How can you implement a Kanban system for inventory management in a small manufacturing business?

1 What is Kanban?

Kanban is a Japanese word that means "signboard" or "card". It originated from the Toyota Production System, where workers used cards to signal the need for more materials or parts from the previous stage of production. The cards represented the demand for a specific item, quantity, and location. The Kanban system aims to reduce inventory levels, eliminate overproduction, and improve quality by matching supply with demand.

2 How does Kanban work?

The Kanban system works by creating a pull system, where each stage of production only produces what is requested by the next stage. The requests are made through Kanban cards, which are attached to containers or racks that hold the materials or parts. The cards specify the item name, quantity, source, and destination. When a stage of production consumes or completes a container, it sends the Kanban card back to the source as a signal to replenish the container. The source then produces or delivers the requested item and sends it along with the card to the destination. This way, the inventory is kept at the minimum level required to meet the demand.

3 What are the benefits of Kanban?

The Kanban system can help your small manufacturing business in various ways, such as reducing inventory costs and space requirements, increasing production efficiency and flexibility, improving customer satisfaction and loyalty, enhancing teamwork and communication, and encouraging continuous improvement and innovation. By utilizing the Kanban system, you can keep only the necessary amount of materials and parts in stock, eliminate bottlenecks, delays, and waste, deliver products faster and with higher quality, make the workflow visible and transparent to everyone involved, and identify and solve problems quickly and effectively.