Kanban

Wouldn't it be great if whatever you needed
was right there waiting for you?
No running around trying to find
supplies at the last minute.
No missed deadlines because resources
weren't lined up.
And no emotional energy wasted trying to figure
out who used the last of the copy paper, and didn't order more.
You could go to extremes to avoid this problem.
You could order enough copy paper to fill the whole storeroom,
or have enough supplies inventory on hand to fulfill orders for
the next six months. But this type of "over solution" is a poor
use of financial resources and space.
What if there was a way to ensure you always
had the necessary resources available when you needed them? The
Japanese, pioneers in efficiency, developed the Kanban system
to do just this.
Kanban in Practice
Kanban was developed as a means of fulfilling a just-in-time (JIT)
inventory system. By implementing kanban, your materials and
supplies arrive right when you need them. This decreases your
storage and carrying costs.
Kanban is largely associated with manufacturing.
A major concern in manufacturing is the need to have a ready supply
of materials, without incurring unnecessary inventory holding
costs. But it can also be applied in a nonmanufacturing environment,
where the efficiency of your workflow depends on having resources
available.
The term 'kanban' combines the Japanese words 'kan,' meaning
'visual' and 'ban,' meaning 'card' or 'board.' A kanban is a
visual card or other cue that signals something is needed. It is a
"pull" system, where supply is determined by the manufacturer or
user.
Kanban Cards
One of the most common applications of kanban is a bin system with
cards. Here is a simple example of how a two-bin kanban system
works.
You have one bin on the plant floor that contains the
manufacturing supplies, and one bin waiting in supplies inventory.
Each bin has a card with production details. When the bin in the
plant is empty, the bin and the kanban card are taken to supplies
inventory. The bin and kanban card waiting in supplies are taken
to the floor to replace the empty bin. The empty bin is sent to
the supplier, who fills it and sends it back to supplies
inventory.
The bins form a loop, as shown in Figure 1 below. An empty bin
signals a replacement and a refilling. You determine how many full
bins are waiting in inventory, and the kanban triggers the motions
required to keep the bins full.

Depending on the complexity of the manufacturing process and
kanban system, you can have many different cards in use. You can
send a bin and card from machine to machine and from department to
department, depending on how many control points you want to
maintain.
Kanban Cues
Instead of using actual bins and kanban cards, you can use kanban
cues that have the same effect.
For example, think of a production line where water is bottled.
The line needs a continuous supply of bottles. A kanban at the bin
that feeds bottles to the line might be a thick red line that
marks the halfway point in the bin. When the bottle level drops to
where the red line is visible, that is the cue to the operator to
unload more bottles.
The operator gets his bottles from a pallet next to his
workstation. When that pallet is empty, that is the kanban for the
forklift operator to deliver another skid of bottles.
When one skid of bottles is left in raw materials inventory, that
is the kanban for the logistics manager to order more bottles.

As in this example, you can use a kanban as both a signal of what
is needed and a trigger for a series of actions that makes sure
what it needed is always available. The power of the system is
that it provides rapid response to an uncertain demand. This
eliminates the need for you to be overprepared and lets you use
the system to maximize your efficiency.
You can also use kanban to empower employees.
Rather than having to be told what to do, the kanban puts responsibility
in their hands. This creates a sense of pride and ownership and
often leads to innovative changes that could only come from the
people who use the system day in and day out.
Kanbans are simple to construct once you have a good understanding
of what is needed and when. This analysis is very helpful for your
entire system, and allows you to determine where backlogs occur
and how to set up an efficient supply system.
Kanban Outside the Factory
Because kanban is about efficiency, it can apply
to many nonmanufacturing processes as well. Take the printer you
probably use in your office. If you wait until the "low toner"
warning light goes on to purchase another toner cartridge, you
risk not being able to print the final pages of a prospectus due
to your client in one hour. Instead, you could store a spare toner
cartridge with your printer. Then, when you install the new cartridge,
the kanban happens when you put the empty wrapper into the administrator's
in-tray. He or she then knows to reorder a toner cartridge.
Point-of-sale software in stores is a kanban
system. When an item is scanned at the cash register, a signal
is sent to the inventory purchasing system to decrease inventory
by one unit. When inventory for an item reaches a certain level,
the system automatically sends a notice to reorder.
You can also use a visual kanban to let people
know when an item is missing. This is helpful, for instance, when
you might not know you need something until you go to find it,
and it's not there. A tool board is a good example of this. Assign
each tool a place on the board and draw an outline around each
one. This way, you can easily see which tools are missing and
locate them before they are needed.

Key Points
Kanban creates efficient operations in just about any environment,
though it has its roots in just-in-time manufacturing. Kanban's
basic premise is to create a cue that signals something needs to
be replaced, ordered or located. With these visual cues in place,
the materials needed to get the job done are always ready and
available. These cues also eliminate the need to be oversupplied,
which promotes more efficiency within your business.
Since kanban can be applied outside manufacturing, it is
worthwhile taking a look at your processes to see where you might
be able to use visual cues to promote efficient operations.