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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 Kanban System

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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

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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

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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

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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

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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-

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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.

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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

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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

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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

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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.