|Purpose||Logistic control system|
Kanban (かんばん(看板)) (literally signboard or billboard) is a scheduling system for lean and just-in-time (JIT) production. Kanban is a system to control the logistical chain from a production point of view, and is not an inventory control system. Kanban was developed by Taiichi Ohno, at Toyota, to find a system to improve and maintain a high level of production. Kanban is one method through which JIT is achieved.
Kanban became an effective tool in support of running a production system as a whole, and it proved to be an excellent way for promoting improvement. Problem areas were highlighted by reducing the number of kanban in circulation.[clarification needed]
In the late 1940s, Toyota started studying supermarkets with the idea of applying store and shelf-stocking techniques to the factory floor. In a supermarket, customers obtain the required quantity at the required time, no more and no less. Furthermore, the supermarket stocks only what it expects to sell within a given time frame, and customers take only what they need, since future supply is assured. This observation led Toyota to view a process as being a customer of one or more preceding processes, and the preceding processes are viewed as a kind of store. The customer "process" goes to the store to obtain required components which in turn causes the store to restock. Originally, as in supermarkets, signboards were used to guide "shopping" processes to specific shopping locations within the store.
A Kanban system, when combined with unique scheduling tools, can dramatically reduce inventory levels, increase inventory turnover, enhance supplier/customer relationships and improve the accuracy of manufacturing schedules. Kanban aligns inventory levels with actual consumption; a signal is sent to produce and deliver a new shipment when material is consumed. These signals are tracked through the replenishment cycle, bringing visibility to both the supplier and the buyer.
Kanban uses the rate of demand to control the rate of production, passing demand from the end customer up through the chain of customer-store processes. In 1953, Toyota applied this logic in their main plant machine shop.
One important determinant of the success of production scheduling based on demand "pushing" is the ability of the demand-forecast to receive such a "push". Kanban, by contrast, is part of an approach where the "pull" comes from the demand. The supply or production is determined according to the actual demand of the customers. In contexts where supply time is lengthy and demand is difficult to forecast, often, the best one can do is to respond quickly to observed demand. This situation is exactly what a kanban system accomplishes, in that it is used as a demand signal that immediately travels through the supply chain. This ensures that intermediate stocks held in the supply chain are better managed, and are usually smaller. Where the supply response is not quick enough to meet actual demand fluctuations, thereby causing significant lost sales, stock building may be deemed more appropriate, and is achieved by placing more kanban in the system.
Taiichi Ohno stated that to be effective, kanban must follow strict rules of use. Toyota, for example, has six simple rules, and close monitoring of these rules is a never-ending task, thereby ensuring that the kanban does what is required.
Toyota's Six Rules
- Do not send defective products to the subsequent process.
- The subsequent process comes to withdraw only what is needed.
- Produce only the exact quantity that was withdrawn by the subsequent process.
- Level the production.
- Kanban is a means of fine tuning.
- Stabilize and rationalize the process.
Kanban cards 
Kanban cards are a key component of kanban and signal the need to move materials within a manufacturing or production facility or move materials from an outside supplier in to the production facility. The kanban card is, in effect, a message that signals that there is a depletion of product, parts, or inventory that, when received, the kanban will trigger the replenishment of that product, part, or inventory. Consumption therefore drives demand for more production, and demand for more product is signaled by the kanban card. Kanban cards therefore help create a demand-driven system.
It is widely held by proponents of lean production and manufacturing that demand-driven systems lead to faster turnarounds in production and lower inventory levels, thereby helping companies implementing such systems to be more competitive.
In the last few years, systems sending kanban signals electronically have become more widespread. While this trend is leading to a reduction in the use of kanban cards in aggregate, it is still common in modern lean production facilities to find widespread usage of kanban cards. In Oracle ERP (enterprise resource planning), kanban is used for signalling demand to vendors through e-mail notifications. When stock of a particular component is depleted by the quantity assigned on kanban card, a "kanban trigger" is created (which may be manual or automatic), a purchase order is released with predefined quantity for the vendor defined on the card, and the vendor is expected to dispatch material within a specified lead time.
Kanban cards, in keeping with the principles of kanban, simply convey the need for more materials. A red card lying in an empty parts cart conveys that more parts are needed.
Three-bin system 
An example of a simple kanban system implementation might be a "three-bin system" for the supplied parts, where there is no in-house manufacturing. One bin is on the factory floor (the initial demand point), one bin is in the factory store (the inventory control point), and one bin is at the supplier's business. The bins usually have a removable card containing the product details and other relevant information — the classic kanban card.
When the bin on the factory floor becomes empty (an indication that there was demand for parts), the empty bin and kanban cards are returned to the factory store (the inventory control point). The factory store then replaces the bin on the factory floor with a full bin from stock, which also contains a kanban card. The factory store then contacts the supplier’s business and returns the now-empty bin with its kanban card. The supplier's full product bin, with its kanban card, is then delivered into the factory store, completing the final step in the system. Thus, the process will never run out of product, and could be described as a closed loop in that it provides the exact amount required, with only one spare bin so there will never be an oversupply. This 'spare' bin allows for the uncertainties in supply, use, and transport that are found in the inventory system. The secret to a good kanban system is to calculate just enough kanban cards required for each product. Most factories using kanban use the coloured board system (heijunka box). This slotted board was created especially for holding the cards.
Electronic kanban systems 
Many manufacturers have implemented electronic kanban systems aka an "e-kanban system." These help to eliminate common problems such as manual entry errors and lost cards. E-kanban systems can be integrated into enterprise resource planning (ERP) systems, enabling real-time demand signaling across the supply chain and improved visibility. Data pulled from e-kanban systems can be used to optimize inventory levels by better tracking supplier lead and replenishment times.
Personal kanban 
The application of kanban to personal work originated with Jim Benson after he learned of related concepts through his associations with authors David Anderson, Corey Ladas and Don Reinertsen.
See also 
- Backflush accounting
- Material requirements planning
- Manufacturing resource planning
- Scheduling (production processes)
- Supply chain management
- List of software development philosophies
- Lean software development
- Visual control
- Continuous-flow manufacturing
- Kanban board
- Kanban (development)
- Waldner, Jean-Baptiste (September, 1992). Principles of Computer-Integrated Manufacturing. London: John Wiley. pp. 128–132. ISBN 0-471-93450-X.
- "Kanban". Random House Dictionary. Dictionary.com. 2011. Retrieved April 12, 2011.
- Ohno, Taiichi (June 1988). Toyota Production System - beyond large-scale production. Productivity Press. p. 29. ISBN 0-915299-14-3.
- Shingō, Shigeo (1989). A Study of the Toyota Production System from an Industrial Engineering Viewpoint. Productivity Press. p. 228. ISBN 0-915299-17-8.
- Ohno, Taiichi (June 1988). Toyota Production System - beyond large-scale production. Productivity Press. pp. 25–28. ISBN 0-915299-14-3.
- Shingō, Shigeo (1989). A Study of the Toyota Production System from an Industrial Engineering Viewpoint. Productivity Press. p. 30. ISBN 0-915299-17-8.
- Vernyi, Bruce; Vinas, Tonya (December 1, 2005). "Easing into E-Kanban". IndustryWeek. Retrieved April 12, 2008.
- Drickhamer, David (March 2005). "The Kanban E-volution". Material Handling Management: 24–26.
- Cutler, Thomas R. (September 2006). "Examining Lean Manufacturing Promise". SoftwareMag.com. Retrieved January 29, 2013.
- Benson, Jim (February 2011). Personal Kanban: Mapping Work - Navigating Life. CreateSpace. ISBN 1-4538-0226-6.
- Anderson, David (September 2003). Agile Management for Software Engineering: Applying the Theory of Constraints for Business Results. Prentice Hall. ISBN 0-13-142460-2.
- Anderson, David (April 2010). Kanban. Blue Hole Press. ISBN 0-9845214-0-2.
- Ladas, Corey (January 2008). Scrumban: Essays on Kanban Systems for Lean Software Development. Modus Cooperandi Press. ISBN 0-578-00214-0.
- Reinertsen, Don (October 1997). Managing the Design Factory. Free Press. ISBN 0-684-83991-1.
- Reinertsen, Don; Preston G. Smith (October 1997). Developing Products in Half the Time: New Rules, New Tools, 2nd Edition. Wiley. ISBN 0-471-29252-4.
- Reinertsen, Don (May 2009). The Principles of Product Development Flow: Second Generation Lean Product Development. Celeritas Publishing. ISBN 1-935401-00-9.
Further reading 
- Waldner, Jean-Baptiste (1992). Principles of Computer-Integrated Manufacturing. John Wiley & Sons. ISBN 0-471-93450-X.
- Louis, Raymond (2006). Custom Kanban: Designing the System to Meet the Needs of Your Environment. University Park, IL: Productivity Press. ISBN 978-1-56327-345-2.
|Look up kanban in Wiktionary, the free dictionary.|
- Toyota: Kanban System
- Kniberg, Henrik (December 21, 2009). "Kanban and Scrum - making the most of both". Retrieved December 22, 2011.
- David Anderson & Arne Roock (February 2, 2010). "Software Engineering Radio, Episode 156: Kanban with David Anderson". Retrieved April 10, 2010.
- Kanban Pizza Challenge, a Creative Commons Simulation to understand Kanban