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KANBAN CARD: System for Using Kanban Cards

Updated on May 7, 2014
An illustration of the kanban system
An illustration of the kanban system | Source

What is a Kanban System?

A Kanban system is a method of coordinating internal and external processes by signalling the correct sequence of actions within an organization so as to effectively utilize the available capacity without waste.

Kanbans originated in the lean production system championed by Toyota and the term comes from the Japanese words “KAN” which means “VISUAL” and “BAN” which means “CARD”. It is therefore a visual card which serves as a communication tool to trigger required actions such as supplying to processes.

Kanban cards

As used within a lean system, Kanban cards are important in driving the pull system of production which demands that processes to produce what is needed, at the right time and in the right quantities. The pull system is driven by the true requirements of the customer that all processes within an organization must be aligned to.

When the internal processes produce as per customer demand, waste is reduced, delivery enhanced and quality improves dramatically which eventually leads to improved business results.

The use of Kanban cards enables an organization to schedule production activities in such a way that the flow of raw materials and finished goods is in sync with the demands of the customer which results in very little work-in-process inventory.

This smoothened flow of materials using Kanban cards benefits the organization because every process knows what is supposed to be produced without resorting to complex enterprise resource planning systems.

How Kanban cards work

Though there are many systems of signalling to processes the type, quantity and time when material should be pulled, the most ubiquitous form is a Kanban card. The key here is not whether the signalling device is a physical card or an electronic signal, but whether there is a system of prompting processes to move in a particular direction or taken a certain action.

The following are examples of kanbans that achieve the same result irrespective of their type:

  • Electronic kanbans such as software that is linked to the inventory system trigger an action such as a raw material replenishment request to the upstream processes. These types of Kanban can also be e-mails which must be sent before a process takes a particular action.
  • Container kanbans contain a standardized quantity of material are sent back to the replenishment process once they are empty. The containers have all the details that are required to replenish them such as quantity and location to be sent to.
  • RFID tags on materials are used to monitor electronically the movement and consumption thereby triggering certain actions when replenishment levels have been reached.
  • Boards visually display the status of processes together with other information for the processes to take actions when set conditions are met. For example, the boards will have the quantity to be produced and when to stop further production. They can also contain information on the maximum and minimum production levels
  • Sensors that are able to detect the inventory levels send that information to the process that consume or produce that material. That information will tell the process when to stop producing or when to start producing depending on the inventory levels.

When using Kanban cards, it is important that the following information is always available on the card for effective communication:

  • Standard quantity is the amount of inventory that the Kanban card represents. Since it can sometimes be difficult for each unit of inventory to have its own Kanban, the best practice is to have one Kanban represent a certain amount of inventory.
  • Storage location of the material represented by the Kanban card. This is important for the ease of access to the material in case there is a need for replenishment and also so as not to waste time searching for it.
  • Destination address of the Kanban card after it has been used to trigger the required action. This is most likely a Kanban post that is located near the storage location where the cards are collected for sorting and allocation to the right material.
  • Name of customer process for which the material is intended removes confusion as to its intended use. This is very important considering the fact that efficiency and effectiveness is a key consideration in a lean production system and any waste of time searching for material is frowned upon.
  • Name of supplier process is important so that replenishment can occur in the most efficient manner without wasting time in searching.
  • Re-order level shows the amount that will trigger a replenishment of the material. Other related information such as safety stock and buffer stock may also be included here
  • Lead time indicates the total time it takes to produce a set quantity of the item in question. This metric is used to calculate the number of cards that may be required at any particular time and may change depending on any process improvements that are carried out in the course of lean implementation.
  • Kanban card number is used as an audit device to know if all the cards are in the system because a loss or unintended introduction of Kanban cards into the system will result in the system not working as planned.

Example of the Kanban system in a Supermarket

To better understand how the Kanban system works, let us look at a typical example of a supermarket inventory management system. There will be a Kanban system that involves the material in the shelf as well as that in the storage area.

This information will be used to communicate to these processes on the status of material levels as well the amount required for replenishment. The products on the shelf have Kanban cards that indicate the re-order level.

When this level is reached, the Kanban card moves to the storage area and is replenished using the amount indicated in the card. The products in the store also have their Kanban cards which are used to trigger an order from the suppliers.

It is clear to see how Kanban cards are effective in communication within processes and in maintaining a balanced operation. Without a Kanban system, the supermarket will occasionally run out of the products that it most needs and will have excess stocks of products that it requires only in small amounts.

Rules for Using the Kanban System

The use of the Kanban system requires discipline, without which it will fail miserably. For there to be discipline in the use of Kanban cards, the following rules must be followed to the letter:

  • Only the amounts in the Kanban should be withdrawn, no more no less.
  • Only the quantities in the Kanban should be produced to avoid wastage or downtime
  • Communication should only be through the use of a Kanban card
  • All products must have a Kanban card and there should be no movement without it
  • Never produce, accept or pass on a defective product to the next process
  • Gradually reduce the number of Kanban so as to exposed systemic failures which is a good opportunity for further improvement

The advantages of using this system have been proven over and over again but as mentioned above, it requires discipline and commitment by everyone in the system. It must also be noted that the Kanban system is a mere tool and what is important is the principle that drives it and not the tool per se.

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