Kanban is the name given to a system which helps to control the logistical chain from the point of view of production. Kanban is not defined as an inventory control system but helps to improve and maintain bulk productions. This system was the development by Taiichi Ohno at Toyota in the 1940s and has become an important and effective tool to support the functioning of a production system as one big entity. It is a good way to promote improvement and has many other benefits as well for larger organizations and companies.

A short history

In the 1940s, Toyota discovered a much better engineering source which was the supermarket. The company found that the store clerks restocked the grocery goods by their store’s inventory and not by their vendor’s supply. Only when products were nearing their sellout did the clerks think of ordering more of them. This made the engineers think about better methods which gave birth to Kanban. This system could match the inventory with the demand and helped to achieve higher levels of output and quality.

Kanban today

Most information in today’s world comes to us as words through a screen. Text is present everywhere-spreadsheets, emails, task lists, etc. However flexible and useful text might be, it is still not as effective as one may think. The brain processes visual information much faster than text, and this is where Kanban comes into the picture. Kanban helps to harness the power of visual information by creating images of your work puts out this information to communicate with others.

Benefits of Kanban

  • Reduces inventory and product obsolescence: In Kanban, the biggest benefit experiences are that it helps to reduce the inventory and also prevents the scenario in which the stocked up products go obsolete. This is because component parts are not delivered until just before they are required.
  • Reduces waste and scrap: Another benefit of Kanban system is that it helps to reduce scrap and waste. Since products, as well as the parts and components, are only manufactured when they are needed, overproduction scenarios are eliminated and hence waste production is reduced by a big factor. This also reduces storage costs.
  • Increases output: The flow of Kanban doesn’t stop there. It is ever a production problem, and this allows problems to be identified quickly, thus increasing output using the same resources. Kanban also reduces the wait time since it makes supplies a lot more accessible.
  • Reduces total cost: By preventing over-production, inventory costs, waste and scrap and stock levels, Kanban tends to reduce the total cost for a company. It also develops flexible work stations and saves resources by streamlining production.
  • Provides flexibility in production: Another major benefit of Kanban is that it helps to provide certain flexibility in production and manufacturing processes. In the case of a sudden drop in demand for a product, the Kanban system ensures that one is not stuck with more inventory than they need. This provides flexibility to change according to rapidly changing demands and conditions.