Kanban is a visual scheduling and inventory control system that uses signals (traditionally cards, but also electronic messages or physical containers) to trigger production or material movement only when needed, implementing pull-based manufacturing where downstream processes control upstream activity. Developed by Toyota as part of their production system, kanban means “signboard” or “visual card” in Japanese, reflecting its fundamental principle: make production and material flow visible and responsive to actual consumption rather than forecast-driven pushing of work through the system. A kanban card attached to parts or materials authorises production or movement, with the number of cards in circulation strictly limiting work-in-progress inventory and preventing overproduction, one of the seven wastes in lean manufacturing.
The mechanics of kanban are elegantly simple yet powerful. Consider a two-bin kanban system for fasteners used in assembly. When the first bin empties, the kanban card from that bin travels to the supply point (internal stores or external supplier), authorising replenishment of one bin’s quantity. Assembly continues using the second bin whilst the first bin is refilled. When the second bin empties, its kanban card triggers replenishment, and the process repeats. The number of bins and their quantity determines total inventory in the system: reducing bins reduces inventory but requires more frequent replenishment and reliable processes. This self-regulating system adapts automatically to actual consumption rates without complex planning calculations. Production kanban works similarly, with finished goods consumption triggering upstream manufacturing. Electronic kanban systems replace physical cards with digital signals, sending replenishment requests automatically when inventory reaches preset levels, whilst maintaining the same pull-based principles.
Kanban offers multiple benefits beyond inventory reduction. Visual management makes material status obvious: a kanban card waiting signals a shortage, whilst missing kanbans indicate potential overproduction. The system is self-correcting, naturally balancing production with consumption without constant planner intervention. Problems surface quickly because minimal buffer inventory means issues immediately impact flow, forcing resolution rather than workarounds. Quality improves as defects are caught quickly before large quantities are produced. Implementing kanban requires stable, reliable processes with relatively predictable demand patterns. Highly variable demand or unreliable suppliers may require larger buffer sizes (more kanban cards) that reduce benefits. Modern manufacturers often combine traditional kanban for routine replenishment with MRP planning for longer-term material procurement, creating hybrid systems that leverage kanban’s simplicity for execution whilst using sophisticated planning for strategic decisions.
