While there is no such thing as “the perfect production system”, Kanban is an uncomplicated yet effective system for creating products.
What is Kanban and Lean?
The word “Kanban” is of Japanese origin and literally translates to “signal card.” Its literal meaning is that of a flag or sign, when you see that flag you know that it is time to manufacture the next part. Kanbans can take many forms, but in most production facilities, they will use Kanban cards or bins to control the process.
Kanban is a visual manufacturing production scheduling system for lean manufacturing and just-in-time (JIT) manufacturing. As part of a pull system, it controls what is produced, in what quantity, and when. The goal of Kanban is to identify potential bottlenecks in your process and fix them so work can flow through it cost-effectively at an optimal speed or throughput. With Kanban, you only produce what the customer is asking for and nothing more. It is a system of signals that are used through the value stream to pull product from customer demand back to raw materials. A Kanban system ideally controls the entire value chain from the supplier to the end consumer. In this way, it helps avoid supply disruption and overstocking of goods at various stages of the manufacturing process.
Lean manufacturing or lean production involves the minimization of waste within a manufacturing system without sacrificing productivity. So Kanban is a method of lean manufacturing. 83% of teams practicing Lean use Kanban to visualize and actively manage their work.
The Origins of Kanban
In the past, shopkeepers had to retrieve each customer’s items
Interestingly, Lean Manufacturing and the Kanban concept all have their origins starting with the American grocery store chain, Piggly Wiggly in Memphis Tennessee, back in the 1940s.
If you were to travel back in time to the early 1900’s, you would see products stacked on high wall-shelves behind the main counter. Products were retrieved for you buy a man standing behind the counter who was known as the “store clerk.” Women, who did all of the shopping, would bring in their grocery lists, and the Clerk would gather and assemble all of their items.
But it was Piggly Wiggly, the first true self-service grocery store, that changed the way people shopped for food. Instead of putting the burden on the shopkeeper to retrieve each customer’s items, the customers were given the opportunity to peruse the aisles and pick out whichever goods they wished.
The Piggly Wiggly at 79 Jefferson Avenue, in Memphis Tennessee opened the first supermarket, changing the grocery retail business forever
And the shopkeepers’ new responsibilities? Instead of dealing with each individual customer’s needs, they now monitored the shelves, restocking items when the “signal card” or the signal—an empty shelf—appeared. Once they saw the signal, they’d simply go to the storeroom to refill the shelf. It’s basically still the same method you see in grocery stores today. Where they might have had a few hundred items in the 1930’s, your average supermarket these days keeps over 42,000 items in stock. Each item has a place. When one is removed and its barcode scanned, an electronic record is kept, inventory levels monitored, and items are reordered and restocked based on a maximum amount of space available. So if a shelf holds ten gallons of milk, you stock to the maximum quantity stockable.
From Tennessee Grocery Stores to Japanese Factory Floors
Taiichi Ohno, Industrial Engineer, and Father of the Toyota Production System
During the 1950’s, Toyota engineers and executives paid a visit to Dearborn, Michigan to Ford’s River Rouge Factory. At the time Ford and GM were the largest automakers in the world and Toyota was not even a blip on the radar. After the visit, Toyota concluded that while Ford was massive in size and impressive, Toyota didn’t have the resources to match Ford’s production. So Toyota sought out another manufacturing method.
Just-in-Time (JIT) was implemented and designed at Toyota by Taiichi Ohno who took over 15 years to perfect their system. During the 1970’s many western visitors would bring back Kanban cards and want to implement the systems within their own manufacturing facilities, often with little real understanding of how they worked. It was not until the 1980’s that Kanban control really started to be understood in the West. In American supermarkets like the Piggly Wiggly, that Toyota managers discovered a different set of tools to govern their manufacturing processes: tight control over inventory quantities and storage space, and a better way to get service to the end-user (the milk rack). This was the origin of the material pull system. When you wander into any modern grocery store today, you are seeing the Kanban system in action.
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Join us in Part 2 of this blog series where we answer the question, “Are Lean Manufacturing and Kanban still relevant?”