Improvements to the environment and the process will impact the
number of KANBANs required, just as do fluctuations in the mix.
The supplier operator will be able to assess his complete
situation by contemplating his KANBAN planning board. On one hand,
he is now equipped with suggested KANBAN loops based on forecasted
volumes and the above calculations (points 1 to 10). Moreover, he
is getting a steady stream of KANBANs back from his client(s),
immediate feedback signals of true consumption. By accumulating
these KANBANs on his board, he can ascertain current movement and
whether it is time to produce more.
This KANBAN planning board is posted on a wall near the work
center (not in the foreman's office—the foreman is usually incapable
of managing these loops efficiently, there are too many of them, and
not enough of him).
A typical planning board consists of wall mounted organizers with
multiple slots in which the returned KANBANs are inserted, starting
with the bottom slots. For each series of KANBANs (one for each
part-customer-supplier relationship) indicators (shown as arrows but
they could be colored pins or labels) set at different heights
indicate critical points in loop management. A single arrow
corresponds to a production lot size, and, when enough KANBANs are
accumulated to reach that point, signals to the operator that he can
begin to produce that part.
A double arrow indicates that, based on the customer consumption
rate, production of this item is now a high priority otherwise
chances are the customer will stock-out.
A triple arrow indicates the total number of KANBANs in the loop.
The difference between that number and the number of KANBANs
accumulated on the board identifies precisely the number of full
KANBAN-skids at the customer.
Unused KANBANs (retired or spares) are hung from hooks at the
base of the board to avoid the operator having to write new cards
when he needs them.
The information portrayed by the board is very easy to understand at
a glimpse. The exact relative priority of each part is easily
assessed for each customer. Opportunistic decisions are now
possible based on the exact real time situation on the shop floor.
If, for example, he has just completed a lot of part 6056401
(left hand part), he will reassess his situation and find that this
part is undergoing high utilization at this time. That is why
KANBANs have accumulated so high on the board. Enough KANBANs are
present to warrant another lot immediately, thus saving a setup. If
other parts have also reached the first arrow, he has to make a
decision about priorities. The higher the KANBANs in respect to the
single and double arrows, the more that item is seen as a priority.
If, at the close of a production lot, the operator sees no items
have accumulated KANBANs up to the first arrow (order point
trigger), he must cease production as there is no need to produce
more as current demand is slow and there is sufficient inventory to
meet his customers' needs.
Now that we have seen how the cycle works, let's examine how the
loops are increased or decreased.
One of two situations may occur. On one hand, several clients may
start consuming faster. This will manifest on the board as an
increased rate of KANBANs returning. At one point, several KANBAN
loops will reach their trigger points. The operator will-see he is
losing ground to the demand. His output is lower than the demand
rate. He will understand he is converting too much capacity into
setups, and not enough into production output. In other words, he
is diluting his capacity into too many small lots. He must thus
increase his lot sizes and do setups less often. He will also loose
some flexibility if he does this. He must consequently increase the
size of the buffer stocks. The operator will thus move the first
trigger arrow up a couple slots and add three or four KANBANs to the
loop. The second and third arrows are also moved up in proportion.
This will increase cycle stocks as well as buffer stocks while
enabling the work center to produce larger lots in response to a
In principle, the operator will have anticipated this situation
because the planner will have suggested new loops as discussed
above. If the suggested loops point to smaller numbers of KANBANs,
the operator is getting conflicting signals. He should obtain more
information from his customer or his supervisor to find out if the
situation is only temporary or if it reflects a real tendency. After
all, the pull he is getting is real, and we all know about forecast
The other situation the operator may confront is the exact
opposite one where the operator finds he often completes a
production lot to find no other loops have reached their trigger
point. If this happens once in a while, it is normal (signals time
available for preventive maintenance, operator training or for
poor-quality problem solving). If it happens too often, it means
demand has slowed down and that it is an opportunity to decrease lot
sizes and buffer stocks. A certain number of KANBANs are retired and
the trigger points adjusted accordingly. This will maximize
flexibility while reducing unnecessary in-process stocks, achieving
Our Strategic Elevation of Kanban Performance illustrates how
KANBANs can function beyond their traditional role of simple
prioritizing. This maximizes efficiency and customer service while
actively minimizing stocks to the lowest level tolerated by the
constraints of the process. This is in direct keeping with the prime
objectives of production and inventory management.
Moreover, we have seen how this approach uses KANBANs to dovetail
with MRPII systems in a thrust toward responsible employee
empowerment, where each employee is given, not only the right, but
also the tools, to integrative decision making based on the exact
and current situation at his or her customers.
The concepts presented can be adapted to almost any environment
and can even be implemented to trigger and manage employee
flexibility as a means to adjust capacity dynamically in response to
mix fluctuations, as a further battle against unproductive
For balance of this article, click on the below link:
Lean Manufacturing Articles and go to Series 01