’ for the user. The usual way of doing
this is to keep taking away one more
container each day (or week) until you
reach the point where production is
interrupted because the next full
container doesn’t arrive in time (i.e. it’s
‘just-too-late’!); replacing one container
should then bring the supply back into
balance with the rate of use. If you use
this method, make sure you keep one or
two full containers somewhere out of
sight, ready to slip into the line quickly so
that the interruption to production
doesn’t cause a problem. This trial and
error method of finding out how many
Kanban containers are needed is popular
because in practice Kanban are usually
introduced gradually, in parallel with the
old method of supply; if the same
containers are used as previously, some
will become surplus to requirements
anyway when the faster Kanban supply is
implemented, so you might as well take
advantage of this to reduce the number
in use gradually, in the way described.
If this trial and error method worries you,
or if you’ve decided to buy a new type of
container for your Kanbans, there is a
way of working out in advance exactly
how many containers will be needed;
using a ‘simulation’ model will enable you
to test the effects of different demand
levels and a different mix of production
with a high degree of confidence. You can
find more information about simulation
techniques in the article for Reducing
Risks Of Change.
From the above you will realize that
Kanban is not just another name for just-
in-time, as some people have suggested:
it is only part of a JIT implementation.
The ‘true’ Kanban system is normally only
suitable for high turnover components,
which are in regular use, and you should
generally avoid using Kanbans on high-
cost components. However, you can get
some of the benefits of a Kanban system,
even with high-cost components, by
using the shelf-space or floor grid method
in conjunction with the ‘scheduled
contracts’ method, described in the next
section: the example of a fax call-off
form, referred to there and illustrated in
Fig. 8, is used by Vokes Limited in
conjunction with a floor grid Kanban
system for arranging twice-weekly
deliveries of large rolls of filtration
material. This method has enabled them
to simplify ordering procedures, cut lead-
time from four weeks to a few days, and
do away with the bulk stores previously
held.
If you decide to use the Kanban concept
in your own factory, don’t constrain
yourself by trying to conform too rigidly
to what I have referred to as the ‘true’
Kanban system. Be flexible: adapt the
basic concept to your own circumstances
in whatever way you think appropriate,
remembering that the prime
considerations are minimizing material
and work-in-progress stocks, simplifying
re-ordering paperwork, and empowering
the actual users of the material to call for
supplies as and when they need them.