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Do More With Less: OEMs Can Learn from the Roots of Kanban

The manual Kanban cards that were the precursor to Lean Manufacturing have evolved into eKanban systems that automate inventory replenishment and reduce material waste.

Doing more with less: Learning from Kanban

Most manufacturers are at least somewhat familiar with the history of the Kanban. In the 1950s, Japanese industrial engineers developed a system for Toyota designed to reduce all forms of waste. This became known to the world as the Toyota Production System and was the precursor to what we know as Lean Manufacturing today. The Kanban was an integral part of their efforts.

The Kanban is a pull-based system of inventory replenishment. When inventory reaches a certain level, a signal is sent indicating the need for replenishment. Before technological advancements made our current computing power possible, that signal was a small card – Kanban means “card” or “signboard” in Japanese – that was sent upstream. Today, the Kanban can be an electronic signal, but the basic idea has remained the same.

What many people may not know is why the Kanban system was invented. Research started in the 1940s as the country was working to rebuild its infrastructure. Having lost so many people in the war, they were facing a severe shortage of production engineers, so they needed to do more with less. (Does this sound familiar?) 

Can a solution from the 1940s help us solve today’s problems?

In developing parts of the world today, we don’t have an infrastructure issue, but we do still have a skills shortage, especially in manufacturing roles. These roles, including production planning and supply chain operations, require a certain level of education or experience. More and more planners are reaching retirement age, and younger workers are less attracted to the manufacturing sector, making it harder to fill vacant positions. 

Exacerbating the skills shortage is the labor intensiveness of the push-based production planning process. If you have worked in this environment, you know that by the time the plan is put in place, variability in actual customer demand and variability in execution to the plan has made it mostly meaningless. The effort then turns reactionary to accommodate actual customer demand, and a controlled environment can turn to chaos. Each time the plan changes, there is a great deal of effort by planning, procurement, supply chain, logistics, and shop floor personnel to adjust all work in process and move to the new plan.

  The Pull/Kanban approach makes the process much less labor-intensive. To put it simply, in Pull/Kanban, the consumption of inventory authorizes activity (procurement, supply chain and manufacturing). When a customer order pulls a part or finished good from inventory, a signal is passed from the source of the demand through manufacturing and on to the suppliers for replenishment. The Pull/Kanban system has ultimate flexibility. Since all activities are based on actual authorized production, there is no guessing at a forecast and what materials will be needed or scrambling to adjust when actual orders don’t match the forecast.

Of course, manual Kanban systems are better than no Kanbans, but manual systems are still, well, manual – and prone to error. Automating the Kanban with an eKanban system provides the ultimate productivity improvement by removing error from the equation.

2 comments on “Do More With Less: OEMs Can Learn from the Roots of Kanban

  1. Kolina
    October 11, 2017

    Great post Pam !! I love Your style of writing.. and knowledge level in the topic 🙂 Cheers

  2. pbednar
    October 11, 2017

    Thanks; stay tuned for the next post which will cover moving from a manual to an eKanban system!  

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