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Whiteboard with Kanban card

Definition of Kanban

Kanban, a Japanese term meaning "label", is a method of controlling the flow of materials based on the flow of information exchanged between a customer and his supplier. Kanban achieves the following:

  • Optimizes production due to the supplier only delivering what the customer requires, i.e. in pull flow. In this case stocks are reduced to the bare minimum.
  • Simplifies and strengthens relationships between customers and suppliers at all stages of manufacturing by shortening information circuits.
  • Delegates simple, visible and reliable fabrication scheduling to the manufacturer.

The Kanban also reduces:

  • Inventories and work in progress due to an efficient organization
  • Storage surface by the way of implementing a Kanban loop
  • Malfunctions by precise rules

Sizing and Controlling Stocks with the Kanban Method

Continuous improvement in the supplier-customer relationship is essential to maintaining close and lasting partnership relationships. Improving inventory management as necessary ensures maximum flexibility and service. The Kanban method is designed to facilitate these improvements in an industial setting.

Improving Stock Management as Necessary

Kanban is a form or card that accompanies each batch of coins. This simple "piece" of paper in a Kanban system becomes an indispensable visual signal to indicate when and how much to produce. The Kanban card contains 3 types of information:

  • Identification information

    Part reference and number of pieces per container, possibly photo of the part.

  • Tracking Information

    Customer's and supplier's identification, where to store the containers and where to place the released kanban master records.

  • Management Information

    Number of Kanban labels in circulation for reference and the release lot size. This will make it easy to check that the KANBAN loop put is helping to reduce stocks.

A Kanban loop is a circuit of Kanban cards. For a given reference, it is the set of Kanban cards required and sufficient to ensure the continuity of supply to the customer by his supplier. Kanban organizes production in pull flow: The customer is downstream and controls the supplier's production upstream.

Sales orders that automatically trigger the production of parts by relying on order feedback. There are two types of Kanban; production Kanban and transfer or delivery Kanban.

Origin and Application of the Kanban Method

The Kanban method has been applied in Toyota factories. Many methods such as the 5S method, or TPM , come from Toyota factories are called TPS (Toyota Production Systems). Taiichi Ōno, a Japanese engineer was the precursor of this production management method. Outside the industry, the Kanban method is also a project management system just like the Agile method or the Scrum method.

This Kanban system can be applied in any part of the flow, i.e. :

  • Between two workshops or two machines
  • Between a store and a manufacturing workshop
  • Between a production site and its suppliers

The Kanban system enables production to be controlled using a visual system that generates production orders that meet actual consumption. A simple and permanent customer-supplier relationship is established. The stock is kept under control because it is kept within a range that makes it possible both to ensure deliveries and to avoid breakdowns or overruns. The KANBAN method is well adapted to large and medium series whose flow has been regulated. With a few adaptations, it can also be applied to small series.

Kanban can become the essential tool for progress to which other improvement actions can be added, focusing on :

  • Flexibility of the means of production within the framework of a SMED approach
  • Improving production reliability as part of a TPM approach
  • Skills development of operational actors such as line coordinators, operators, etc. 

The Kanban Method, a LEAN Manufacturing Tool

When facing machine breakdowns, defects and errors of all kinds, and imbalances in production lines, stocks are often thought to ensure continued deliveries.

Unfortunately, this convenience always comes at a high price. While the effects of malfunctions are mitigated by inventories, the cost of these anomalies is not. Worse, the feeling of security given by the stock induces a laxity in the exploitation of resources, which always leads to a drift in production costs. Stocks mask real production problems. They are also a powerful inhibitor of progress.

SESA SYSTEMS Mascot with cardboard

Seeking to constantly lower stock levels means committing to a continuous improvement process whose sole objective is the elimination of hazards that disrupt production and increase production costs. For a supplier, the basic rule is to produce only the quantity of compliant parts the customer needs, when he needs them and with a reasonable level of stock. Kanban supports this objective.

Kanban Board Example

  • Factory Inventory Management Chart

    The Kanban method decentralizes and simplifies production management within the production area.Kanban eliminates the need for production orders. A visual inventory tracking chart is a self-managing Kanban visual system that allows decision-making at the operator level. The visual table is especially useful because it groups together the Kanban labels awaiting production and is therefore placed close to the supplier. A management table has as many columns as there are references. Each column must be sized according to the number of cards in the loop. The choice of media is determined according to the user's needs. The implementation of a visual Kanban management board provides:

    • Real-time tracking of product quantity
    • Quick and easy visualization
    • An improvement in stock rotation and work team autonomy

    Rules to Optimize a Kanban System

    Kanban's operation can only be reliable if a few simple rules are scrupulously respected by everyone involved in the circulation of labels. First, a card is attached to each full container and the customer releases the Kanban card as soon as the container is empty. The containers strictly contain the quantity of parts indicated on the label. The customer then returns the master records to the vendor as soon as they are released. Free Kanban forms must appear on the tracking chart.

    For a constant consumption of products by the customer, it is common to color the Kanban areas to make them visual. The manufacturing process is started by observing the management chart. The successive attainment of the thresholds determines the priority. The Kanban management board, visible to all, provides access to exact customer consumption and allows manufacturing to commit the right resources to supply products on time. There are also methods available to calculate thresholds.

    Kanban Management FIFO System

    Green field (good threshold): This is the minimum release lot size. When Kanban cards are in this area, production start is not allowed.

    Orange or yellow zone (threshold limit): Located between the green and red zones. It is a "buffer" zone that absorbs fluctuations in downstream load and supplier contingencies. It also makes it possible to arbitrate priorities between the different references. When the badges are in this area, it is possible to start production.

    Red zone (alert threshold): When the queue reaches this zone, production must be started as a matter of urgency because a supply disruption at the customer's premises is possible. In the red zone, the supplier must contact his customer to inform him of the difficulties he is encountering. This safety zone makes it possible to absorb the hazards and the strong fluctuations of the demand.

    In some cases, it is imperative to respect the FIFO rule, i.e. first in-first out (product freshness, material expiry, quality maintenance). In all cases, the FIFO rule is strongly recommended.

    Play-Based Training for the Kanban Method.

    Train your collaborators to better understand the Kanban method with an interactive game. The Kanban Start-up Kit: Complementary to Kanban training integrates all the tools necessary for direct and concrete application in the field during a Kanban job site (following the classroom session).
    Results: A demonstration of the simplicity of a Kanban project.

    Kanban training game