I am a trainer and consultant in Lean Manufacturing, Six Sigma, quality management, and business management.
Kanban bin systems and CONWIP are simple ways to trigger a manufacturing pull system within JIT which is more efficient and less wasteful than a push system driven by ERP and MRP planning systems.
Kanban is a sign, flag, or signal within the production process to trigger the production and supply of product as part of Just in Time in Lean manufacturing. Kanban or Kamban is the main method by which pull production is realized within JIT, the Kanban being the signal from one processes to a preceding process to produce more components.
Most people have seen Kanban in operation but just do not realize it, there are two well known retail chains that spring to mind when considering Kanbans, the first is the chain that can produce your spectacles within the hour while you wait; your order is dropped into a tray, this tray is the Kanban, it is moved from one process to the next, each step being completed as per your specification within the hour. If there are no spare trays the assistant within the store knows that they cannot produce your glasses within the hour as capacity is all used up.
The second example is that of a certain fast food / burger joint, between the server and the kitchen is what is known as the “burger regulator.” As the servers remove burgers from the regulator this is the signal to produce more to the kitchen behind. Batch sizes for production are changed during the day to match expected demand for peak and slow periods, if used correctly (many of the youngsters in these places seem to think they know better than the system!) 95% of customers should find their order freshly available without having to wait.
Kanban System for Burgers
Kanban was developed as part of Toyota’s implementation of the Toyota Production System (TPS), developed in the main by Taiichi Ohno as a method to enable JIT. The development owes much to Toyota’s study of supermarkets. The supermarkets stocking what the customer takes from the shelves, replenishing only what the customer purchases. This was adapted by Toyota, with processes only producing what subsequent processes took in much the way the supermarket would only restock the removed items. Kanbans were used as signals within the production process to trigger the replenishment of the stock by the previous processes.
Reasons to Implement Kanban
There is an ideal environment for pull production and hence Kanban, the further that you are away from this ideal the harder it will be to apply Kanban.
Firstly, Items should be frequently used, if not then we will have slow-moving inventory, where possible we should look back at the design of products and try to standardize components across the ranges that we have to reduce variation and thus increase usage.
Replenishment times should be short otherwise large inventory buffers are needed, this leads to the need for us to reduce set up times through implementing Single Minute Exchange of Die (SMED) and remove other delays in our systems.
Replenishment times should be reliable, we need to work on standardizing our processes to ensure repeatability. Working on implementing Total Productive Maintenance (TPM), 5S (5C), Kaizen etc. to eliminate breakdowns, defects, skills shortages and the like.
Parts should have a reasonable shelf life or buffers may go out of date, so we need to minimize the problem through applying the suggestions above.
Demand rates should be smoothed as much as possible, a steady flow is far easier to control.
Through the use of various Lean manufacturing techniques such as SMED, TPM, 5S, kaizen, standard operating processes, multi-skilling etc. we can bring our processes closer to the ideal required for just in time (JIT) and Kanban.
Waste and Inventory reduction with Kanban
Rules of Kanban
- Later process tells earlier process what is required
- Earlier process produces what later process needs
- No items are made or moved without Kanban authority
- In other words, nothing is made too early or by too much
- Defects are not passed on to the next stage
- Demand should be smoothed, not made uneven
- Earlier process does not push what it has made onto the later process
- Items are not made without Kanban authority
- If there is no Kanban demand, nothing is made
- If there is no Kanban demand, nothing is pushed on to the later process
- Defects should be identified as close to source as possible
- Stages should smooth supply and demand
- No big batches or sudden and large plan changes
Push Vs Pull systems with Kanban
Push vs Pull systems using Kanban
The philosophy of Just in Time is one of producing only what the customer wants when they want it, without the product being delayed or caught up in inventory. For this to happen we have to have some form of process which causes each production area to only produce what the customer wants when it is required.
Traditional manufacturing processes are based on a push system, the company creates a forecast as to what will be required by the customer, a guess based on history and anticipated demand. This forecast is then used to schedule the production steps pushing product through the factory. This often leads to the production of product that is currently not required by the customers, large batches of work in progress, capacity unavailable for products that are wanted by the customer today and ultimately large amounts of cash held as work in progress and finished stocks.
Just in Time utilizes a pull system, the customer orders a product, this is either manufactured by the final process or taken from a small buffer stock, this generates a signal (the Kanban) to previous steps in the process to produce replacement stock. Until this Kanban is received, nothing is manufactured, each process only making what the Kanban calls for when the Kanban is received. In this way the whole production chain only produces what is being taken by the customer at the rate at which the customer demands it. Each main step in the process generating a Kanban signal back to previous steps in the chain.
Types of Kanban
There are several different ways in which to create a Kanban and no one method is right or wrong, often a combination of styles and a little common sense and thought is required to develop the right methods for your specific situation. For instance your main production line may work using the principles of CONWIP with the various sub-assemblies being supplied using Kanban bin systems.
2 or 3 Bin Kinban Systems
One of the simplest and most common Kanbans is the 2 (or 3) bin system, normally 2 containers of parts are held within the production area, the production process utilizes the components within the first bin until it is empty, they then start using the second bin and return the empty to the stores or the previous operation for replacement. This is the signal to (deliver the 3rd bin in a 3 bin system then) replenish the stock in the bin, thus only those components that are being used are produced. When filled the container is then delivered to the production area and they wait for the next empty bin.
One of the biggest reasons for failure for these systems when you are using fairly small components is that the operators are prone to use the bins for other uses such as carrying coffee cups instead of returning the empty bins, discipline is required to ensure that whatever system you use it is run correctly.
Multiple Bin Systems
The 2 bin system is often extended into multiple bin systems depending on volumes, bin sizes, component sizes and weights. The same process is used but the previous process waits for a predefined number of bins to be returned before beginning replenishment of products.
This system works well if there are is relatively small variety of components if the number of component parts are very large and customer demand varies by a large amount this system can demand large amounts of work in progress as your buffer stocks. In these cases other methods may be required such as Conwip below.
Kanban Card Systems
Kanban card systems work in a similar way to the bin system, but instead of returning a container to the previous process to trigger production a card is returned. This card need not however be the same as the components just used, it can be generated from the customer orders to generate the specific product being taken by the customer. This can be made to be more flexible than the bin system when dealing with high levels of variety.
Kanban cards need not be “cards”, often companies will utilize any visual marker that makes sense and is easily movable and recognized, utilizing flags and golf balls for example.
Kanban Demonstration Video
CONWIP vs Kanban
Another good visually obvious Kanban system is to utilize simple signals on the shop floor itself, either marks on the factory floor or on shelving and the like. Minimum stock levels marked on buffer stock shelves can trigger the previous process to fill those gaps. Empty spaces on the shop floor can trigger the production of material to fill those spaces.
This system is known as CONWIP, constant work in progress, it is superior to tradition card/bin systems when there are large variations of components .
In high variety environments the restricted space on the shop floor combined with the actual customer order schedule (not forecast!) can have each process producing what the customer has ordered in the correct order but only when there is space to deliver to the next process.
The CONWIP system can lead to much lower levels of work in progress (WIP) than traditional bin systems of kanban hence considerably less cash tied up in stocks.
The size of your Kanbans will rely on a number of factors such as the lead time, the usage rate, the reliability of your processes and so on. For a more in depth discussion regarding the Kanban calculation use the link for Kanban Calculation.
The following are useful links for business support and lean manufacturing resources.
Manufacturing Improvements can be gained through contacting the Institute for Manufacturing, they have an industry support unit that can provide helpful advice and even manpower for projects. They have vast experience in all aspects of lean manufacturing including kanban systems.
Quality Institute; The Chartered Quality Institute (CQI) has a huge library of publications that form a huge resource for things such as lean manufacturing.
American Quality Society; The American Society of Quality can support you in many different ways just as the CQI can.
Business Innovation and Skills Improvement through the UK Department for Business Innovation and Skills; often can put you in touch with a trainer or 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 using the UK Manufacturing Advisory Service; this should be 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 to 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 fashion to the UK version.
Motor Manufacturers and Traders; Society of Motor Manufacturers and Traders have many lean manufacturing publications available specifically aimed at implementation.
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 to help you to improve your business.