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
- the type of Kanban is determined. It can be:
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.
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
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.
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
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.