Chapter-6:

The Kanban System

1. Introduction of Kanban Control

• Kanban control is one method of operationalizing a pull-based

planning and control system.
• Kanban is the Japanese term for card or signal. It is simply an
instruction that triggers movement and controls the transfer of
materials between stages of an operation.
• It is a form of signal which “customer” stage can use to
instruct the “supplier” stage to send more materials, etc. This
“signal” can be in a card form containing text instructions or
even a colored Ping-Pong ball where each color has different
message.
1. Introduction of Kanban Control
• Other types of Kanban include:
a). The move or conveyance kanban
Use to signal previous stage that material can be
withdrawn from inventory and transfer to a specific
destination.
This type of kanban would normally have details of the
particular part’s name and number, the place from
which its should be taken and the destination to which it
is being delivered.
b). The production kanban
This is a signal to a production process that it can start
producing a part or item to be placed in an inventory.
1. Introduction of Kanban Control
The information contained on this type of kanban usually includes
the particular part’s name and number, a description of the process
itself, the materials required for the production of the part and the
destination to which the part need to be sent after production.
(c) The vendor kanban
This is a signal to “supplier” to supply material or parts to a stage.
In this way, it is similar to a move kanban but it is usually used
with external suppliers.
• Whichever kind of kanban is being used, the principle is always
the same; that is, the receipt of a kanban triggers the movement,
production or supply of one unit or a standard container of units.
• There are 2 procedures which can govern the use of kanbans.
These are known as the single-card system and the dual-card
system.
2. The single-card system
• The single-card system is most simplest system to operate. It
uses only ONE kanbans at a time, i.e. either the move kanbans
or the vendor kanbans.
• In contrast, the dual-card system uses both move and
production kanbans simultaneously.
• The single-card system can be summarize as follows (see
Fig.2):
Considering the case of 2 workstations, where “A” supplies to
“B”:
When “B” requires some parts to work on, it will withdraw a
container of parts from the output stock point of “A”
2. The single-card system
When “B” has used these parts it will place the move kanban
in a holding area and
This empty container will signal “A” to start producing the
parts and once completed it will send the parts to the output
stock for collection. The move kanban is taken from the
holding box back to the output stock point of “A”.
This acts as an authorization for the collection of a further
full container to be moved from the output stock of “A” to
“B”.
2. The single-card system

Fig2. The operation of the single-card kanban system of pull control

2. The single-card system
• This single-card kanban system (Fig2.) shows two closed
loops effectively control the flow of materials between the
stages.
• The move kanban loop (shown by the thin arrows in Fig2.)
keeps materials circulating between the stages, and the
container loop (illustrated by the thicker arrows in Fig2.)
connects the work centers with the stock point between them
and circulates the containers, full from “A” to “B” and empty
from “B” to “A”.
• This sequence of action is straightforward and transparent
method of calling material only when it is needed and limiting
inventory which accumulated between stages.
2. The single-card system
• Thus, it can be seen that the number of kanbans put into the
loops between stages is equal to the number of containers in
the system.
• Hence, the number of kanban represents number of container
containing parts that is circulated in the production, i.e.
represents the inventory of that operation.
• Taking a kanban out of the loop has the effect of reducing the
inventory.
3. The single-card system rule
In summary, the rules that govern the use of kanbans are as
follows:
− Each container must have a kanban card, indicating part
number and description, maker location and quantity
− The parts are always pulled by the succeeding process
− No parts are started without a kanban card
− All containers contain exactly their stated number of parts
− No defective parts may be sent to the succeeding process
− The maker (supplier section) can only produce enough parts to
make up what has been withdrawn
− The inventory level can be controlled by reducing the number
of kanbans
4. Advantages of a single-card system

It is a simple method to control production based upon

demand.
It limits the amount of inventory in the system as the
number of kanbans in circulation dictates the amount of
inventory.
The inventory levels can be reduced by reducing the
number of kanbans.
5. The number of kanban

• A simple formula can be applied to estimate the number of

kanbans (N) required in a system:

where
R = the utilization rate for the component (units/hr)
T = the delay in receiving a container (hr), i.e. awaiting
time, transfer time, etc.
C = the capacity of the container, i.e. no. of units
X = the variation in the operation expressed in %
(e.g. if the variation is 10%, then X = 0.1)
5. The number of kanban
Example-1:
6. Push and pull control system

Push Control System :

In the push system the activities are scheduled and controlled by
means of a central system.
• Each work centre pushed out work whether there is a demand /
request from the next work station or customers.
• Major drawback is that any delay or problem at that work station
will result in the parts accumulating as inventory.
• This in turn will affect production schedule, the actual time to
produce a product, etc.
6. Push and pull control system

Pull Control System :

• In the pull system work is only produce when it is required.
• The “customer” work station pulls work from the “supplier”
workstation and determines what is produced and when.
• In this case, the customer is the only trigger for production, i.e.
if there is no request from the customer, the supplier produced
nothing.
• Thus, selected parts are only produced at a point when there is
a true demand for them.
• Therefore, inventory cannot accumulate as easily.
6. Push and pull control system

Fig3.: Pull and push philosophies of planning and control

6. Push and pull control system

Fig3. Push System

In the push system the activities are scheduled and controlled by

means of a central system. Each work center pushes out work
irrespective of whether the next station needs it. The major
drawback of this system is that events can occur which differ from
the plan, i.e. the actual time to produce a product, breakdowns etc.
As a result, inventory normally builds up and queues from at
workstations, thus impending flow.
6. Push and pull control system

Fig3. Pull System

A pull system operates differently as work is only produced when

it is required. In this system the “customer” workstation which
pulls work from the “supplier” workstation, determines what is
produced and when. Therefore, the “customer” is the only trigger
for production; if no request is passed back to the “supplier”
workstation, nothing is produced. This system attempts to ensure
only the right products are made at a point when there is a true
demand for them. Therefore, the pull system is less likely to result
in inventory build up.
 Activity in Class
1. Explain how the single card kanban system works and outline the
key benefits the adoption of this system brings to an organization.
2. (a) Calculate the number of kanbans a company requires for the
following situation and identify the inventory level.
Utilization rate = 400 units/hr
Delay time = 30 mins.
Capacity = 80 units
Operation variation = 10%
(b) The company has decided the existing inventory level is too high
and has proposed the following options for you to consider to
reduce the inventory level:
Option- A: Operation variation becomes zero
Option-B: The delay time is halved
Option-C: Capacity is increased to 150
Which option would you choose ?
 Homework
Question -1:
(a) Explain how the JIT “pull” system operates and the benefits it offers.
(b) Calculate the number of Kanbans a company requires for the
following situation and the relative inventory level.
Utilisation rate = 800 units/hr
Delay time = 45 mins.
Capacity = 50 units
Operating variation = 15%
(c) The following options have been proposed to reduce the inventory
level for the situation outlined in (b). Which option would you choose and
why?
Option- A: Variation rate becomes 7.5%
Option-B: The capacity is increased to 100 units
Option-C: The delay time is halved.
 Homework
Question -2:
a). Explain how the single card kanban system works and outline the key
benefits the adoption of this system brings to an organization.
b). Calculate the number of kanbans a company requires for the following
situation and identify the inventory level.
R = 500 units/hour
T = 30 mins
C = 100 units
X = 10%
c). The company has decided the existing inventory level is too high and
has proposed the following options for you to consider to reduce the
inventory level. Which option would you choose and why?
Option- A: X becomes zero or
Option-B: The delay time is halved or
Option-C: Capacity is increased to 150
 Homework
Question -3:
(a) Explain how the “pull” system operates and the benefits it offers when
compared to the “push” system. A diagram should be used to aid your
answer.
(b) Calculate the number of kanbans a company requires for the following
situation and identify the inventory level.
Utilization rate = 850/hr
Delay time = 60 mins.
Capacity = 50 units
Operating variation = 12%
(c) The following options have been proposed to reduce the inventory
level for the situation outlined in (b). Which option would you choose
and why?
Option- A: Variation rate becomes 6%
Option-B: The delay time is halved
Option-C: Capacity is increased to 250 units
 Homework
Question -4:
(a) Explain how a single card Kanban system operates and how it
contributes to JIT product flow. A diagram should be used to aid your
answer.
(b) Calculate the number of kanbans a company requires for the following
situation:
Utilization rate = 600/hr
Delay time = 45 mins.
Capacity = 150 units
Operating variation = 15%
(c) The following options have been proposed to reduce the inventory
level for the situation outlined in (b). Which option would you choose
and why?
Option- A: Variation rate becomes 5%
Option-B: The delay time is halved
Option-C: Capacity is increased to 300 units