Kanbans effectively replace all written work orders, move tickets and routing sheets.
This method had been developed at Toyota at end of the 1950s, and then used by major Japanese companies in the 1975s. Although Kanban started at the same time as the just-in-time philosophy, we often mixed the two approaches, although a good JIT approach is necessary to make it work properly.
The kanban is a pull flow system where the card represents a manufacturing lot of a given reference, for a given operation on a work center.
A Kanban card represents routing operations in a specific work center with the appropriate lot size to process. This is indeed a work-in-process (WIP) management.
The card is either stuck on the container itself (“In-Stock”), either put on the work center planning (“To manufacture”). A Specific kanban contains various information such on the routing, holding descriptions, where to move containers, number of Kanbans, operation & setup instructions,…
The kanban is really a pull system where the downstream consumption triggers a replenishment order upstream.
In manufacturing, the Kaban method consists in managing the information flows exactly opposite to the physical flows:
Let’s assume a work center that produces 4 items:
A = 10 – 6 = 4 containers in stock
B = 6 – 3 = 2 containers in stock
C = 7 – 2 = 5 containers in stock
D = 4 – 3 = 1 container in stock
Thus, the priority at the work center is D, then B, A and C.
To help the operators to take decisions, it is possible to put marks or flags on the Kanban planning:
Determining the number of Kanbans
The number of Kanbans to put into circulation might be determined by calculation or empirically.
The formula is the following one:
N = R * T * (1+X) / C
- R is the rate of utilization of components.
- T is the delay in receiving a container and would include the production time, transfer time and waiting time.
- C is the capacity of the container in units
- X is a variation which takes into account demand or other randomness in the operation
R = 750 units/hour
T = 1.1 hour
C = 50 units
X = 4%
N = 750*1.1*(1+4%)/50 = 17.2, so let’s say 17 Kanbans.
Kanbans approach consequences
+ Simple system controlling the WIP inventory (Work-In-Process) levels
+ Fully flexible system thanks to number of Kanban cards
+ Workers are more competent as taking decisions and proactively improve their process
- Short term system without any anticipation
- System that works with low variations
- If demand stops, the system stops at max.inventory level
- Priority management could be heavy when too many references
- More suitable for standard products with few options
Indeed the Kanban system is more appropriate for short term shopfloor control with a flat demand, but this is rare nowadays.
Kanban-MRP mixed approach
Since the Kanban works well on the short term on a shopfloor with a flat demand, the best is to mix with the MRP (Material Requirement Planning) in order to manage the medium and long term and anticipate the changes in demand.
Thus Kanban approach is better used to control the inventory of the work-in-process, to manage the priorities in a finite capacity mode which was not available at the MRP.
Moreover, to tackle the demand variability, the numbers of Kanban will not match with real demand but with regulated or anticipated demand, calculated by the MRP to meet future demands.
Some companies are a using Kanban system on the mounting or assembling lines to enhance flexibility of finished products deliveries, and others are using a “Assemble-To-Order” for assembling or mounting lines with a Kanban approach to manage the components before final assembly.
Both depend on the requirements from the industry.