How does the kanban system work?

When you define value from the customer point of view, know your value stream, and start reducing the eight types of waste, you are creating flow.  The work, whatever it is, products, documents, tasks, food, or other, will flow better.   A kanban system can help to minimize overproduction and inventory.  It is a pull system, which means producing the right item, at the right time, in the right quantity.  

The rules for an effective kanban system are below.

  • Customer (downstream) processes withdraw items in the precise amounts specified by the Kanban. 
  • Supplier (upstream) produces items in the precise amounts and sequences specified by the Kanban.
  • No items are made or moved without a Kanban.  Nothing is produced or replenished without previous consumption.
  • A Kanban should accompany each item, every time.
  • Defects and incorrect amounts are never sent to the next downstream process.
  • The number of Kanban is reduced carefully to lower inventories and to reveal problems.

There are two types of kanban, production, and withdrawal.  Production kanban indicates the kind and quantity of products that the supplier must produce.  You will produce the number of items on the card when you receive the kanban card.  The withdrawal kanban specifies the kind and quantity of products that the customer needs.

Let’s use a hamburger place to show how kanban works. 

  1. The server asks the customer what he wants.  His order is the customer demand, what item he wants and how many. 
  2. The server will record the order, this is the production kanban card.  The kanban can be a traditional notepad paper or a computerized system on which the server writes the order and the cooks see it on a screen back in the kitchen.
  3. Whatever is the case, it will be the sign for the cook to start preparing the food.  The cook will produce exactly what the customer request, one hamburger with cheese, bacon, and salad.
  4. To produce this item the cook will withdraw a hamburger patty, two strips of bacon, a portion of salad, and one bun.  Each of these items is already prepared in labeled bins with their own withdrawal cards. When the cook finished one bin, he put the withdrawal card or the bin in the assigned location.
  5. The person in charge of stock replenishment will walk by, take the empty bin, and replenish the empty space on the shelf with a new full bin.
  6. Once the food is prepared, the cook rings the bell and move the plate to the delivery window along with the order ticket.
  7. The order ticket from the computerized system or the notepad used before is the server sign to take the plate to the customer. 

In this example, we have the external customer, the client who comes to eat at the restaurant.  They determine how many hamburgers, and how much bacon and salad are used every day.  The server and the replenishment person are both suppliers, at different levels. 

The information flow from the customer, to the server, to the cook, to the replenishment person.  This last one will have his own kanban to know when to order to external suppliers.  The material flow from the replenishment person back to the customer.

The beauty of this system is that when it is well done you control inventory, avoid paying more for expediting items, save labor time counting inventory, improve space utilization, keep your employees focus on doing their work with minimum stress and your customers receive what they want when they want it.  In the next post, I will share some real-life examples of kanban.

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