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Kanban is a system used to manage the flow of inventory in a Lean manufacturing process. The word ‘kanban’, in Japanese, means ‘signboard.’

Kanban regulates inventory and helps promote flow. The most common kanban system uses two bins (or marked inventory locations.)

When one is empty, it triggers an order. While the production process consumes the materials in the second pile, the kanban signal, usually a card, makes its way through the replenishment process, refilling the first bin just-in-time to continue production.

While the term kanban technically refers to the card, in practice, it is often used to describe the materials governed by the card.

Kanban systems often have rules to make sure that they work effectively. (Taiichi Ohno had six rules for kanban use.)

Sample kanban rules

  1. No production without a kanban signal
  2. Only produce the quantity indicated on the kanban
  3. Treat kanban cards as controlled items
  4. Only pull from one kanban at a time
  5. Downstream process signals the upstream process
  6. Materials must have a kanban attached to them
  7. Process the kanbans in sequence (no cherry picking)
  8. Only send quality materials

Kanban prerequisites

Two things to keep in mind. The first is that kanban is a workaround for when flow is not possible. If flow was present, there would be no need to signal the upstream process.

The second is that kanban does not, by itself, reduce inventory. It manages inventory. In some cases, going from no system to a kanban system might even increase inventory (the quantity is based on kanban calculation). You will need to do things like improve quality, stabilize lead times, and reduce pack quantity to bring kanban sizes down.

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