Kanban

INTRODUCTION

Kanban is a concept related to the Lean or Just In Time (JIT) production, but these two concepts are not the same thing. Kanban is a pull manufacturing control method. Kanban is the means through which JIT is managed. Kan means "card" in Japanese, and the word "ban" means "signal". Kanban is a signaling system. As its name suggests, Kanban uses cards to signal the need for an item.

For example, in the production of a widget, the operator has two shelves, one on either side of the workplace. The raw materials arrive on one shelf and the finished article on the other. These shelves act as kanbans. The outgoing kanban signals the customer's need so that when it is empty, the operator must produce one more widget. When the operator begins work, he takes the raw material from the incoming kanban, thus signaling to the supplier that he needs more.

Kanban is frequently known as a "pull" system, as everything is pulled in response to past demand. Demand forecasts are not used in kanban systems. This is the opposite of the traditional "push" manufacturing philosophy, in which everything is made to forecasted future needs. With this in mind, it is not surprising that an important determinant of the relative merits of "push" and "pull" is the quality of the demand forecast. If forecasts are good, then the kanban system will effectively waste useful information, whereas a good "push" system will produce just the right quantities at the right times. In contexts where demand is difficult to forecast, on the other hand, the best one can do is to quickly respond to observed demand. This is exactly what a kanban system does, as a demand signal immediately propagates through the entire chain. "Push" systems often encounter serious difficulties when demand forecasts turn out to be inaccurate.

The Kanban system might be visualized as a "Three bin system" - one bin on the factory floor, one bin in the factory store and one bin at the Suppliers' store. The bins usually have a removable card that contains the product details and other relevant information - the Kanban card. When the bin on the shop floor is empty, the Kanban card is removed and given to the store. The store then replaces the bin on the factory floor with a full bin which also contains a removable Kanban card. The store then contacts the Supplier and indicates the need to replenish the Kanban card. The product also containing a Kanban card is delivered into the factory store completing the final step to the system. So it will never run out of product, providing of course, the cards are reliably collected from empty containers. It is a perfect "push-pull" that could also be described as a "loop", providing the exact amount required, with only "one" spare so there will never be an issue of "over-supply". The secret to a good Kanban system is to calculate how many Kanban cards are required for each product. Most factories use the colored board system (Heijunka Box). This consists of a board created especially for the purpose of holding the Kanban cards.

1. TYPES OF CANBAN SYSTEMS

1.1. One Card Systems

In the above diagram:

A signal is sent back from the consuming work centre to supplying work centre (or supplier). This is a signal:

a. To send some more (a transfer batch), via a buffer stock.

b. To produce some more (a process batch), at the supplying work centre.

Empty containers acting as a signal are a potential hazard as any empty container is a signal to fill it. Also occasionally containers have been known to go missing! Usually, for these reasons, the signal is separated from the container.

1.2. Input/ Output Control Kanban

This is to impose input / output control, where the signal travels directly from the end of a line or section to the preceding section or raw material stores. In this case the supply chain is treated as one unit rather than a series of linked operations. So, as one transfer batch is completed (output) another is launched on the first operation (input), thus ensuring that work in process cannot build up. However there are some special considerations required in the operation of the system, but we have used adaptations of this system to manage workflow in a number of environments including job shops.

1.3. Kanban Accumulator

In this method Kanban signals are allowed to accumulate at the supplying work centre until the production batch size is reached.

In this case buffers can be depleted or exhausted depending on the accumulation rules. Also because buffers can be exhausted, slightly higher mixes can be accommodated.

1.4. Dual Card System (2 card system)

This method, first used by Toyota, separates the replenishment (send some) signal, which is produced from the Kanban system, from the "produce" signal, which is produced by a scheduling system such as MRP.

* MRP says which job is next.

* The Kanban says make it now.

This method can deal with higher mixes. It can also deal with larger batch sizes, caused by long changeovers, where scheduling is necessary.

1.5. Variable Quantity (fixed frequency) System

In some situations it is more convenient to replenish items used, by fixed frequency deliveries (or collections), rather than respond to fixed quantity replenishment requests. This method forms the basis of supplier "top up at point of use" systems, where a supplier visiting your point of use will top up stocks to a predefined maximum level.

1.6. POLCA System ("Quick Response Manufacturing")

This is mentioned for completeness only and is said to be prescribed for high-mix, variable-route, and situations.

2. ATTRIBUTES OF KANBAN SYSTEMS

Some champions of Kanban Systems suggest that the system is universally applicable and has no disadvantages. This is not true! There are some circumstances where they can be positively harmful. Also if they are not designed and managed correctly, disastrous! The system does have advantages and disadvantages and some of these are: