Japanese for "sign". The kanban system is a tool of pull production that signals to the production floor that the customer or downstream operation has ‘pulled’ or bought the product from the producer and authorizes and instructs production or withdrawal of a replacement. Cards, electronic signals and emptied carts and boxes are examples of types of kanban in common usage, though a kanban can be an electronic signal or even a colored ball.
Kanban can be thought of as simply a command given to an upstream operator that another piece (or lot) is needed downstream. In traditional manufacturing someone or some electronic system (MRP, ERP) usually has to notify – assign – an upstream operator to resume production, and tell him to stop production when downstream inventory is overproduced.
Kanban use in practice generally take two forms:
- Production instruction kanban; What, where and when it is needed, and where parts are coming from and going to. Often called "in-process" kanban.
- Parts withdrawal kanban; Supermarket of needed parts, work in process subassemblies, or finished goods inventory that are placed to visually communicate that the part has been consumed and what quantities need to be replaced by upstream processes. Supplier kanban can be cards or bins but are now more often electronic.
See: Two Bin Kanban