Kanban literally means “signboard” in Japanese. It was created by Toyota as a key element in achieving their Just-In-Time manufacturing philosophy. The Just-In-Time manufacturing process was created to reduce lead times and operating costs.
Lead times are reduced by eliminating wasted time caused by overproduction or unnecessary production.
Operating costs are reduced by eliminating unnecessary inventory and the associated cost of storing, damage and obsolescence.
The Kanban or signboard enables the Just-In-Time process to be completed by meeting the rules of producing only:
- What is needed
- When it is needed
- In just the amount needed
To do this, the Kanban must contain information about what is required, how much and where it is to be delivered. The Kanban is then “posted” to the preceding process with this information which is the trigger for them to fulfill that requirement. The Kanban is then returned with the product from the preceding process to be posted again when required.
To create an even and continuous flow the calculation on when to post the Kanban and the amount required is dependent on the usage rate and the lead time to deliver.
Kanbans can take many forms and can vary from a simple line on a container to an official order to a supplier. The objective though is to always keep it simple and minimise the amount required to keep inventory low. Many small replenishments are more effective than a few large ones – we have noticed this suits our customer’s businesses perfectly. Allowing for working capital and cash flow to be improved.
We have found, our customers pursue the SER® as a vehicle to look at their business in a different way to make some small changes to reap big rewards. The Steel Efficiency Review® aims to provide recommendations to support our customer’s business and at the same time improve our product and service offer.
To register for the Steel Efficiency Review® click here.