Six Rules For An Effective Kanban System

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Hisham Sabry

Summary of Kanban

Kanban is one of the Lean tools designed to reduce the idle time in a production process. The main idea behind the Kanban system is to deliver what the process needs exactly when it needs it.

In Japanese, the word "Kan" means "visual" and "ban" means "card," so Kanban refers to visual cards. Lean uses visual cards as a signaling system that triggers an action to supply the process with its needs either from an external supplier or from a warehouse.

It was originally invented as a part of the famous Toyota Production System. It is associated with the design of pull systems and the concept of delivering just-in-time goods.

A pull system is where processes are based on customer demand. The concept is that each process manufactures each component in line with another department to build a final part to the exact expectation of delivery from the customer. Because your production process is designed to produce only what is deliverable, your business becomes leaner as a result of not holding excessive stock levels of raw, partly-finished, or finished materials.

Just-in-time is a "pull" system of production, so actual orders provide a signal for when a product should be manufactured. Demand-pull enables a firm to produce only what is required in the correct quantity and at the correct time. This means that stock levels of raw materials, components, work in progress and finished goods can be kept to a minimum. This requires a carefully planned scheduling and flow of resources through the production process.

Modern manufacturing firms use sophisticated production scheduling software to plan production for each period of time, which includes ordering the correct stock. Information is exchanged with suppliers and customers through an Electronic Data Interchange (EDI) to help ensure that every detail is correct.

Here's How Kanban Works

The most common form is a card with data printed on it. The card can vary in shape, size and content, and it’s sometimes replaced by other devices, such as golf balls. Over the years, the concept has developed into more modern forms like e-mails, sensors, electronic dashboards and so on.

Let's imagine that you are working in a hypermarket and you need to establish a Kanban system linking the displayed merchandise on the shelves to the warehouse and then to your supplier. The person responsible for the pasta shelf, for example, will place a red flag on the top of the shelf when the shelf needs to be replenished. The person in the warehouse will recognize this flag and will send some packs of pasta to be displayed. The warehouse guy will need to update his warehouse data system with the withdrawal amount. The system will compare the remaining amount of pasta to the critical ordering point, which is the point where an order has to be sent to the supplier. The system will notice that the remaining amount is below the critical ordering point and will send an automatic e-mail to the supplier asking for another amount. This is a prime example where an original, ordinary Kanban system is equipped with a more electronic and automated one.

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Six Rules for an Effective Kanban System

To ensure a proper setup of Kanban in the workplace, Toyota has provided us with six rules for an effective Kanban system:

  1. Customer (downstream) processes withdraw items in the precise amounts specified by the Kanban.
  2. Supplier (upstream) produces items in the precise amounts and sequences specified by the Kanban.
  3. No items are made or moved without a Kanban.
  4. A Kanban should accompany each item, every time.
  5. Defects and incorrect amounts are never sent to the next downstream process.
  6. The number of Kanbans is reduced carefully to lower inventories and to reveal problems.


As we have mentioned, establishing a Kanban system in your workplace is very useful in terms of waste reduction and effective utilization of resources.