Kanban, i.e. a few key principles of inventory control without the need to expand warehouses

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Kanban, i.e. a few key principles of inventory control without the need to expand warehouses

Developed by the Japanese, the kanban (Japanese word for signboard) method was created seven decades ago. It applies to production and supply control. In fact, it is based on the establishment of a system for communicating information on planning, the allocation of tasks and their preparation and implementation. Control is also an integral part of this.

The first solution called kanban was described in 1947 by Taiichi Ohno, an employee of Toyota Motor Corporation. “It is necessary to organise the flow of materials in production according to the principle of a supermarket, the consumer takes a certain amount of product from the shelf, and the noticed gap is immediately filled,” this is how the kanban idea was explained by Taiichi Ohno.

One of the key reasons for the implementation of kanban in Toyota was then its relatively low productivity in relation to the American giants in the automotive industry. The Japanese did not perform well against the competition, and the implementation of the kanban idea was supposed to change this, according to its propagators.

The idea was clear: to find a way to increase the possibility of delivery without the need for a significant expansion of the warehouses. This would, of course, entail a reduction in costly stocks of raw materials and semi-finished products. However, in order to minimise these costs, a flexible and efficient production system was needed.

Kanban is an organisation of production in such a way that each unit produces exactly as much as it is needed in a given moment. In this method, stock control was identified as a critical factor in the management of materials.

The importance of the kanban system is often presented as the implementation of the “7 times no” rule.


– no shortages, – no delays, – no supplies, – no queues, – no inactivity, – no unnecessary processes or control operations, – no movements.

Theoretically, the matter seems to be simple and obvious, but in practice, it can be quite different. The issue may mainly be about the organisation of supplies. A characteristic feature of the method is the practical elimination of pre-production warehouses (the only reserve is at the workstation, which is relatively small). For many companies, this means a real “revolution”.

Production orders are closely synchronised with orders received from customers. Materials and semi-finished products are delivered with hourly accuracy from suppliers, and thanks to the capacity reserves and flexibility of the production process, it is possible to produce almost any part at any time.

In order to effectively implement the kanban system, material handling may require a number of changes in a specific company.

These changes need to be made so that:

– the production process is continuous and the products are, where possible, maximally standardised

– transport cycles are as standardised as possible because this allows logistics to be planned in such a way as to reduce stocks (e.g. the use of a milk run route)

– the volume of production is realistic, only then can stocks be reduced

– fluctuations in production are eliminated as far as possible, and it is particularly important to plan for the final stage of production

– conditions are created to control material flow by means of kanban cards (each produced/storage element should have a unique name, index and place of storage; the data should concern both products and materials and containers or transport pallets)

– optimum container management is possible (storage of containers in the workplace also costs money, the thing is to reduce these costs)

The whole system must be simple and transparent in order to reduce the risk of errors as much as possible.

The Lean Enterprise Institute Polska stresses that Kanban is, in fact, the control of production according to the principles of Lean Manufacturing. Kanban is coupled with time, pull production and levelled scheduling, which in practice enables the implementation of the just in time principle.

Usually, kanban is used to indicate when a given item will be used (consumed) for production. The Lean Enterprise Institute, however, points out that kanban differs, in several respects, from traditional methods of production control. In traditional manufacturing, the production schedule is adapted to each individual process and each process produces according to this schedule (no synchronised feedback from the processes with information on exact needs).

Meanwhile, kanban is, in fact, a physical scheduling tool, closely linking and synchronising activity at the various stages of supply and production. It controls material movements, taking into account both time and quantity, depending on the signals from the process.

It prevents overproduction and helps to reduce inventory

According to Art Smalley, the author of “Creating Level Pull” (published by Lean Enterprise Institute Polska), kanban helps in particular with the following:

– it prevents overproduction (and excessive movement) of materials between production processes;

– it delivers specific production orders to processes based on replenishment rules (this is achieved by managing both the synchronisation of material movement time and the amount of material moved);

– it can be used by production supervisors as a visual control tool to determine whether production is ahead of schedule or late (a glance at the locations where kanban collection boxes are kept shows whether materials and information flow in a time-synchronised and timely manner as planned);

– it can be a tool for continuous improvement (each kanban represents the stock container in the value stream; the planned reduction in the number of kanbans in the system over time means a direct reduction in stock and a corresponding reduction in the time needed for the transition from raw material to the customer).

Photo: Pixabay

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