Kanban

A Lean Manufacturing Tool

A Graphic Products Library Resource

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Protect your
overhead.
 KANBAN
Contents of the Kanban resource guide by Graphic Products, Inc.

IntroducTION.......................................................... pg 1
An Introduction to Kanban
-- Kanban Basics
-- Small Inventories

Benefits.................................................................. pg 3
Benefits of Kanban

Methods.................................................................... pg 4
Basic Methods of Kanban
-- Kanban Cards
-- Kanban Queues

Implementation.................................................... pg 6
Implementation of Kanban
pg 8 Collecting Data for Kanban -- Universal Customer
-- Kanban Preparation
-- Kanban Design

Data Collection................................................... pg 8
Collecting Data for Kanban
-- Process Measurement
-- Data Interpretation & Application

Sustaining............................................................ pg 11
Sustaining Kanban

pg 11 Sustaining Kanban

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The information presented in this guide was obtained from sources whom we deem reliable; Graphic Products, Inc. has made every effort to
ensure this information is correct. However, we do not guarantee accuracy or completeness. Graphic Products, Inc. makes no representations
or warranties of any kind, express or implied. Information in this guide is subject to change without notice. Except as expressly provided for
in writing, the liability of Graphic Products, Inc. arising from the use of this guide is specifically excluded and Graphic Products, Inc. disclaims
all warranties and any liability for damages of any kind and any liability, whether in contract, tort under statute or otherwise, for any injury,
damage or loss whatsoever. No reliance should be placed on information contained in, implied by or inferred from this guide. Users of this
guide should verify all information with ANSI and OSHA sources directly.
 Introduction

An Introduction to Kanban
Most facilities share two common business goals - decrease costs and increase production. How managers go about
accomplishing these goals may vary, but most can be achieved with the aid of Kanban.

Kanban is one of the While Kanban can be used in many businesses, it is

most popular efficiency most often used to improve assembly lines, warehouses
improving systems and other similar industrial facility processes. Anywhere
used in large and small inventories are relied on for production, Kanban has a
facilities. The ultimate place. Where implemented properly, the system is proven
goal of the system is to to help facilities become more time and cost efficient.
bring greater efficiency Implementations not only improve process efficiencies,
to individual processes. they often positively influence unforeseen elements of a
Improvements are facility. Worker safety, morale and even sales are known
achieved through a to improve with Kanban.
combination of regular In English Kanban has several similar meanings.
production research, Translations include instruction card, visible record
planning and the application of visual communication and signboard. All refer to a system where the status of
techniques. Where Kanban is properly implemented, production and inventory are clearly displayed using very
workers no longer guess how much raw materials or simple methods of visual communication. As a result,
components they will need for production. They can processes are streamlined and problems identified.
visually see these needs, so production and similar
processes go uninterrupted — even with small inventories. In this guide, several fundamental Kanban concepts are
addressed to assist a facility in implementation. Keep in
Developed in Japan during the country’s post-WWII mind, not all ideas or methods described in this guide are
reconstruction period, Kanban is credited with helping suitable for all facilities. You must decide what elements
many well known Japanese companies become very are right for the processes you hope to improve.
successful. In fact, one of the largest automobile
manufacturers in the world is credited as the first to
successfully implement Kanban.
Modern American business methods such as Training
Within Industry (TWI) and Total Quality Management
(TQM), developed in the 1930s and 1940s, provided the
foundation for Kanban. Japanese facility managers learned
of these methods during the U.S.-backed reconstruction
effort just after the war. Elements of TWI and TQM
were shared with industrial managers, which led to many
innovative Japanese methods and philosophies. The
Japanese refer to this early industrial period as The Quality
Movement. Several of these innovations are now popularly
used in industrial facilities throughout the world.

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Introduction

Kanban Basics
In industrial-method terms, Kanban is known as a pull
system. This means facilities stock inventory based almost
entirely on orders placed. The inventory is then pulled
through production purely by customer demand.
Kanban, however, offers greater efficiency than
a traditional pull system. Kanban relies on limited
inventories and visual markers to help workers improve
efficiency. Customer orders are then easily tracked from
start to end.

Small Inventories
When Kanban was first developed in Japan, many
facilities were starved for space. This made inventory
storage difficult to find and very expensive. Facilities soon
realized storing large inventories was not cost-effective.
To overcome this obstacle, Japanese managers began
applying new methods to reduce inventories. Instead of
stocking inventory based on projected demands, inventory
was only stocked when customers demanded products.
Many additional benefits were soon realized by these
Kit includes: early implementations. As an example, facilities rarely
overproduced because limited supplies naturally stop

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facility’s production demands.

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• Orange
• Green
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managers and workers control inventory size with
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 Benefits

Benefits of Kanban
By combining very simple controls and methods, Kanban will naturally create a “check-and-balance” system. Workers will no
longer be guided by facility-wide production goals. Instead, their goal is to ensure inventory stocks and individual production
duties keep up with customer order demands and don’t exceed them.

Once Kanban is properly implemented, workers Working with small

operating assembly stations will naturally gauge their own buffers provides many
work performance and adjust accordingly. As a result, benefits. One benefit
workers become more focused on meeting upstream is the system’s natural
demands and less on individual achievements. ability to expose
inefficiencies in
Common benefits include: production. Inventory
▪▪ Lowered overhead costs stocks are easy to
monitor and issues
▪▪ Standardized production goals
are quickly identified, With Kanban implemented station
▪▪ Increased efficiency almost as they happen. operators find ways to be more
efficient with the inventory on hand.
▪▪ Reduced obsolete inventory Solutions can then
be found, well before an entire process is affected. In
▪▪ More control for workers Kanban, unnecessary overstocking or obsolete items never
▪▪ Improved flow take valuable storage space. These limits help workers
focus on filling orders with greater efficiency.
▪▪ Prevention of overproduction
Since station operators continually pull the supplies
▪▪ Progress reports for managers
they need from proceeding stations, production goals are
▪▪ Improved responsiveness to changes in demand naturally established by customer demand. In Kanban,
the production goal for each station operator is to always
To achieve a truly self-managed process, visual keep pace with a system’s continual pull. This eliminates
communication is used to help workers easily identify wasted time and energy by focusing production on actual
inventory levels at each step in a process. Strategically needs and not desired goals.
placed labels and signs give workers minute-by-minute
production goals. In turn, processes have greater Kanban is designed to help implementation teams
transparency - promoting efficiency. make precise adjustments to a process. Processes must be
programmed to operate with tight buffers for adjustments
One of Kanban’s most celebrated benefits is its to function properly. Use visual communication to help
inherent ability to help processes function with very workers see when their station is behind or ahead of
limited inventories. In fact, Kanban is known to reduce production. These visual cues provide immediate feedback
inventories by as much as 75%. Inventory reductions to help workers rapidly adjust to ongoing changes in
decrease overhead costs, increase efficiency and save pull. Visual cue adjustments can be made at any step in a
money. process to improve inventory flow.
Since nothing in Kanban is ever produced until a Kanban promotes minimizing actions within a process.
customer’s order is placed, large stockpiles of inventory Actions involved in each step of a process should be
are unnecessary. Kanban helps facilities program boiled down to the least number of steps possible. This
processes so they are always supplied with what they way, materials are never moved or stored twice in a single
actually need and shortages are eliminated. Station process. Goods immediately enter a process the moment
operators learn to work with smaller buffers and find ways they land on the loading dock.
to be more efficient with the inventory on hand.

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 Methods

Basic Methods of Kanban

Kanban Cards and Kanban Queues are two common methods that make Kanban successful.

Kanban Cards To document production times and other instructions,

Kanban cards should include an assigned production unit
One of the earliest forms of Kanban is a simple card-
number and space for additional production information,
based system known as Kanban Cards.
like time in and time out.
Modern facilities may use more complex, multi-layered
KANBAN CARDS forms of the Kanban Card system. Cards may include
carbon copies so each station or drop point within a
process keeps a physical record of each unit they produce.
The last copy may even be returned to the hanging file to
display the current production status to individual work
Fig 1 areas.
Other facilities have moved to a software based Kanban
card. This system relies on barcoded labels and electronic
databases to track production and inventory. Managers
can track production from any network or WiFi location ─
providing greater control over a process.
Kanban cards are normally printed on a durable,
Fig 2 industrial-grade material so they survive rough handling
common to production processes. DuraLabel’s DuraTag™
and magnetic supplies are both made of industrial-grade
materials ideal for use as Kanban cards. DuraLabel
Production and warehouse facilities use this system to
printers make it easy to design cards in-house so they look
track inventory and control production. Even today,
professional. With an in-house industrial printer, cards can
Kanban cards are popularly used to track the status of
be printed on-demand and custom designed with things
unfinished units and provide production with
like barcodes and special fields for improved tracking.
special instructions.
To initiate production, Kanban cards are issued
to the first operator in a process. Each card visually
communicates important details about the order and
authorizes production. Stationary barcode scanners
can be positioned at
In the example above (Fig 1), the first station operator strategic locations to
attaches an issued Kanban card to the production unit’s provide “real-time”
storage container. The card remains attached to the tracking updates.
container throughout production. This provides all
subsequent station operators written authorization to DuraTag™ is ideal for printing
produce one unit and helps them see they are filling an Kanban Cards with barcodes,
company logos and other
actual customer order.
critical information.
Once the production unit and its associated Kanban
card arrive at the end of a process, the card is removed
and returned to the hanging file (Fig 2). Empty slots in the
hanging file visually communicate how many orders have
been issued and how many more must be produced to fill
all orders. Placing the hanging file in a central location
gives all workers access to the current production status.

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Methods

Kanban Queues
Warehouse floors are easily and economically marked
to indicate proper locations for palletized or other
large container storage. Kanban queues help visually
communicate dedicated storage locations to all workers.
Floor markings can be used help facilities organize
inventory or finished products. This visual communication
also makes inventory easy to locate and identify so stocks
are tightly controlled.
In Fig 3, additional inventory in the upstream queue
at Station 1 alerts the operator at Station 2 to replenish
his own queue. Queues are restocked immediately so
customer orders are filled on time.
When customer orders increase, production naturally
adjusts to meet these new demands. To avoid shortages,
program queues with a small, but necessary buffer.
Extra inventory within a process provides flexibility
so adjustments are seamless throughout a shift. Just
remember not to overstock buffers. The system depends
on limited inventories to function properly.
For rolling, or other moving inventories, colors can be
designed into queues. Workers use these colors to help
maintain accurate stocks and improve process flow. In
Fig 4, queues are marked with stop-light coloring to help
station operators react to pulls in demand as it happens.
With a properly programmed queue, time is never
wasted calculating upstream or a downstream demands.
Needs are visually communicated as stocks are removed.
Colors reveal downstream and upstream demands at a
Fig 3
glance ─ eliminating guesswork and overproduction.

Station 1 Station 2 Station 3

Fig 4

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 Implementation

Implementation of Kanban
Teach the basics of Kanban to all employees during facility-wide meetings. How it will be implemented in your facility should be
understood by all to be truly successful.

Kanban implementations can be as simple or complex as you make them. All require discipline and facility-wide support
to be successful. This is why it’s critical for all employees to understand the benefits of Kanban prior to implementation.
Once management is prepared to implement Kanban, form an implementation team to develop and manage the system.
Invite personnel from all facility levels to participate as members of this team. Having teams with varied perspectives
invites more feedback for planning. For a truly successful implementation, teams should meet regularly so issues and
concerns can be discussed and resolved.

Universal Customer
In a Kanban facility, workers are expected to treat
coworkers and managers as customers. Each employee
is asked to take it upon themselves to produce the best
possible products and services for their many customers.
The philosophy benefits a process in many ways. For
example, station operators in an assembly line consider a
downstream station operator as a customer instead of just
a coworker. They are motivated to provide quality goods
and services downstream, which results in a higher quality Benefits of “Universal Customer”:
product.
▪▪ Better communication
Satisfying the needs of coworkers and managers should
be the goal of all employees. When a worker’s customers ▪▪ Higher quality
are happy, it reflects positively on them. Satisfying the ▪▪ Lower production costs
needs of others helps workers take a personal interest in
the job they do. ▪▪ Less wasted-time formulating ideas

Treating coworkers and managers as customers has ▪▪ Reduced production lead times
always been much more than just a business philosophy Since Kanban helps workers focus on inventory and
in Japan. It’s traditional cultural. Some claim Japan’s production efficiency, the system easily integrates with
dedication to satisfying the customer is the main reason a number of popular Lean Manufacturing systems,
for their success. processes and philosophies.
Japanese employees are credited as the first to formally If your facility has not already implemented Lean,
apply universal customer to industrial manufacturing Kanban is an excellent first step. An implementation
and did so as early as the 1960s. Since then, employees shows how basic efficiency improvements are made
at facilities around the world have applied similar in Lean and the role visual communication plays. The
philosophies to improve other Lean methods and systems. system is often used to pave the way for more complex
implementations like Lean.

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Implementation

Kanban Preparation actions into single events. Streamlining a process into an

uninterrupted flow of production is the ultimate goal.
Kanban team leaders should begin researching and
documenting facility process elements. Diagrams are Implementation team members research each action or
one of the best ways to document a process and describe step involved in a process and then consider alternative
how unfinished products travel through a process. Good techniques and tools to see if steps can be streamlined
diagrams will continue to offer Kanban team leaders into fewer actions. Whenever an unnecessary action is
excellent reference. eliminated, costs are reduced and efficiency is improved.
Since diagrams help describe processes in simple and Keep in mind, the path materials take should never
very visual terms, they expose inefficiencies more clearly. represent a single process. As an example, manufacturing
Once identified, team members can use process diagrams facilities often retool assembly equipment to produce
to develop and implement more effective Kanban different products.
techniques and examine individual process stages more Different tools or
closely. equipment are generally
required at some point
The first stage in a Kanban process is a customer order
when a different product
and the last stage is delivery of a finished product. The
must pass through
assembly of each product type makes up an individual Spend less time sifting through
the same assembly inventory when color-coding is used
process.
line. Identifying each for labeling products, components
For the life of a facility, processes should be viewed as process by a finished and raw material storage. Print
imperfect. Team leaders should continuously look for new Kanban Cards in-house with
good ensures data
repositionable tape and attached
ways to reduce inefficiencies and work to combine related accuracy. to most clean surfaces.

Kanban Design Just like an internal facility process, diagrams can be

used to describe each stage in an external process. This
For Kanban to provide the greatest return on investment,
is called value stream mapping. Diagrams are used to
facility managers must be willing to make considerable
help expose external inefficiencies so team members
changes to their operations. In some cases, this may
can modify processes where necessary. As an example,
actually require relocating a process or facility. Keep in
delivery of a specific material would be described as an
mind, the goal of Kanban is to continuously strive for
individual process and stages would be identified and
the most efficient processes possible. Finished products
indicate man-hours, time and cost. This diagram would
should provide the customer with the greatest possible
offer excellent reference when researching relocation sites.
quality and value.
Facility layout is another critical element to consider
Access to materials, utilities and other critical process
in Kanban. Process diagrams will likely expose
resources should be continuously monitored by Kanban
bottlenecks and other process delays due to poor layout.
team members. Where costs exceed benefits, relocation
Ensure materials flow uninterrupted through a process
may be required. Relocating a plant may dramatically
by modifying layout where possible. As an example,
improve facility efficiency and, in some cases, save
it may be beneficial to reorganize assembly stations so
facilities from becoming obsolete.
interruptions in flow are eliminated. Other considerations
include workspace. Workers are often more efficient when
provided with adequate space. Eliminate obstacles so
routine tasks are performed efficiently and safely.
Well researched diagrams of all facility processes will
be beneficial in helping your team streamline production
and improve efficiency. Update your diagrams whenever
facility layout changes are considered. The goal is to
Compare costs versus benefits of your facility’s location to decide continually strive for maximum efficiency using the best
if relocation is the best option increase facility efficiency.
data available.

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 Data Collection

Collecting Data for Kanban

Sample data from all stages within a process to maximize process efficiency. Complete and reliable data results in more
accurate changes to processes.

Implementation teams should develop a disciplined The following list describes several examples of common
schedule for data collection. Longer periods will provide facility data collection guidelines:
more accuracy, but may be unrealistic for many processes. ▪▪ Processes should be divided by individual finished
In large facilities, with multiple processes, team products. Changeovers create separate processes.
members should be assigned to collect data from
▪▪ Data collectors should have access to computers to store
processes they are most familiar with. Refer to previously
data electronically. Fig 5 shows process data stored in a
diagramed process steps to help with data collection
Microsoft® Excel spreadsheet.
research.
▪▪ Videotaping the production of a single unit through a
In Kanban, data is collected regularly from each
individual stage in a process. This generally provides data complete production process offers valuable information.
collectors with measurable events occurring at each step. ▪▪ To increase data collection efficiency, all production units
Data collections should sample production times, and related components or materials should be assigned
maintenance times, downtimes and retooling times. In a reference number.
manufacturing, and some warehouse processes, units
produced and rejects are generally sampled for the
collection period.
Collections must be regularly scheduled and occur BLEACHED FLOUR PROCESS
STATION 3 (Avg. per week)
over an established sampling period. Depending on
Product Number 75Q-211
the accuracy required, a collection period could be a

E
Product Name Bleached
week, several months or longer. Since Kanban works to
streamline processes, data collectors will find it much Production Rate 1498

easier to take accurate samplings once Kanban is fully

implemented.
PL
Production Order Demand

Time Per Drum

1500

35 sec.
M
Batch Size 1
To ensure the data is as accurate as possible, a calendar
of collection days should be created and provided to Retooling Time 15 min.
SA

Kanban team leaders. Collections must always fall within Preventative Maintenance 10 min.

established sampling periods, but occur randomly. For Downtime 15 min.

example, one collection may occur at the start of a shift Reject Rate 5
and another may start at the end of a shift. Mix these Fig 5
times up so data contains a good cross section of all shifts.
Extenuating factors, such as power outages or equipment
failures, are known to skew data. Document these
occurrences so their effects are factored in.
From this point forward, data collections should be a
regularly occurring activity for Kanban team leaders and
continue for the life of a process. Create data collection
guidelines to ensure accuracy.

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Data Collection

Process Measurement
Kanban data collection should focus on measuring
the routine elements of a process. These are generally
measurements of time and production. As an example,
the assembly of a single component by a station might
be one measurement.
Once team members define what data will be
collected, build a collection checklist for Kanban team
leaders to reference. Having a checklist ensures the
same process elements are always sampled. The goal
should always be to collect reliable data so process
modifications or adjustments are always accurate and Data collection is an important step of Kanban that helps to
improve efficiency. assess what facility processes may need adjustment.

The following measurement examples are commonly used in manufacturing processes. Implementation teams will need to
research whether these measurements apply, or develop a more applicable set of measurements.

▪▪ Batch Size – The smallest number of units a station ▪▪ Retooling Times – This is the average time it takes for
produces in one production run. As an example, the process tools to be changed over to produce a different
batch size for canned beverage packaging is commonly product. Lost time for shut-downs, clean-ups and start-ups
six. Automated tools generally determine batch sizes in are factored in.
modern production facilities. Handmade items normally ▪▪ Downtime – Any unscheduled stop in production. This
have a batch size of one. includes any unscheduled repair, employee emergency,
▪▪ Station Production Rate – The average number of etc. Lunches, breaks and scheduled maintenance periods
batches a station produces during the established are not factored in.
sampling period. ▪▪ Reject Rate – All finished products and materials
▪▪ Production Order Demand – The average number of removed from a process.
orders demanded. This will help you calculate production
requirements. As an example, a production order
demand of 100 finished units might require 100 man
hours to produce.

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Data Collection

Data Interpretation & Application Depending on process type, many popular efficiency
formulas can be used to calculate the efficiency of process
As your implementation team compiles data, better
elements.
comparisons will be possible and trends more apparent.
Comparisons may occasionally show unusual data. Never In manufacturing, popular supply chain management
hesitate to retake a collection when this occurs. Incorrect formulas are used to calculate the Reject Rate, Production
data diminishes Kanban’s effectiveness and can even Unit, Production Time, Scheduled Production Time,
harm a process. This is why it is always better for data Scheduled Retooling Time and Buffer Quantity. Once
collection to be accurate, than fast. Kanban team leaders select a formula for each, facility
improvements can be tracked and displayed as a single
Setting guidelines can help Kanban team leaders avoid
facility Kanban Score.
common shortcuts and focus on consistency and accuracy.
As part of the guidelines, encourage team leaders to As your team begins to record Kanban Scores, use
research what’s really happening in a process. Document the results of these calculations as your team’s basis
any unusual activities or discoveries as a routine part of for process redesigns. As an example, converting raw
their collections. Data collectors will be the ears and eyes material and component storage to Kanban queues will
of the process. likely decrease lengthy production times. Support team
members’ creativity and ingenuity. They will be important
Once complete, data should be transferred into an
assets as you and your team tackle a redesign.
electronic spreadsheet. Format the spreadsheet to display
each process individually. Breaking data up by process Over time, buffers used to ensure sufficient station
helps organize data into useful and accessible groups. inventory should be fine-tuned. Research shipping terms,
Convert the spreadsheet into graphs and charts to production lead times, vendor lead times and a facility’s
provide a more complete picture of a process. Highlight own level of comfort to set buffers. As adjustments are
improvements and issues. made, Kanban scores should always improve. Help this to
occur by keeping workers focused on meeting customer
To make the most of your team’s data, develop a set of
orders and eliminating over production.
simple formulas to help gauge efficiency for all facility
processes. This figure will be your Kanban score and can Process stations generally find their optimum buffer
be calculated by averaging all process scores within a quantity through trial and error. For example, a very small
facility. Track Kanban scores on a chart and share them inventory buffer may result in stock shortages at one
with facility employees by displaying them on posters station seven-days-a-year. By raising this level slightly, a
(Fig 6). station may completely eliminate shortages and, in turn,
improve their Kanban Score.
Consultants and books are often valuable resources.
Both can provide detailed directions on how to apply
specific Kanban methods. One of the more popular
Kanban books is Kanban Made Simple by John M. Gross
and Kennith R. McInnis. The book contains many useful
process formulas to help your team tailor the right system
for your specific process type.

Display facility Kanban achievement scores on posters at

strategic locations. Visible scores provide workers with the
feedback they need to improve. In this example, a facility has
chosen to display the status of a “Kanban Score.” A score
is often calculated using a set of custom formulas based
on production time, supply efficiency and several other key
process measurements.
Fig 6

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 Sustaining

Sustaining Kanban
Ensure Kanban continues to benefit the processes it’s
applied to. Use the following tips to help sustain Kanban for
the long-run.

Since processes are so different, there are many

Kanban methods and techniques not discussed in this
guide. Only general applications are covered for basic
implementations. Over time, Kanban teams should
consider developing custom methods and techniques
to improve data collection and efficiency. Kanban The cooperation of all employees to continually improve facility-
wide processes will help to ensure the success of Kanban.
should continually change to improve efficiency. This is
especially true as new technology becomes available and
Kanban is best implemented alongside other popularly
facility needs change. Keep Kanban flexible so methods
used “Lean Manufacturing” systems and philosophies.
and techniques are adaptable to changes. Processes must
Two of these are 5S and Kaizen. The two go hand-in-hand
always be operating at their optimum efficiency.
with most Kanban implementations. Having both in place
Program the processes in your facility to rely on the paves the way for a more successful Lean Manufacturing
most efficient level of inventory. Do this by limiting implementation.
inventory stocks so they never exceed customer demands.
Make sure to share your Kanban success stories. Show
Keep in mind, Kanban relies on facility-wide reductions in cost and resulting profits by displaying these
participation to improve existing implementations. successes on highly visible banners. This helps employees
Feedback should be encouraged from all employees. Their see the fruit of their labor and encourages improvement.
unique perspectives will help guide your implementation In time, using these techniques will help Kanban become
team to more accurate solutions and foster continued an accepted practice and integral element of a facility’s
support for Kanban’s sustained use. overall operations.

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