I am a trainer and consultant in lean manufacturing, Six Sigma, quality management, and business management.
Kanban System to Pull Production
There are many different types of Kanban systems; Kanban cards, Faxbans, E-bans, CONWIP, 2 bin systems, 3 bin systems, multiple bin systems, and as many hybrid systems and variations as the human imagination can create. Each type of system has its strengths and weaknesses and situations in which it is best applied.
More often than not it would be applicable to have more than one style of Kanban in use for different applications throughout the factory. For instance a CONWIP style kanban system for the main production line with components supplied from subassembly areas using 2/3 bin kanban systems.
Kanban enables you to develop pull production systems that only produce what the customer wants when the customer wants it rather than building huge quantities of stock that may or may not be wanted by the customer.
Kanban Pull Control
Kanban Pull Control Systems
A typical production system pushes production through a factory based on a schedule of work required. A planner uses customer orders, historical data and a few guesses to try to figure out what the factory should be making and then loads the raw materials in at the front end for processing.
A pull control system is based around building what the customer actually asks for. So if the customer orders a product you make that specific product to order rather than as part of a large batch of those products that then sit in a warehouse waiting for an order.
The idea comes from how supermarkets restock their shelves, the suppliers only refill the shelf with what the customers have actually taken rather than stacking them up with the same qty each and every day with no regard to the qty taken.
A Kanban is like an empty space on the shelf (In fact an empty space is often exactly that in many Kanban systems), it is a signal for the previous operation to produce a part to fill that space.
By using this approach we pull production through the factory based on actual customer orders rather than guessing at what they might want and using our capacity building things that the customer may not want for weeks. This is a major part of Just in Time (JIT Manufacturing).
The Kanban pull system not only ensures that you produce what the customer actually wants but it also dramatically reduces your inventory, improves quality (less handling damage), and can reduce lead times from weeks to a few days or even hours. The savings that many companies can make are very significant, especially if they have large amount of cash tied up in stock or even bank loans to finance stock.
Kanban cards were the first introduction to the west regarding Kanban, many westerners brought these cards back from Japan with them trying to discover how the Japanese were outperforming them in the global markets. However trying to understand the success of the system is far more complicated than just a few cards!
The principle of Kanban Cards is that the card is a signal from a process back to a preceding process to supply more product. As with any other Kanban, it is the authority to produce product, a specific quantity of a specified product.
Kanban cards can act in the same way as a simple 2 or 3 bin system (below), being dedicated to a specific product. When a batch of material is started, the Kanban card is removed and sent back to the previous process. This card is then the authority to produce the next batch, sometimes there are multiple cards for the same product and production is triggered when a fixed number of cards are received.
Kanban cards do not have to be product specific, in some environments where there is high variety, the Kanban cards are the trigger to produce according to a schedule. The card tells the earlier process to produce the next item in the customer schedule, the schedule either being detailed on the card as a “traveler” that follows the production process or as a signal for the process to refer to the schedule and produce the next item.
Kanban cards need not be “cards”, many companies utilize many different ideas from flags to multi-coloured golf balls to transmit their signals. A Kanban can be of any type as long as everyone understands the message being passed.
The biggest weakness in the Kanban cards system is the ability to lose the cards, a card that disappears for any number of reasons can lead to later shortages when product is not produced! Otherwise the system is very simple to use.
2 Bin Kanban
Kanban 2 / 3 Bin System
The 2 or 3 bin system is probably the easiest system to understand, the production area has 2 bins of components, when they have used the components from the first bin they return it for replenishment and start to use the second. The replenishing area then send the third bin to the production area in a 3 bin system, and begins to fill the returned bin.
This ensures that the supply areas only produce the components being used at the rate at which they are being used.
This system requires dedicated containers for the components, where they are large or heavy components there may be a need for multiple bins rather than just 2 or 3, with set trigger levels for production, for example when 8 of 12 bins are returned.
Much like using Kanban cards, the most common problem is when containers are mislaid or used elsewhere, the most common use being the transport of coffee cups in smaller bins. This system can result in the need for many dedicated containers and large amounts of inventory if applied in an environment with many component pieces.
Kanban Systems enable flow
CONWIP Kanban System
Constant work in progress (CONWIP) is another type of Kanban, in this system rather than having Kanban cards or containers the authority to produce is usually an empty production location on the shop floor.
This system usually works to a schedule, but the earlier process produces only when there is an empty location for it to fill, either a defined space on the floor that has been emptied by a subsequent process or an empty shelf or container. In this way production is pulled in the order required by the customer through the factory.
This method is much more applicable in higher variety environments and will give far lower levels of inventory that using Kanban cards and bins. The lead times for this system are generally higher than those for the other alternatives as the others normally have finished or almost finished product that can be delivered almost immediately to the customer. The CONWIP system requiring the batch to be processed through the entire factory.
However in my experience the CONWIP system still dramatically reduces lead times if you apply the other principles of JIT such as set up reduction through SMED and batch size reduction. Limiting the sizes of batches to be passed between processes you gain significant savings.
E-Ban and Faxban
With today's technology it is possible to aid the various Kanban systems described above. Often the suppliers are linked into the system using what are commonly called “faxbans” and “E-Bans”, these are just like any other Kanban card but rather than being physically handed from one process back to the previous they are transmitted electronically. This helps to link in your suppliers to your just in time flow and have them only deliver what you actually need (and only pay for what you use!)
Some companies utilise E-bans within their production processes, either as part of a Kanban card or bin system or a CONWIP system but the signals being passed electronically hence no cards or bins to be lost!
Inventory control with Kanban
Time Based Kanban
The Kanbans discussed above are very much based upon usage therefore quantity, however we often have use a hybrid timed version of Kanban with some of our suppliers, normally suppliers of fasteners and the like. In this version the supplier visits on a regular basis to replenish whatever products have been used. The levels of stock being decided by likely maximum usage between visits.
Typically these are multiple bin type systems but with the bins topped up at regular intervals by the supplier. They often have multiple locations within your facility and your operators will just help themselves to full bins after returning the empties for replenishment.
The less often the supplier visits to replenish the larger levels of stock that you need to hold. You also have to trust the supplier with regards to their honesty in informing you what has actually been used.
Making Kanban Work
Typically Kanban control systems work best in fast moving low variety environments however with careful thought they can be made to work in almost any environment. The secret is understanding where variety is created in your product.
If you want to have a large range of finished products then it best controlled if you can base your variety on a common set of building blocks (a bit like using lego!) If your product can be assembled using common parts then it is far easier to create a reliable and working kanban system.
The following are useful links for business support and lean manufacturing resources.
Manufacturing Improvements can be gained through the Institute for Manufacturing at Cambridge University in the UK, they have an industry support unit that can provide helpful advice and even fellows and students for projects. They have experience in all aspects of lean manufacturing including kanban systems.
Quality Institute; The Chartered Quality Institute (CQI) has a large number of publications and are a huge resource for things such as lean manufacturing.
American Quality Society; The American Society of Quality can support you in many ways just as the CQI can.
Business Innovation and Skills Improvement with the UK Department for Business Innovation and Skills; they can often put you in touch with a consultant in the field that you require. If you are lucky they may even have access to funding to support the skills improvements you wish to make. So if you want to find a trainer to teach your guys about kanban contact these guys first, they may pay for it!
Lean Manufacturing Improvements through the UK Manufacturing Advisory Service; this is your first point of call if you are a UK SME manufacturer. They have experts that cover many aspects of lean manufacturing including kanban systems and CONWIP. Their services are often free of heavily subsidized.
Business Improvements with the UK Business Link; they can signpost you in the direction of help and again can offer funding from government sources (if you are lucky!)
US Business Improvement; US Business Link can help you in a similar way to the UK version.
Motor Manufacturers and Traders; The Society of Motor Manufacturers and Traders (SMMT) have many lean manufacturing publications available specifically aimed at the implementation of Lean Manufacturing.
Automotive Industry Action Group; The Automotive Industry Action Group have many publications in a similar vein to the SMMT.
These Links will help you to find more information regarding Lean Manufacturing, Just in Time and Kanban cards and other kanban types such as fax-ban, bins and CONWIP to help you to improve your business.