What is Kanban?

By Jonathan Lin | Saturday, Jun 29, 2019 in Articles

Kanban (看板), which means “signboard” in Japanese, takes its name from the cards that were used by Toyota to track production within a factory.

Origins of Kanban

Taiichi Ohno, an industrial engineer at Toyota, developed kanban to eliminate wastage stemming from overproduction. After Japan lost the war in 1945, Toyoda Kiichiro, then president of Toyota Motor Company said, “Catch up with America in three years.”

Ohno sought to help achieve this, but it was obvious to him that the merits of mass production must be downplayed and is impractical toward achieving this goal.

Taiichi Ohno (Source: Wikipedia)

The basic idea of Kanban is this: Imagine a production line which consists of multiple stages. Each stage in the production line produces parts for the following stage. A new customer order triggers production at the very last stage (N), which then triggers production in stage N-1, stage N-2, etc. until the first stage. Here, kanban is essentially the signal that travels backward from stage N, to stage N-1, N-2, etc., represented in practice in the form of a card or “signboard”.

The following diagram illustrates this in action. A kanban card is attached to the parts produced, and when that part is consumed, the kanban card is returned to the kanban table of the previous stage. As soon as a particular threshold is reached (the “red zone” in the diagram), production is triggered in the previous stage.

Signals in the form of kanban cards are sent to previous manufacturing stage as inventory is consumed.
(Source: Wikipedia)

Kanban is a Pull System

Thus, kanban is essentially a pull system, as opposed to a push system where work is being pushed from the start of the production line via demand-forecasting. The pull comes from demand and products are made to order.

A push system is one where new input is pre-determined by a plan or event, regardless of system capacity.
(Source: software-kanban.de)
A pull system is one where new input is determined by the system's capacity or capability.
(Source: software-kanban.de)

Kanban shines in a particular context where supply time is lengthy and demand is difficult to forecast, which is exactly the context of car manufacturing. Actual demand is used as a signal that immediately travels through the supply chain. As a result, stock held in the supply chain is usually smaller. Should there be a risk of insufficient supply to meet demand, more stock can be kept in the supply chain by placing more kanban cards in the system.

Kanban cards signal the need to move materials within a production facility or from outside. Essentially, kanban cards signal a depletion of inventory. When received, kanban cards trigger replenishment of inventory.

A Kanban card together with the bag of bolts that it refers to.
(Source: Wikipedia)

While physical kanban cards are still in use today, many manufacturers have implemented electronic kanban, or e-kanban systems. The use of e-kanban helps eliminate manual entry errors and lost cards. E-kanban systems often mark inventory with barcodes, which workers scan at various stages to signal usage. These scans relay messages (via email or the internet) to suppliers to ensure the restocking of inventory.

Kanban in KanRails

KanRails borrows ideas from the original kanban term in manufacturing, namely kanban used as a signaling mechanism, and kanban as a pull system. KanRails also incorporates ideas from David J. Anderson’s Kanban Method, which builds on the origins on kanban in manufacturing and applies it to knowledge work in the 21st century.

In today’s working environment, kanban as a pull system enables you and your team to meet the demands of upper management and customers (input) while taking team capacity into consideration in order to avoid team burnout. We will explore more on how this can be achieved in our later articles.

Read more about the Kanban Method in our next article, “What is the Kanban Method?” (coming soon)

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