Kanban is a phrase which originated from Japan. It literally means “Visual Cards.” In some cases it can also mean Billboards or Signboards. Many people get confused about this system. So let us explain system briefly.

What Exactly is the Kanban System?

This system was first used by Toyota and was taken from supermarkets. In supermarkets, they use stickers on each and every product to denote the product name and other information. Similar to that, Toyota used Kanbans over their parts which avoided waste, irregularities, and confusion regarding a product. To make a car it requires over 30000 parts and so each and every part belonging to a single car was denoted by a similar Kanban which avoided confusion and it made the process function faster.

This system is based on the “pull” factor from demand rather than pushing the demand. So, this directly related to demand and production. Whenever there is a demand, production takes place so that no product will be wasted in expectations. In order to make this system work, Toyota designed a set of six rules.

1. One should not send a part which is defective to the next stage of processing. If this happens, a defective product will be produced. Moreover there is a chance for all the other parts to also be defective because of that single defective part.
2. Each and every process should take only the parts which are needed for them. By this way, the over usage of resources will be stopped.
3. No product should be produced in excess. Production should be stopped when the demand is fulfilled. This will also stop the over usage of resources.
4. The production should be balanced out. This means that the parts produced should be assembled to give the desired finish as soon as possible. This will give you a clear estimate of the things that are going on.
5. The process should be tuned. This will increase the speed of production and will cut the cost of labor and miscellaneous expenses.
6. The process should be stabilized and rationalized. This also ensures that there will be no unnecessary wasting of goods.

This Kanban system may seem simple. Many may doubt the level up to which this system may work. But they have to realize that this is one of the effective and inexpensive systems of them all. You may ask that if it is that effective why some people don’t use it. Although it is an effective system, it is not suitable to all companies. Some might feel that the organizations system which they are using is effective enough. Some might feel that this system might disturb the emotions of workers as it requires high level of input.

Although this Kanban system has its own disadvantages, it is one of top class organization systems around the world. After employing this system, many companies have responded positively. Toyota’s success is emphatic and it is directly attributed to Kanban.

Related posts:

1. The Kanban System – An Overview
2. How to Leverage Manufacturing Productivity with MRP/ERP/MIS
3. Understanding Profit Relationships in Your Business
4. Managing Time and Attendance and Job Costing
5. Kaizen Free Guide

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