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How the Kanban System Works
The Kanban System has become synonymous with the implementation of the Just in Time (JIT) manufacturing philosophy which is designed to control inventory and reduce waste. Begun back in the 1940s, JIT grew out of Toyota's cultural commitment to continuous improvement to spur peak performance in its manufacturing processes.
The term Kanban is a Japanese word whose English translation means signboard or visual signal. Toyota originally used cards attached to different containers (production and withdrawal) to communicate what materials needed to be replenished (produced) and what materials were to be used (withdrawn). Today, there are many variations of the Kanban cards, including signboards and electronic systems.
The Kanban system was constructed to work like a well-timed traffic signal in managing the flow of traffic to meet the real-time needs of customers by sending clear signals on when to start, slow down, and stop production. The desired result is to create an efficient system where products are only replenished when products are consumed further upstream in the process. However, for some production processes, Kanban can become cross wired sending mixed, confusing, and wrong signals in determining the optimal production levels.
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Production Flow Problems
The Kanban system works best when there is flexibility within the production system from a combination of small lot sizes and product variation. Again think of a traffic signal at the intersection where the traffic is light and intermittent in all directions. The smart Kanban system senses small buildups of traffic from multiple directions, changing the light to green in the direction to allow the most traffic to pass through. The disadvantages of the Kanban system begin to appear as the traffic patterns change to:
- Large-scaled production. The inherent flexibility of the Kanban is challenged when production size is large and product variety is non-existence. In this case, a changing traffic light is unnecessary because all the traffic is in one direction. The intermittent stopping and starting of production would be disruptive to the overall flow of the traffic.
- Bottlenecks. To address bottlenecks in the system, it makes more sense to suspend the Kanban production schedule and focus on fixing the bottleneck. The situation is similar to what happens with a traffic accident occurs at an intersection where the assistance of a police officer, the planning scheduler, is needed to manage the traffic until the bottleneck is cleared.
- Long lead times and changeovers. Kanban becomes less advantageous as the lead time from the start of production to completion lengthens or when changeover times of the equipment compromised the ability of Kanban to make rapid adjustments to production. In the traffic signal analogy, if the cars (the equipment) or the drivers (the operators) are too slow to respond quickly to traffic signals changes, the system loses its flow.
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Wide Fluctuations in Demand
The Kanban has often been compared to a supermarket system in which items that the customers buy are communicated back to the warehouse facilities as a signal to deliver replacements, thus creating a seamless flow of goods and fully-stocked shelves. Although the Kanban system was designed to have a leveling effect on production to meet ever-changing consumer demand, the system begins to breakdown when consumer demand is extremely irregular.
The disadvantages of the Kanban system become even more apparent when radical demand shifts occur. Seasonal shifts can wreck havoc on the Kanban system if the opening and closing the season is not properly understood. For example, "Christmas in July" promotions are not a correct signal to ramp up production to full capacity for artificial Christmas trees, colored lights, and decorations. Also, unexpected sharp declines in demand due to temporary external factors, such as the safety recalls of Chinese milk in 2008, should be addressed by another manufacturing planning scheduling system which can take into account these types of demand shocks.
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Misinterpretation of Signals
A signal only works as well as the interpreter of the signal. In order for the Kanban system to work properly, production workers have to be in a position to visually see the signal and apply the correct production rules. When the Kanban rules are too complex or workers are not properly trained, production errors can creep into the system. Think of a traffic light that has malfunctioned with both the green and red lights blinking. Many people become confused of how to proceed when they encounter this unfamiliar signal. If the Kanban rules do not provide direction or the rules are forgotten or ignored by employees then disaster is likely to happen. Team work and collaboration are essential for the Kanban system to operate smoothly and employees must be well-trained. In industries with a high turnover rates, the Kanban system may be more difficult to consistently deploy.
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For the sake of quality, inventory levels are driven to as close to zero as possible in the Kanban system. However, sometimes inventory buffers are needed to guard against not only poor quality items from suppliers but also poor quality from internal processes. Inventory buffers are also useful when uncertainty is high and disruptions in the transportation network are frequent.
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A Final Weigh-In on the Disadvantages of the Kanban System
If you already have misgivings about using JIT for your scheduling strategy then you probably will not find much utility with the Kanban system.The disadvantages of the Kanban system become more glaring as the signals get cross wired or are simply ignored because of large-scaled production schedules, unsustainable widespread fluctuations in demand, and errors by workers misreading the signals.
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"Kanban Pull Systems Are You Ready Article." Lean Manufacturing Consulting and Training San Diego, California Kaizen Events Value Stream Mapping Lean Six Sigma. http://www.emsstrategies.com/dm030104article1.html (accessed May 11, 2010).
Multiple traffic lights image at a London roundabout (Westferry Road, Docklands) by Per aspera ad Astra at Wikimedia Commons.
Chinese Milk Scandal - empty milk shelves image provided by Marc van der Chijs at Wikimedia Commons.