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Kanban Systems for Lean Manufacturing

Page Contents

What is Kanban?

Kanban is a Japanese noun, meaning “visible record”. This has come to be used in the English language to represent a family of different production & inventory control systems and methods which signal (communicate) some or all of the following:

  • what parts to manufacture,
  • when to start manufacturing,
  • when to stop manufacturing,
  • how many to manufacture, and
  • where to deliver them to.

How does it Work?

Kanban works automatically on a pull systems (customer orders and inventory withdrawals) to automatically schedule more production without intervention of Supervision nor Planning & Scheduling Department personnel.

After careful analysis of the manufacturing process (at the intended location of the improvement, as well as upstream, and downstream),

  • the optimum number, size, and type of bins to be used for storing and transferring product is determined.
  • the quantity of product that will be contained within each bin is calculated
  • the type of Kanban is determined.  It can be:

Single Card

Double Card (Conveyance or Production)

MRP & Kanban working together (Syncro-MRP)

The theoretical minimum number of Kanban bins is 3.  This  assumes continuous flow of production with minimum Muda (Japanese for Waste) and no mandatory wait time for the workers.


What are the Benefits?

Today, inventory is often seen as waste, evil, and very expensive.  Most leading authorities suggest that inventory loses 50% of its book value each year (100%, 50%, 25%, 12.5%, etc.) due to the costs of storing, counting, dusting, shrinkage (theft), damage, insurance, obsolescence, and many other costs.  Certainly, it isn't the same asset that Accountants allow to be entered onto the financial books at its selling price, or purchase price.


With a properly implemented Kanban, inventory tends to be reduced to less than 30% of the initial level while maintaining the same level of order fill, shorter lead time for customer orders, and same service level for customers.  The 70% of inventory that is no longer needed can be sold at full price, putting the windfall cash flow into the bank where it belongs (instead of gathering dust as inventory on the shop floor).

With Kanban, workers tend to be self-paced, more in-control of their job, and less frustrated.

Once the system is operating well and stable, Kanban can be used as a simple, powerful tool for forcing on-going improvements in the manufacturing process.  By removing one of the Kanban cards after the system is stabilized, Supervision can de-stabilize the system in a controlled manner, forcing it to find a way of regaining stability through further process improvements.  If the improvement cannot be made immediately (ie. technological limitation), the Kanban card can be quickly replaced, and the system re-stabilizes at its previous status.  By this means, Supervision and workers can work together to maximize the rate of process improvement.

How can PQA help me with implementing Kanban?

PQA can assess your operation, and determine the potential benefits of a Kanban system, improved MRP II (or ERP), or a combination of the two systems.

Kanban training & implementation support for Workers, Foremen, Supervisors, Engineers, and Managers to achieve minimum inventory levels and maximum responsiveness to the rapidly changing needs of the customer.


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