Kanban is the Japanese word for card or sign. Tominaga defined the term in 1996 as follows:

“A Kanban is a carrier of information that runs through production with the product and contains the necessary work instructions. A Kanban can also trigger a delivery of new material. So there are different types of Kanbans. As part of a system, the Kanbans are used to ensure that the required goods are produced in the required quantity at the right time “

The basic principle is very simple: instead of compensating for fluctuations in demand using stocks and thus keeping the production process as uniform as possible (push production), the Japanese idea is based on needs. Because with the push supply of production, the upstream production facility simply forwards the material to the subsequent work steps on a specific date. This leads to unnecessary stocks in the run-up to the next production step.

With Kanban, on the other hand, the downstream operation only removes parts in the required quantity and at the required time from the upstream process. If new material is required, the consumer requests the supplier to deliver via the system. When a signal arrives, e.g. a card, the delivering point begins to provide the specified material and store it in a standardized container. Then the container with the card is delivered to an agreed point. The recipient uses the delivered parts up to a minimum stock and then sends the Kanban card back to the supplier.

What types of Kanban are there?

Variations of all kinds are possible because the method should be adapted to the respective circumstances. In the course of the adaptation to new requirements and the continuous improvement of the system, different Kanban classes were created. Already in 1980 a distinction was made in Japan

  • Material Kanban for the production and provision of material that is returned after a container has been opened
  • Signal Kanban as a material Kanban, which is only returned when a certain amount of the container has been used up
  • Transport Kanban, as a request to move a certain material from a storage location to a staging location
  • Limited Kanban, as a material Kanban that is invalid after a certain production quantity

What are the goals of Kanban?

In the meantime, there are a multitude of variations depending on the philosophy. However, the goals that should be achieved with the introduction of Kanban are similar. Goals that are measurable and achievable with the introduction of Kanban:

  • Reduction of lead times
  • Inventory reduction
  • Reduction of rejects and waste
  • Simplification of the organization
  • Increase in flexibility

ABC analysis

The decision about the selection of a product for Kanban provision can be made using various methods. The ABC analysis is a planning and determination method that is used, among other things, in the context of materials management. It examines the extent to which a certain property is concentrated on the individual elements of a set under consideration. With the help of the ABC analysis, the material assortment is divided into A-parts, B-parts and C-parts according to their relative value share in the total value of the procured materials. A quantity – value – ratio investigation takes place. This investigation is based on the knowledge that the material requirements structure of a company is usually characterized in such a way that a regularly low proportion of the types of material used (A-parts) forms the main part of the value of the total procured materials. Types of material with a lower proportion of the total value but a higher proportion are classified as B and C parts.

Looking at the consumption of individual materials over a longer period of time, it can be seen that on the one hand there are materials whose consumption is almost constant, on the other hand there are materials whose consumption is subject to certain fluctuations and finally those with completely irregular consumption.

Kanban XYZ

XYZ analysis

The materials weighted according to the ABC method could therefore also be sorted according to the predictive accuracy of their consumption. The classification symbols mean the following:

  • X-parts: Consumption is constant with only occasional fluctuations; high prediction accuracy.
  • Y-parts: Consumption is subject to greater fluctuations, is increasing or decreasing in terms of trend, or is subject to seasonal fluctuations; medium predictive accuracy.
  • Z-parts: consumption is completely irregular; low forecast accuracy.

Carrying out the ABC analysis in connection with the XYZ analysis is a prerequisite for determining which products are suitable for kanban. The Kanban system can be used for all products with an increasing consumption profile (X products and sometimes Y products). The quantitative fluctuation interval in a planning horizon of one week +/- 5% and one month +/- 30% should not be exceeded. The value of the products (ABC analysis) influences the characteristics of the kanban. Inexpensive C-articles are implemented, for example, in larger container quantities with a high level of security as a kanban circuit. Expensive A-articles are recorded individually in kanban circuits.

Kanban ABC XYC