Part of the Business terms glossary:

Kanban is a visual signal that’s used to trigger an action. The word kanban is Japanese. Roughly translated, it means “card you can see.”

Toyota introduced and refined the use of kanban in a relay system to standardize the flow of parts in their production lines in the 1950s. Kanban was one of several tools Toyota developed to ensure that inventory was based on actual customer orders rather than managerial forecasts. (See lean production.)  Kanban starts with the customer’s order and follows production downstream. Because all requests for parts are pulled from the order, kanban is sometimes referred to as a "pull" system.

At its simplest, kanban is a card with an inventory number that’s attached to a part. Right before the part is installed, the kanban card is detached and sent up the supply chain as a request for another part. A part is only manufactured (or ordered) if there is a kanban card for it. 

There are six generally accepted rules for kanban:

1. Downstream processes may only withdraw items in the precise amounts specified on the kanban.
2. Upstream processes may only send items downstream in the precise amounts and sequences specified by the kanban.
3. No items are made or moved without a kanban.
4. A kanban must accompany each item at all times.
5. Defects and incorrect amounts are never sent to the next downstream process.
6. The number of kanbans should be monitored carefully to reveal problems and opportunities for improvement.

Robert Krause demonstrates a two-bin kanban system in a small production plant.

See also: seven wastes, lean programming, demand flow scheduling system, just-in-time manufacturing 

Learn more:

SearchManufacturingERP.com has "Manufacturing tips for Kanban production control and BOM management."

Learn how the principles of kanban have been applied to programming in "What is Best, Scrum or Kanban?"

Gerald Najarian explains the pull system in "The Pull System Mystery Explained: Drum, Buffer & Rope With A Computer." 

SearchManufacturingERP.com has "Avoiding the pitfalls of configuring your ERP system for a lean environment."

This was last updated in June 2010
Posted by: Margaret Rouse

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