Kanban

Kanban is the most widely used pull signal in lean manufacturing, and the simplest. It was developed inside Toyota in the 1950s by Taiichi Ohno, who reportedly took the idea from American supermarkets: shelves are restocked when customers take items off them, not when the store predicts what they might buy. A kanban card is the manufacturing version of that empty shelf space. When a card moves, the system makes more of the part the card represents. When the card sits still, nothing is made.

"If the card is not moving, the part is not needed. That is the whole rule."

How kanban works

A kanban system has three things: a defined quantity of material, a card attached to that material, and a rule about when the card moves. The defined quantity is usually a bin, a pallet, a tote, or some other physical container. The card is the signal. The rule is what makes the system pull rather than push.

In the most common version, a two-card replenishment loop runs between a consuming process and its supplier process. When the consumer empties the first bin, the card on that bin travels back to the supplier as a signal to make or deliver more. The consumer keeps working from the second bin. By the time the second bin is empty, the first one should be back, refilled, with its card. If it is not, the line stops or the loop is undersized. That feedback is the system telling you something.

The cards themselves carry the minimum information needed to act: part number, quantity, source location, destination location, sometimes a barcode or QR code for scanning. They are physical because physical cards do not lie. A bin with no card on it cannot be requested. A card with no bin attached is a problem someone has to fix before it gets buried.

The system extends beyond the shop floor. Many small manufacturers run external kanban with their distributors: when the bin is empty, the card or a scan of it goes to the supplier, who delivers the next bin. This replaces purchase orders, forecasts, and the constant back-and-forth of stock-checks. The supplier sees the same signal the operator sees.

Where kanban fits on the shop floor

Imagine a 30-person contract machine shop making aluminum housings for a regional pump manufacturer. The shop runs three steady SKUs, plus a long tail of small custom jobs. Before kanban, the steady SKUs are scheduled out of an ERP and built in 200-piece batches every two weeks. WIP sits between operations for days. Sometimes the welder runs out of brackets and waits; sometimes there are five bins of brackets in the way.

A kanban rollout would start with the steady SKUs. Two bins between each station, each holding a half-day of work, each with a card. The rule is enforced for a few weeks: nothing gets made unless a card has come back. Within a month, WIP between the steady operations drops by half. The welder stops running out. The space freed up gets used for the small custom jobs, which still run by traditional schedule because their demand is too sporadic for kanban.

That is what kanban looks like in a real small shop. It does not replace every system. It replaces the parts that are repetitive enough to deserve a steady rhythm, and lets the irregular work stay on the side.

Common mistakes with kanban

• Installing software without the discipline. A digital kanban that does not stop work when the card is missing is not kanban. It is a status dashboard.
• Sizing the cards wrong. Too few cards starves the line; too many turns the system back into push. Recalculate sizing every quarter as demand shifts.
• Letting expediting overrule the cards. The first time a manager phones the supplier and skips the card, the loop breaks. Once or twice is forgivable. A habit is fatal.
• Running kanban on unstable demand. Kanban works for repetitive parts. For sporadic or one-off demand, a different mechanism is appropriate. Sequenced pull or build-to-order, not kanban.
• Skipping the visual. A card system you cannot see across the shop floor loses half its value. The point is that anyone walking past knows what is needed without asking.

Kanban and related Lean tools

Kanban is the system; the kanban card is the physical signal that runs through it. On the shop floor, kanban often shows up alongside a kanban board for tracking the state of cards in motion. Kanban is the canonical mechanism behind a pull system and the operating logic of just-in-time production.