Creating Efficiency in the Workplace

Kanban: an efficient inventory management approach

Use visual cues to action.

© iStockphoto/tainted

Wouldn't it be great if whatever you needed was right there waiting for you?

No running around trying to find supplies at the last minute. No missed deadlines because resources weren't lined up. And no emotional energy wasted trying to figure out who used the last of the copy paper, and didn't order more!

You could go to extremes to avoid this problem. You could order enough copy paper to fill the whole storeroom, or have enough supplies inventory on hand to fulfill orders for the next six months. But this type of "over solution" is a poor use of financial resources and space.

What if there was a way to ensure you always had the necessary resources available when you needed them? Japanese pioneers in efficiency developed the Kanban system to do just this.

Kanban in Practice

Kanban was developed as a means of fulfilling a just-in-time (JIT) inventory system. By implementing kanban, your materials and supplies arrive right when you need them. This decreases your storage and carrying costs.

Kanban is largely associated with manufacturing. A major concern in manufacturing is the need to have a ready supply of materials, without incurring unnecessary inventory holding costs. But it can also be applied in a nonmanufacturing environment, where the efficiency of your workflow depends on having resources available.

The term 'kanban' combines the Japanese words 'kan,' meaning 'visual' and 'ban,' meaning 'card' or 'board.' A kanban is a visual card or other cue that signals something is needed. It is a "pull" system, where supply is determined by the manufacturer or user.

Kanban Cards

One of the most common applications of kanban is a bin system with cards. Here is a simple example of how a two-bin kanban system works.

You have one bin on the plant floor that contains the manufacturing supplies, and one bin waiting in supplies inventory.

Each bin has a card with production details. When the bin in the plant is empty, the bin and the kanban card are taken to supplies inventory. The bin and kanban card waiting in supplies are taken to the floor to replace the empty bin. The empty bin is sent to the supplier, who fills it and sends it back to supplies inventory.

The bins form a loop, as shown in Figure 1 below. An empty bin signals a replacement and a refilling. You determine how many full bins are waiting in inventory, and the kanban triggers the motions required to keep the bins full.

Example Two-Bin Kanban System

Depending on the complexity of the manufacturing process and kanban system, you can have many different cards in use. You can send a bin and card from machine to machine and from department to department, depending on how many control points you want to maintain.

Kanban Cues

Instead of using actual bins and kanban cards, you can use kanban cues that have the same effect.

For example...

Access the Full Article

This resource is only available in full within the Mind Tools Club.

Learn More and Join Today

Already a Club member? Log in to finish this article.
Add this article to My Learning Plan

Where to go from here:

Join the Mind Tools Club

Click to join Mind Tools
Printer-friendly version
Return to the top of the page

Your Score
Create a Login to Save Your Learning Plan

This ensures that you don’t lose your plan.

Connect with…

Or create a Mind Tools login. Existing user? Log in here.
Log in with your existing Mind Tools details
Lost Username or Password
You are now logged in…

Lost username or password?

Please enter your username or email address and we'll send you a reminder.

Thank You!

Your log in details have been sent to the email account you registered with. Please check your email to reset your login details.

Create a Mind Tools Login
Your plan has been created.

While you're here, subscribe to our FREE newsletter?

Learn a new career skill every week, and get our Personal Development Plan workbook (worth $19.99) when you subscribe.

Thank You!

Please check your Inbox, and click on the link in the email from us. We can then send you the newsletter.