1. KANBAN

2. Kanban Definition
What is Kanban?
• Card system that controls production & inventory
• Visual “pull” system vs. a “black box” push system (ie - MRP)

3. WHAT IS KANBAN?
• DEVELOPED AT TOYOTA 1950S TO MANAGE LINE MATERIAL
FLOWS.
• KANBAN ( KAN=CARD, BAN= SIGNAL )
• SIMPLE MOVEMENT SYSTEM
– “CARDS” TO SIGNAL & COMMUNICATE REORDER
INFORMATION
– BOXES/CONTAINERS TO TAKE “LOTS” OF PARTS FROM ONE
WORK STATION TO ANOTHER (CLIENT-SERVER).
• SERVER ONLY DELIVERS COMPONENTS TO CLIENT WORK
STATION AS & WHEN NEEDED (CALLED/PULLED).
• MINIMISE STORAGE IN THE PRODUCTION AREA.
• WORKSTATIONS ONLY PRODUCE/DELIVER COMPONENTS WHEN
CALLED (THEY RECEIVE CARD + EMPTY CONTAINER).
• THE WORK-STATION PRODUCES ENOUGH TO FILL THE
CONTAINER
• KANBAN = AN AUTHORIZATION TO PRODUCE MORE INVENTORY
• WE THUS LIMIT THE AMOUNT OF INVENTORY IN PROCESS.

4. WHAT IS KANBAN
• TECHNIQUE FOR WORK AND INVENTORY RELEASE
• MAJOR COMPONENT OF JIT AND LEAN MFG
• DEVELOPED BY TOYOTA TO MANAGE MATERIAL FLOW IN
ASSEMBLY LINE
• KANBAN STANDS FOR KAN – CARD BAN - SIGNAL
• ESSENCE OF KANBAN IS SUPPLIER , WAREHOUSE ,
MANUFACTURER SHOULD DELIVER COMPONENTS ONLY
WHEN THEY ARE NEEDED SO THAT THERE IS NO EXCESS
INVENTORY
• WITHIN SYSTEMS WORK STATIONS LOCATED ALONG
PRODUCTION LINES AND PRODUCE ONLY THE DESIRED
COMPONENTS WHEN THEY RECEIVE A CARD AND AN
EMPTY CONTAINER WHICH INDICATES MORE PARTS ARE
NEEDED IN PRODUCTION

5. WHAT IS KANBAN
• TWO BIN SYSTEM WHERE REORDER CARD
PLACED AT BOTTOM OF FIRST BIN
• WHEN BIN IS EMPTY A THIRD PARTY SUPPLIER
OR PREVIOUS WKSTN USE THE REORDER CARD
TO REPLENISH BIN
• SECOND BIN IS EMPLOYED SUCH THAT WHEN
FIRST BIN IS REPLENISHED SECOND BIN IS
READY FOR REPLENISHMENT
• NO REPLENISHMENT WOULD TAKE PLACE
WITHOUT REORDER CARD ENSURING THAT
OVERSTOCKING DOES NOT TAKE PLACE

6. WHAT IS KANBAN
• INCASE OF INTERRUPTION
MEASURES ARE TAKEN SO THAT
EACH WKSTN WILL ONLY PRODUCE
ENOUGH COMPONENTS TO FILL
CONTAINER
• KANBAN LIMITS AMOUNT OF
INVENTORY IN THE PROCESS BY
ACTING AS A AUTHORIZATION TO
PRODUCE MORE INVENTORY

7. WHAT IS KANBAN
• AS KANBAN IS A CHAIN PROCESS IN WHICH
ORDERS FLOW FROM ONE PROCESS TO
ANOTHER, PRODUCTION OF COMPONENTSARE
PULLED THRU THE LINE
• IN JIT SYSTEMS COMPONENTS ARE NEEDED FOR
FINAL ASSEMBLY ;THEY ARE PULLED IN SMALL
BATCHES FROM THE SUPPLYING WORKSTATION
• KANBAN IS A CRITICAL COMPONENT OF JIT
• EMPLOYED WITHIN PRODUCTION PULL SYSTEM
TO MAINTAIN PROCESS SUPPLY

8. WHAT IS KANBAN
• IN CASE OF LINE INTERUPTION MEASURES TAKEN SO
THAT EACH WORK STATION ONLY PRODUCES ENOUGH
COMPONENTS TO FILL CONTAINER AND THEN STOP
• KANBAN LIMITS ACCUMULATION OF INVENTORY IN WIP
BY ACTING AS AN AUTHORIZATION TO PRODUCE MORE
• KANBAN IS A CHAIN PROCESS IN WHICH ORDERS FLOW
FROM ONE PROCESS TO ANOTHER
• PRODUCTION OR DELIVERY OF COMPONENTS PULLED
THRU PRODUCTION LINE
• IN JIT SYSTEMS WHEN COMPONENTS/PARTS NEEDED FOR
FINAL ASSEMBLY , THEY ARE PULLED IN SMALL BATCHES
FROM SUPPLYING WORK CENTRES

9. WHAT IS KANBAN
• KANBAN WORKS AUTOMATICALLY IN PULL SYSTEM
(CUSTOMER DRIVEN)
• KANBAN SHOWS
-WHAT PARTS TO MFG
-WHEN TO START MFG
-HOW MUCH TO MFG
• EMPLOYED WITHIN A PRODUCTION PULL SYSTEM TO
MAINTAIN PROCESS SUPPLY
• SYSTEM EMPLOYS SIGNALS TO LINK PROCESSES THAT
ARE USED TO REPLENISH STOCKS BASED ON CUSTOMER
USAGE
• SIZE OF KANBAN CONTAINER NO MORE THAN 10 OF DAILY
DEMAND AND STANDARDIZED IN SIZE
• KANBAN SUITED FOR PRODUCTS WITH HIGH VOLUME

10. WHAT IS KANBAN
• KANBAN AUTHORIZES OUTPUT FROM
DOWNSTREAM OPERATIONS BASED ON
PHYSICAL CONSUMPTION
• CAN BE A CARD , FLAG, SIGNAL
• USED WITH FIXED SIZED CONTAINERS
• KANBAN QUANTITIES ARE FUNCTION OF LEAD
TIMES AND CONSUMPTION RATES OF ITEM
BEING REPLENISHED ( MIN QTY = (LEAD TIME
DEMAND + SAFETY STOCK)/CONTAINER QTY)

11. What is the Kanban System?
A Card System is used to monitor work-in-process
• A withdrawal Kanban
• A production Kanban
• A vendor Kanban

12. Kanban System
6-12

13. Kanban Cards
6-13

14. • Kanbans are All Around Us
• Kanbans are Inventory
• Inventory Is waste (costly!)
• Goal Is To Minimize Inventory In
Kanbans And Eliminate If Possible
Basic Kanban (Pull signal)Basic Kanban (Pull signal)
Ultimate Goal of Kanban is to notUltimate Goal of Kanban is to not
have a KANBAN !have a KANBAN !
One-Piece Flow is the Answer !One-Piece Flow is the Answer !

15. The Kanban Process
Withdrawal
Store
LCD Screen
Withdrawal
Lot with P-Kanban
Production
Ordering Post
(6) Signal
LCD Assembly
Remove
(4) P-Kanban
Attach
(5) Attach
W-Kanban
(1) Remove
W-Kanban
Attach
Withdrawal Post
(2), (3)
(7)
Final Assembly
(1)

16. Kanban Production Control
• At the core of JIT manufacturing at Toyota
is Kanban, an amazingly simple system of
planning and controlling production
• Kanban, in Japanese, means card or
marquee
• Kanban is the means of signaling to the
upstream workstation that the downstream
workstation is ready for the upstream
workstation to produce another batch of

17. Kanban Systems
• Logistical ropes connect the various work
stations and drive their JIT systems.
• Set up MPS which is determined by market
demand.
• The projected daily demand for each
product is the amount that is scheduled to
be produced for that day.

18. Kanban Systems, cont.
• The smoothed production schedule is then
set for a fixed period of time-normally one
month.
• Then final assembly is scheduled in order to
meet the daily production requirements.

19. Kanban Systems
Can use different methods to trigger replenishment
activity
– kanban cards are the most common
– kanban containers are frequently used
– bar coding of cards / containers helps when
automating kanban systems

20. Kanban Systems
Not suited for all inventory items – look for
– items with frequent usage
– items with short lead times
– items with “willing” suppliers

21. 21
KANBAN Prodn Control
Kanban:
• Card or other device that communicates
demand for work or materials from the
preceding station
• Kanban is the Japanese word meaning “signal”
or “visible record” card
• Paperless production control system
• Authority to pull, or produce from a
downstream process

22. 22
Kanban is not for everybody
• The conditions necessary for Kanban to
work well are:
– “Smooth” production involving a stable product
mix
– Short setups
– Proper machine layout
– Standardization of jobs
– Improvement activities
– Autonomation (autonomous defect control)

23. 24
Kanban Production Control System
• Kanban card indicates standard quantity of
production
• Derived from two-bin inventory system
• Kanban maintains discipline of pull production
• Production kanban authorizes production

24. 25
A Sample Kanban

25. 26
The Origin of Kanban
a) Two-bin inventory system b) Kanban inventory system
ReorderReorder
cardcard
Bin 1Bin 1
Bin 2Bin 2
Q - R
KanbanKanban
RR
QQ = order quantity= order quantity
RR = reorder point - demand during lead time= reorder point - demand during lead time

26. • No Cards
– Visual (Tape On Floor)
– Two-Bin or Bin Systems
– Supplier Containers
– Painted floors, i.e. squares, circles
• Card Systems
– Electronic Kanbans - Fax or Emails
– Warehouse Or Parts Racks
– Kanban Boards – Magnetic or Cards
– Containers
– Flow Thru Racks
– Supplier Boxes
Kanban Options

27. Categories of Kanban
Instruction
Withdrawal
Kanban
Production Kanban
(non lot production)
Triangle Kanban
(for lot production)
Interprocess
Kanban
Supplier
Kanban

28. © 2007 Pearson Education
The Single-Card Kanban System
• Kanban means “card” or “visible record” in Japanese & refers
to cards used to control the flow of production through a
factory.
• General Operating Rules:
1. Each container must have a card.
2. The assembly line always withdraws materials from fabrication
(pull system).
3. Containers of parts must never be removed from a storage area without a
kanban being posted on the receiving post.
4. The containers should always contain the same number of good parts. The
use of nonstandard containers or irregularly filled containers disrupts the
production flow of the assembly line.
5. Only nondefective parts should be passed along.
6. Total production should not exceed the total amount authorized on the
kanbans in the system.

29. Two card Kanban System
• Toyota, which uses a dual-card kanban
system, has its own inbound and outbound
material storage areas.
*inbound stock area- holds material that is
ready for processing at the work station.
*outbound stock
area- material that has been processed and
is stored until needed at the next
downstream station.

30. 31
Kanban Example
Workcenter B uses parts produced by Workcenter A
How can we control the flow of materials so that B always
has parts and A doesn’t overproduce?

31. 32
When a container is opened by Workcenter B, its kanban card is
removed and sent back to Workcenter A.
This is a signal to Workcenter A to produce another box of parts.
Kanban card: Signal to produce

32. 33
Empty Box: Signal to pull
Empty box sent back. Signal to pull another full box into
Workcenter B.
Question: How many kanban cards here? Why?

33. 34
Types of Kanbans

34. 35
Types of Kanbans

35. 36
Types of Kanbans

36. 37
Types of Kanbans• Kanban Square
– Marked area designed to hold items
• Signal Kanban
– Triangular kanban used to signal production at the
previous workstation
• Material Kanban
– Used to order material in advance of a process
• Supplier Kanbans
– Rotate between the factory and suppliers

37. freeleansite.com
Production or (In-Process)-Kanban
– Provides production instructions for the work center
– Tells the workers exactly the quantity and the type of part to
produce
– Used for work centers that produce only one part number or
have minimal setups in spite of multiple part number
production
• Rectangular – one piece flow production
• Triangular – for small lot production
Withdrawal-Kanban
– Inter-Process Kanban
• Delivers order for parts from a preceding process
• Specifies quantity and type of parts to deliver from Location
A to Location B
– Later replenishment system – kanban are filled from
suppliers finished goods shelf
– Sequenced withdrawal – supplier sequences parts in
reverse order for truck loading
– Supplier Kanban
• Same as an inter-process Kanban, except it signals
conveyance of part from an outside supplier
Kanban Types

38. freeleansite.com
Job order-Kanban
– Issued for each job order
Through-Kanban
– When two processes are very close, it doesn’t make sense to issue two
Kanbans. Used where one process directly feeds (conveyor) the next
process.
Common-Kanban
– Where a withdrawal kanban is used as a production ordering kanban if
the distance between two processes is very short and share the same
supervisor.
–
Emergency-Kanban
– Temporary, when there is a defect or problem, can be withdrawal or
production
Other Kanban Types

39. freeleansite.com
• Never Pass on A Bad Part
• The Parts Are Always Withdrawn From The Prior
Process
• Produce Only What Is Necessary To Replenish The
Quantity Withdrawn
• Level Load Production, Rapid Changeover, Small Lot
Production, Zero Defects
• Kanban Is Used To Fine Tune (Not Provide For Major
Changes)
• The Process Must Be Capable Of Producing Good Parts
(Rational And Stable)
• Need Efficient Methods Of Transportation, Shortest
Routes Possible
• Disciplined Organization
• Nothing Is Made or Transported Without A Kanban.
• Kanban Cards Always Accompany the Parts
Themselves.
• The Number of Kanbans Should Decrease over time.
Rules of the Kanban

40. 41
Determining Number of Kanbans
where
N = number of kanbans or containers
d = average demand over some time period
L = lead time to replenish an order
S = safety stock
C = container size
No. of Kanbans =
average demand during lead time + safety stock
container size
NN ==
dLdL ++ SS
CC

41. 42
Determining the Number of
Kanbans
d = 150 bottles per hour
L = 30 minutes = 0.5 hours
S = 0.10(150 x 0.5) = 7.5
C = 25 bottles
 Round up to 4 (to allow some slack) or down to 3 (to force
improvement)
ContainersorKanbans3.3=
+
=
+⋅
=
+
=
25
5.775
25
5.7)5.0150(
C
SdL
N
Solution

42. 44
Product Specific
One-card Kanban System
Product Z
after process A
Process A
Process B
Process C
Process A+B+CProcess A+B
Finished
product X
Product X
after process A
Finished
product Z
product X kanban card
Process A
Location after
process A

43. 45
Signals From Parts And Cards
Product Z
removed
from FGI
Product Z
Kanban card
put up at C
Z
1
Authorizes
another
product Z
to be started

44. 46
More details……process B & C
Z
Completed Z after process C goes with card to FGI
Z
1
Z
1
Z kanban put up at B to schedule production of
another Z product
C removes partially completed Z from input buffer

45. 47
Moving further upstream….
Completed Z after process B goes with card to output buffer
Z
1
Z kanban put up at A to schedule production of another Z product
Z
1
B removes partially completed Z from input buffer

46. 48
Last step……...
Z and kanban card placed in step A output buffer
process step A creates product Z

47. 49
Idle state
• No kanban cards at any process stage
– No production occurs
– Removing an X or Z from FGI would restart process

48. 50
Kanban work authorization• If this is state, who’s authorized to work on a Z?
1. A
2. B
3. C
4. A,B
5. B,C
6. A,C
7. A,B,C
8. none

49. 51
Scheduling Kanban systems
• Each stage has its ‘own schedule’ of
Kanbans
• This schedule is determined at the Kanban
system design stage
• Production is indirectly scheduled by
Kanban

50. 52
Kanban Control System
• Kanban card indicates standard quantity of
production
• Derived from two-bin inventory system
• Kanban maintains discipline of pull production
Q = order quantity
R = reorder point
= demand during lead time
Bin 1 Bin 2
Q - R
R
Reorder
Card
Kanban
a. Two-bin inventory system b. Kanban Inventory System

51. 53
Kanban Control System
• Once implemented, a Kanban system acts a control
system rather than a scheduling system
• It implements a repetitive schedule embedded in
the system
• This schedule can be generated by a scheduling
algorithm
• Simulation can be used to determine the number of
Kanbans, queue size, etc.

52. 54
Kanban Control Systems• Roles of Kanban
– To indicate what is needed at which production stage
– To allow various stages to efficiently communicate with
each other
– The information can be obtained from the Kanbans
• Product name
• Code
• Volume
• Preceding stage and subsequent stage (From .. To ..)
• Process
– Company’s production plan is given only to the final
line

53. 55
General Kanban SystemOp1: when demand from stage i+1 occurs, withdraw a Kanban and
place it on the dispatching board
Op2: production activity initiates when a Kanban is placed on the
dispatching board
Op3: simultaneously,
demand is sent to stage
i-1 if demand occurs at
stage i
Op4: completed parts with
Kanbans are sent to
stage i+1

54. 56
Operations Principles of
Kanban Systems
• Move a Kanban only when the lot it represents is consumed
• No withdrawal of parts without a Kanban is allowed
• Kanban should always be attached to the physical parts (box)
• Do not send defective parts to the succeeding stages
• Withdraw only the parts needed at each stage
• Produce the exact quantity of parts withdrawn
• The # of parts issued to the subsequent process must be the exact
number specified by the Kanban
• Avoid complex information and hierarchical control systems

55. 57
Dual Kanban system
Using production and
withdrawal Kanbans

56. 58
Dual Kanban system
Process
A
Process
B
P
W Container with withdrawal kanban
Container with production kanban
PWP
X
X
X
X X
Flow of work
Flow of kanban

57. Minimizing Waste: Kanban Control
System
Bin
Part A
Bin
Part AMachine
Center
Assembly
Line
Material Flow
Card (signal) Flow
withdrawal kanban
production
kanban

58. A Two-Card Kanban JIT Operating System

59. Kanban Systems, Cont.
• Conveyance kanban- a card that identifies
needed material, the feeding workstation,
and the receiving workstation.
• Production kanban- Is the signal and
authority for the work station operators to
replenish the materials just forwarded to the
from the outbound stock area.

60. Kanbans and Other Signals
• There are two types of Kanban cards:
– a conveyance card (C-Kanban)
– a production card (P-Kanban)
• Signals come in many forms other than
cards, including:
– an empty crate
– an empty designated location on the floor

61. Kanban System
The number of Kanban cards is directly proportional to
the amount of work-in-process inventory.
Managers and employees strive to reduce the number
of cards in the system through reduced lead times (p or
w), lower α values, or other improvements.
WIP inventories are similar to the water level in a lake.
High levels hide critical inefficiencies. By reducing
inventories, inefficiencies are exposed and must be
solved using a JIT system.

62. Number of Kanban Cards Required:
K = d(p + w)(1+ α) [17.1]
C
where K = the number of Kanban cards in the operating system.
d = the average daily production rate as determined from the
master production schedule.
w = the waiting time of Kanban cards in decimal fractions of a
day (that is, the waiting time of a part).
p = the processing time per part, in decimal fractions of a day.
C = the capacity of a standard container in the proper units of
measure (parts, items, etc.).
α = a policy variable determined by the efficiency of the
process and its workstations and the uncertainty of the
workplace, and therefore, a form of safety stock usually
ranging from 0 to 1. However, technically there is no
upper limit on the value of α.
Chapter 17 Lean Operating Systems

63. Solved Problem
Bracket Manufacturing uses a Kanban system for a component
part. The daily demand is 800 brackets. Each container has a
combined waiting and processing time of 0.34 days. The
container size is 50 brackets and safety factor (α) is 9 percent.
a) How many Kanban card sets should be authorized?
b) What is the maximum inventory of brackets in the system of
brackets?
c) What are the answers to (a) and (b) if waiting and processing
time are reduced by 25%?
d) If we assume one-half the containers are empty and one-half
full at any given time, what is the average inventory in the
system for the original problem?
Chapter 17 Lean Operating Systems

64. Solved Problem – Solution
Using Equation 17.1:
a) K = d(p + w)(1+ α)=(800 units)(.34)(1 + .09)=5.93 ≅ 6 C
50
Thus, 6 containers and 6 Kanban card sets are necessary to fulfill daily
demand.
b) The maximum authorized inventory is K×C = 6×50 = 300
brackets.
c) K = d(p + w)(1+ α)=(800 units)(.255)(1 + .09)=4.45 ≅ 5 C
50
Thus, 5 containers and 5 Kanban card sets are necessary to fulfill daily
demand. The maximum authorized inventory is now K×C = 5×50 = 250
brackets.
Chapter 17 Lean Operating Systems

65. Solved Problem - Solution
d) The average inventory under this assumption
is 300/2 = 150 brackets.
Many variables in the JIT system determine
whether this assumption is valid or not. For
example, for a given combination of daily demand,
processing and waiting times, and other process
inefficiencies and uncertainties, it is possible for
more or less containers to be empty (full).
Chapter 17 Lean Operating Systems

66. Determining the number of kanban cards / containers
needed for each item
• An item has a 2 day lead time (when a kanban is emptied
it will take 2 days to refill it)
• Thus, you need to activate 5 kanban cards (demand during
lead time divided by kanban size)
• You will need 100 within the replenishment lead time
(average daily demand times lead time)
• Average daily usage of the item is 50 per day
• An item has a 2 day lead time (when a kanban is emptied it
will take 2 days to refill it)

67. ESSENTIAL ELEMENTS OF
KANBAN
• STOCK POINTS
• WITHDRAWAL SIGNAL
• IMMEDIATE FEEDBACK
• FREQUENT REPLENISHMENT

68. FUNCTIONS OF KANBAN
• PROVIDES PICK UP INFO
• PROVIDES PRODUCTION INFO
• PREVENTS OVER PRODUCTION
• SERVES AS WORK ORDER ATTACHED TO GOODS
• PREVENTS DEFECTS BY IDENTIFYING PROCESS
MAKING THE DEFECTS
• MAINTAINS INVENTORY CONTROL

69. How Kanban Operates
When a worker at downstream Work Center #2
needs a
container of parts, she does the following:
– She takes the C-Kanban from the container she just
emptied
– She finds a full container of the needed part in storage
– She places the C-Kanban in the full container and
removes the P-Kanban from the full container and
places it on a post at Work Center #1
– She takes the full container of parts with its C-Kanban
back to Work Center #2

70. Kanban Cards
Conveyance Kanban CardConveyance Kanban Card
Part number to produce: M471-36 Part description: Valve HousingPart number to produce: M471-36 Part description: Valve Housing
Lot size needed: 40Lot size needed: 40 Container type: RED CrateContainer type: RED Crate
Card number: 2 of 5Card number: 2 of 5 Retrieval storage location: NW53DRetrieval storage location: NW53D
From work center: 22From work center: 22 To work center: 35To work center: 35

71. Kanban Cards
Production Kanban CardProduction Kanban Card
Part number to produce: M471-36 Part description: Valve HousingPart number to produce: M471-36 Part description: Valve Housing
Lot size needed: 40Lot size needed: 40 Container type: RED crateContainer type: RED crate
Card number: 4 of 5Card number: 4 of 5 Completed storage location: NW53DCompleted storage location: NW53D
From work center: 22From work center: 22 To work center: 35To work center: 35
Materials required:Materials required:
Material no. 744BMaterial no. 744B Storage location: NW48CStorage location: NW48C
Part no. B238-5Part no. B238-5 Storage location: NW47BStorage location: NW47B

72. Containers in a Kanban System
• Kanban is based on the simple idea of replacement
of containers of parts, one at a time.
• Containers are reserved for specific parts, are
purposely kept small, and always contain the same
standard number of parts for each part number.
• At Toyota the containers must not hold more than
about 10% of a day’s requirements.
• There is a minimum of two containers for each part
number, one at the upstream “producing” work center and
one at the downstream “using” work center.

73. How Kanban systems work
• Applies the basic principles of synchronous
management.
• Principle 1: Do not focus on balancing
capacities, focus on synchronizing the flow.
• Principle 2: The level of utilization of a
non-bottleneck resource is controlled by
other constraints within the system.
• Principle 3: Resources must be utilized, not
simply activated.

74. How Kanbans work, cont.
• Principle 4: A transfer batch may not, and
many times should not, be equal to the
process batch.
• Principle 5: A process batch should be
variable both along its route and over time.

75. Why consider kanban control?
 Lower inventory investment
 Better “customer” service
 Reduced administrative costs

76. What makes kanban control different ?
• Kanban is “pull” based – driven by actual
usage not forecasts
• Kanban replenishment is simple
?

77. PULL ENTITIES IN KANBAN
• WORK CENTRE – WHEN WORK CENTRE KANBAN CHECKED OUT
SYSTEM FINDS AN OPEN WORK ORDER OR RATE SCHEDULE .
WHEN NO WORK ORDER EXISTS SYSTEM CREATES A WORK
ORDER TO FULFIL KANBAN DEMAND. WHEN KANBAN IS
CHECKED TO INDICATE REPLACEMENT AN INVENTORY
TRANSFER FROM SUPPLYING LOCATION TO CONSUMING
LOCATION OCCURS
• INVENTORY-WHEN INVENTORY KANBAN CHECKED OUT SYSTEM
CREAES INVENTORY TRANSFER TO MOVE MATERIAL FROM ITS
SUPPLYING LOCATION TO CONSUMING LOCATION eg REQUIRED
RAW MATERIAL MOVED FROM INVENTORY TO WORK
CENTRELOCATION OR SHOP FLOOR
• SUPPLIER-WHEN A SUPPLIER KANBAN CHECKED OUT SYSTEM
CREATES A PO OR INITIATES A BLANKET PO RELEASE.PO RECEIPT
FOR GOODS RECEIPT DONE WHEN KANBAN CHECKED TO
INDICATE REPLENISHMENTINVENTORY TRANSFER FROM
SUPPLYING LOCATION TO CONSUMING LOCATIO DONE

78. PULL ENTITIES IN KANBAN
• BRANCH-SYSTEM CREATES A SALES ORDER AND PO FOR ITEM.
SYSTEM RECEIVES PO CREATED
• OUTSIDE ASSEMBLY – SYSTEM CREATES SALES ORDER FOR LIST
OF COMPONENTS REQUIRED TO MAKE A PRODUCT.PO CREATED
FOR INVENTORY TRANSFER FROM SUPPLYING LOCATION TO
CONSUMING LOCATION

79. Managing Kanban Systems
How is lead time (τi) determined?
• By observation – start with “too many” kanbans in the
system. Mark the time when a kanban leaves the
output buffer to be replenished. Record when the
kanban returns to the output buffer. Record a number
of observations and find the mean and standard
deviation. To build in a safety factor, the lead time
should be calculated as the mean plus 2 or 3 standard
deviations.

80. Managing Kanban Systems
Key factors which must be in place before
implementing a kanban system:
• Demand is approximately constant over a planning period
• Small setup times
• Available, flexible capacity
• Disciplined workforce

81. STRATEGIES IN KANBAN
• REPLENISHMENT STRATEGY (VARIABLE SS , ROL , EOQ)
• ENVIRONMENT TURBULENCE INDICATORS SUCH AS
DYNAMIC CUSTOMER REQUIREMENT (CUSTOMER
FUNCTION DEPLOYMENT) , SUPPLY CHAIN TURBULENCE
(LOGISTICS)
• REQUIREMENT FOR AGILITY AND FLEXIBILITY eg MAGIC
EYE

82. TIPS FOR EFFECTIVE
KANBAN
• REPLENISHMENT PROCESS TO BE BALANCED TO
REDUCE RISK OF OVER STOCKING OR POTENTIAL
STOCKOUTS
• NO PART TO BE PRODUCED WITHOUT KANBAN
SIGNAL AND CARDS TO ALWAYS ACCOMPANY
CONTAINER FROM THE SUPPLIER SIDE UNTIL IT
IS OUT OF THE KANBAN STAGING AREA
• EACH CONTAINER MUST HAVE A SEPARATE
KANBAN CARD WITH PART NUMBER
DESCRIPTION QTY AND LOCATION OF
CONSUMER AND PRODUCER
• NO PART TO BE PRODUCED WITHOUT A KANBAN

83. TIPS FOR EFFECTIVE
KANBAN
• PARTS TO BE PULLED THRU SUCCEEDING
WORKSTATIONS OR PROCESS
• NO DEFECTIVE PART TO BE SENT TO
SUCCEEDING WORK STATION OR PROCESS
• AMOUNT OF OUTPUT PRODUCED SHOULD
CORRESPOND TO QUANTITY WITHDRAWN
BY SUCCEEDING WORK STATION /
PROCESS

84. MANAGEMENT PRACTICES
IN KANBAN
• PRODUCTION SMOOTHING
• REDUCTION OF SET UP TIME
• STANDARDIZATION OF JOBS
• IMPROVEMENT OF ACTIVITIES
• AUTOMATION

85. How Do We Implement It?
• 3 Steps
– Define the common goal so that it is
understandable and meaningful to everyone
– Develop what will cause individual actions to
relate to the common goal
– Manage the various actions to achieve the
greatest benefit

86. BENEFITS OF KANBAN
• PROVIDES QUICK AND PRECISE
INFORMATION
• PROVIDES QUICK RESPONSE TO CHANGES
• AVOIDS OVER PRODUCTION
• MINIMIZES WASTE
• MAINTAINS FULL CONTROL
• DELEGATES RESPONSIBILITIES TO
WORKERS

87. freeleansite.com
Benefits of Kanban
• Primary
– Eliminate over-production, the #1 waste
– Produce only what is ordered, when ordered, & quantity
ordered
• Secondary
– Increase flexibility to meet customer demand
– Reduction in scheduling by Production Control &
Manufacturing
– Competitive advantage by sequencing shipments to customers
(what they want, when they want it, in the order they want it!)