Kanban system

The Kanban system is a production control planning system. In contrast to traditional (centralized) planning systems, the flow of materials and replenishment in the Kanban system are controlled based on the location of the goods used. Since centralized planning systems are not flexible, they require a high level of inventory, which in turn leads to high warehousing costs.

The aim of the Kanban principle is to create production on call at all production levels and thereby reduce material stocks in the warehouse. The entire value chain should thus be controlled in a cost-optimized manner and the planning effort reduced.

How the Kanban system works

The approach is designed to ensure that only the materials that are actually consumed are available at the production site. The Kanban system works with Kanban cards. These cards are the primary control element and contain all the relevant data for storage, production, purchasing and transport.

The Kanban system is used, for example, by the automobile manufacturers Toyota and Mercedes Benz (Mercedes plants in Sindelfingen, Rastatt, Gaggenau).

In practice, the Kanban system is often split into two variants. We distinguish between:

  • Transport Kanban
  • Procurement Kanban

In the case of transport Kanban, so-called Kanban signals (see technology) are used to communicate between production, suppliers and, if necessary, the stationary trade (supermarket). The transport Kanban is controlled by a logistics or production center. It channels products, parts and materials through the entire production line according to plan.

In the case of procurement Kanban, the production line is also the client/consumer. The intermediate storage distance is usually managed internally. The respective production section reports its material requirements to the upstream process and then only produces for the subsequent process as needed.

Kanban: technology today

Technically, the supply of the production lines and supermarkets, but also that of hospitals and mail order companies, is usually controlled electronically. What the Kanban cards did in the past is now done by storage media such as barcodes or RFID chips. The internet is used as a transmission medium.

A Kanban as an identification card:

1. The Kanban serves as an order card.

When material parts are used up, the Kanban is used as an order card. To avoid stock shortages, an order is placed in the upstream production stage as soon as demand for material parts arises. Demand arises when the stock level falls below a specified minimum.

2. The Kanban serves as an identification card for the newly produced or ordered material part.

In the Kanban system, neighboring production stages are linked to form a control cycle, which ensures smooth coordination of the successive stages. The material can then be removed in the correct time and correct quantity from a buffer store located between the stages.

Depending on the operational requirements, the following information, for example, is listed on the cards:

  • Kanban ID
  • Kanban lot size
  • Total number of Kanban cards for an article
  • Article number
  • Article description
  • Storage location Source
  • Target/consumer
  • Barcodes

For more information on Kanban in logistics, see the article Kanban and Swarm Intelligence at the Management Level.

Image source: © Jeff.lasovski, license: (CC BY-SA 3.0)