THE KANBAN SYSTEM
Kanban was developed at the Toyota car plants in Japan as a program to smooth the flow of
products throughout the production process. Its aim is to improve system productivity and to secure
operator involvement and participation in achieving this high productivity by providing a highly
visible means to observe the flow of products through the production system and the build-up of
inventory levels within the system. Later it was further developed as a means of production activity
control to achieve the goals of JIT and to manage the operation of just in time production. Kanban
also serves as an information system to monitor and help control the production quantities at every
stage of the manufacturing and assembly process.
Kanban is seen as a pull system, as distinct from the production activity control systems in
MRP, which are regarded as push systems. Both push and pull systems are driven by a master
production schedule (“MPS”), which defines the requirement for individual products, i.e. top-level
items in the bill of materials. This MPS, in turn, is broken down into a detailed plan for items to be
manufactured, assembled, and purchased.
A push system operates by attempting to determine when individual work centers must complete
processing of work orders in order to meet the commitments of the MPS. MRP is considered to be
the classical example of a push system.
A pull system, on the other hand, looks at the manufacturing process from the other end, i.e.
from the perspective of the finished item. The production controller works on the basis that his/her
orders represent firm customer requirements. The time horizon is understandably short. The orders
are broken down from the highest level and the controller checks whether sufficient component
parts are available to produce the finished product. If the components are available, the product is
produced. However, if they are not, components are pulled from the preceding work center. A
similar procedure is followed right back through each production stage and extending all the way
back to include outside vendors. Such a system places great demands on the production system and
vendors. These demands can be met either by having all component parts in inventory or,
alternately, having the capability to respond and make them available in a very short time (i.e. short
lead time).
It should be noted that this type of control mechanism is only applicable in plants involved in
what is termed by many manufacturing systems analysts as repetitive manufacturing. Let us quickly
define repetitive manufacturing and then go on to look at how kanban cards are used.
Repetitive manufacturing is
"the fabrication, machining, assembly and testing of discrete, standard units produced in volume, or
of products assembled in volume from standard options... [it] is characterized by long runs or flows
of parts. The ideal is a direct transfer of parts from one work center to another.
One could argue that the end result of rigorously applying the JIT approach and of using JIT
manufacturing techniques is to move a manufacturing system away from job shop or batch
production to repetitive manufacturing.
Production Activity Control with Kanban
Under Kanban, only the final assembly line knows the requirements for the end product and,
with this knowledge, it controls what is produced in the total manufacturing system using the
following procedure:
The final assembly line, having received the schedule, proceeds to withdraw the
components necessary, at the times they are required and in the quantities they are required,
from the feeding work centers or subassembly lines. These work centers or subassembly
lines produce in lots just sufficient to replace the lots that have been removed. However, to
do this, they also have to withdraw parts from their respective feeder stations in the
quantities necessary. Thus, a chain reaction is initiated upstream, with work centers only
withdrawing the components that are required at the correct time and in the quantities
required.
In this way, the flow of all material is synchronized to the rate at which material is used on the
final assembly line. Amounts of inventory will be very small if a regular pattern exists in the
schedule and if the deliveries are made in small quantities. Thus, Just in Time can be achieved
without the use of controlling work orders for parts at each work center.
The Kanban Card Types
Kanban is the Japanese word for card. Kanbans usually are rectangular paper cards placed in
transparent covers. There are two main types of card in use:
1.
2.
Withdrawal kanbans Withdrawal kanbans define the quantity that the subsequent process
should withdraw from the preceding work center. Each card circulates between two work
centers only - the user work center for the part in question and the work center that produces
it.
Production kanbans Production kanbans define the quantity of the specific part that the
producing work center should manufacture in order to replace those, which have been
removed.
Kanban Card Usage
For a Kanban system to operate effectively, very strict discipline is required. This discipline relates
to the usage of the kanban cards. This requirement for discipline also serves to illustrate the need
for well-documented manufacturing procedures and a well-trained group of operators who are
aware of the procedures and who are motivated to follow them rigorously - a confidence born of
experience of good operator practice. There are five guidelines on the usage of the kanbans, which
help achieve JIT production:
(1)
A work center should withdraw only the items which it requires from the preceding work
center in the quantities required and, equally importantly, at the required time. There are a
number of operating principles which support this:


(2)
(3)
(4)
(5)
No removal of material is allowed without an available withdrawal kanban and an
available empty container.
A withdrawal of more parts than indicated on the withdrawal kanban is not allowed.
A work center or process should only produce those items, which have been removed by the
following work center or process. The freed production kanbans act as a schedule for the
work center. The work center is not allowed to produce greater quantities than stipulated on
the production kanban and the sequence of operations in the work center or process must
follow the sequence in which the production kanbans were freed. As production is initiated
by the final assembly schedule released to the assembly line, the schedule is passed back
through the production system by the release of production kanbans. Rigorously adhering
to the above guidelines results in what is effectively an invisible conveyor line, constructed
and controlled by the flow of kanbans through the production system.
Defective or substandard items should never be passed to a following work center. This
implies rigorous quality control at each work center or step in the production process.
Allowing defective parts to stay within the production system will greatly upset the flow of
parts at a later stage when the defective part is detected.
The level of inventories in the production system is dictated by the number of kanbans since
each kanban represents the contents of a standard container. The number of kanbans should
therefore be minimized. By reducing the number of kanbans and the size of each container
the level of inventories is progressively reduced.
The Kanban system is only suitable for dealing with relatively small fluctuations in the
demand pattern in the final assembly line. The system is only relevant to a repetitive
manufacturing situation and large changes in demand cannot be accommodated within it.
If is not possible to arrive at a stable master schedule for the end level items in the bill of materials,
the Kanban system cannot be used. Small fluctuations in the demand can be handled by increasing
the circulation frequency of the kanbans, by increasing overtime, or by hiring temporary operators.
Relationship to Vendors
If the flow of kanban cards back through the production process is followed logically, it is clear
that, ultimately, the incoming raw material and the purchased parts point is reached. This leads to
the question of how the Kanban system might be extended to outside vendors. On the one hand, we
can have large inventories of each part, which are replenished by suppliers at weekly, or perhaps
longer, intervals. However, this defeats one of the essential purposes of JIT, which is to reduce
inventories. On the other hand, we can carry the Kanban process right out and into the vendors'
production systems. This procedure normally involves regular and frequent deliveries from the
vendors and is achieved through the establishment of close cooperation with suppliers and the
sharing of as much information as necessary to help the suppliers' organizations achieve a JIT
system. In effect, it involves establishing a true partnership with trusted suppliers .
Kanban as a Productivity Improvement Technique
If the procedures of Kanban outlined earlier are followed rigorously, the level of work in progress
inventory can be controlled by the number of cards issued for each component part into the system.
This is because each card corresponds to one standard container and, knowing the size of the
container and the number of cards on the floor, a simple calculation gives the inventory level.
Therefore, by reducing the number of cards issued for a particular part, the process inventory
level for that part falls. Eventually, if the levels are reduced low enough, a work center will run out
of material and stop processing. This stops the whole line and major efforts are made to get it
running at the lower level of inventory, by either increasing the number of operators, reducing setup times, or redesigning processes.
The thinking is as follows. Unnecessarily high inventory serves to disguise inherent problems
and sources of inefficiency in the production process. Through gradual reduction of inventory
levels, production problems are highlighted and are progressively eliminated.
Assumptions Necessary for Kanban to Work
As indicated above, strict rules must be followed to enable the Kanban system to work efficiently
and effectively. Corresponding to these rules are some fundamental assumptions about the nature of
the manufacturing system, within which the Kanban system operates. We will now briefly revisit
these assumptions.
Since each daily assembly schedule must be very similar to all other daily schedules, it is
essential that it is possible to freeze the master production schedule for a fixed time period, possibly
of at least one month. The final assembly schedule must also be very level and stable. Any major
deviations will cause a ripple effect through the production system causing upstream work centers
to hold larger inventory stocks. What is required ultimately is that the manufacturing system
conform as closely as possible to the repetitive manufacturing system model outlined earlier.
To run a mixed model system effectively requires mixed model capability in all stages of the
production process. Mixed model manufacturing and assembly involves frequent changes and
set-up at the individual work centers. It follows that the set-up times in all work centers be as small
as possible and that the set-up procedures be continuously reviewed to this end. A logical
conclusion from this is the need for balancing between all operations in order to synchronize the
starting and ending of work routines. This ensures that parts are fed to the assembly line at the same
rate as they are consumed.