A kanban is a signboard or card, and the word also refers to the system of utilizing standard containers, each of which has a card designating what and when to produce. Toyota uses kanban to make what they need when it is needed and in the quantity.
Taiichi Ohno, the father of the Toyota Production System, stated that it is not an overstatement to say that kanban controls the flow of goods at Toyota. Kanban is a way to achieve just-in-time. In essence, it becomes the autonomic nerve center of the production line. Based on this, the production workers start work by themselves and make their own decisions concerning overtime. The kanban system also makes clear what must be done by managers and supervisors. This unquestionably promotes improvement in both work and equipment.
In order to execute kanban in their operation, Ohno developed six rules for its use:
- The later process picks up the number of items indicated by the kanban at the earlier process.
- The earlier process produces items in the quantity and sequence indicated by the kanban.
- No items are made or transported without a kanban.
- A kanban must always be attached to the goods.
- Defective products are not sent on to the subsequent process. The result is 100% defect-free goods.
- Reducing the number of kanbans increases their sensitivity.
To practice the first rule requires top management to change their way of thinking and make a commitment to reverse the conventional flow of production, transfer, and delivery. Ohno said that this will meet with a lot of resistance and require courage. The greater the commitment the more successful will be the kanban implementation.
To make the second rule of kanban work, manpower and equipment in each production process must be prepared to produce the quantities needed at the time needed. If the later process withdraws unevenly in terms of time and quantity, the earlier process must have extra manpower and equipment to accommodate its requests. The greater the fluctuation in quantity picked up, the more excess capacity is required by the earlier process.
Rule three prohibits picking up or producing goods without a kanban. Rule four requires a kanban to be attached to the goods. Rule five requires 100% defect-free products, that is, do not send anything defective to the subsequent process. Rule six urges the continual reduction of the number of kanbans.
When these rules are faithfully practiced, the role of kanban expands. Since a kanban always moves with the needed goods, it becomes a work order for each process. In this way, a kanban can prevent overproduction, the largest loss in production.