What is a "kanban system"?

Kanban is a sub-system within JIT. It is one of many possible means, within a manufacturing set up, to signal the need for supply of more parts or material at a work center from the previous one along the manufacturing sequence.  In Japanese, it means a ‘card signal’, and refers to devices such as cards, signs, or other methods used to signal requirement for processing and supply of material at different work centers in a process.

The aim of Kanban system is to ensure that materials are procured or processed at each work center within the total manufacturing and supply operations, just in time to meet the requirement of next work center. To achieve this, it is essential for each work center to know exactly quantities and timing of material required by each of the work centers fed by it. This information is fed by the receiving work centers to the supplying work station using Kanban cards or some similar device.

In a typical Kanban system, optimal job lot quantities are fixed for each processing of each item of material for each work center. Also, the maximum work in process inventory allowed to build up in the process is decided in terms for job lots for each material at each process stage. Kanban cards are prepared for each of the maximum permitted job lot, giving details such as material, job lot quantity, processing work center and the receiving work center. Often these cards are attached to bins or containers that can accommodate full job lot quantity of material. These card are used as authorization or requests by receiving centers to supplying centers for their requirement of input material.

The receiving centers send the Kanban cards to supplying centers as and when they need material. The supplying department produces the required material on the basis of Kanban card received and supplies. The Kanban cards are returned to the receiving department along with process material. This arrangement ensures that the receiving department cannot ask for supply of input material unless they have some cards attached to empty bins, and in this way the total inventory is maintained within the permissible limit. At the same time quick replenishment of material is facilitated by prompt return of empty bins with Kanban cards, as soon as these become empty.

The Kanban system enables companies to carry on their operation without excessive inventories or material shortages without using centralized production planning systems, which need special planning skills, and are cumbersome to operate.

Kanban was an essential part of JIT during initial period of development of JIT. However, Kanban is the whole of JIT – It just one part of a larger system. Further, with development and use of sophisticated information technology, it is possible to implement JIT with alternate systems to provide information inputs to the system that were earlier provided by Kanban system.