kanban and logistic operations

Kanban – Law and Order for Logistic Operations

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Kanban is for logistic operations what the law that the simplest path between two points is a straight line was for geometry (and everything involving it). It is a set of clear and simple principles in planning, manufacturing and moving along the production lines which revolutionized the closed production loop first in Toyota factory, then worldwide.

How Did the Kanban Principle Emerge?

Japan emerged in tatters after World War II, having suffered, among massive military losses, two nuclear bomb attacks. Fast and effective industrialization was the only way in which this island nation could survive and grow into what we see today – one of the most technologically advanced countries in the world.

In order to improve logistic operations, the directors of Toyota Motor Company started analyzing the way American supermarket worked at the end of the 1940s. They observed that these large stores stocked only products which sold rapidly, and replenished their shelves as they were emptied by customers. These observations led to the development of the 6 rules of kanban, which means “signboard” in Japanese:

  • The subsequent process picks up the number of items indicated by the kanban at the earlier process.
  • The earlier process manufactures items according to the quantity and sequence indicated by the kanban.
  • No items are manufactured or transported without a kanban.
  • Always attach a kanban to the products.
  • Defective products are put aside and not sent on to the subsequent process.
  • Reducing the number of kanban increases the sensitivity.

These rules were based on a physical item – the kanban, a card containing the details of the entire manufacturing process: number of items to be manufactured, order of manufacturing processes and logistic operations and confirmation of the outflow of products towards the place of delivery.

The Evolution of Kanban and Logistic Operations

The kanban principles have evolved, from the physical card to electronic boards and signals implemented in ERP software and the development of a series of packaging materials and logistic equipment which facilitate kanban practices.

Our experience at Logistic Packaging shows that kanban is the ideal work flow and supply chain principle for a wide variety of companies operating in different industries: manufacturing, warehousing, merchandize distribution and closed logistic loops in the car and electronics industries. Kanban can be applied by small and medium sized enterprises, as well as by large, multinational corporations.

These are a few key advantages of implementing kanban principles in production and handling of goods:

1. Reduced Quantity of WIPs

Work-in-progress, or products under manufacturing, can cause overcrowding in storage facilities if there is no strict correlation between demand and production. The kanban system in manufacturing and logistic operations involves a precise control over the quantity of items manufactures. Orders move from production phase to production phase in strict relation to a specific quantity demanded by a customer (or by an associated production facility).

2. Implementing the Right Packaging Materials Reduces Friction

As we have explained before, kanban principles affected the packaging industry, as well. Product ranges such as storage bins and storage trays, together with specific shelf systems to create ergonomic configurations, were developed keeping in mind the requirements of the kanban manufacturing system:

  • Keep only the necessary quantity of items at the work place
  • Easily replace an empty bin with a full one
  • Quick visual inspection of contents in order to monitor the consumption of items.

These plastic or metal storage bins have a special semi-open front design and rolling rims which facilitate both stacking and arrangement in shelf systems.

3. Focus Teamwork Towards Projects, Rather Than Individual Tasks

Kanban principles treat manufacturing processes and logistic operations as a whole. Therefore, teams are expected to work in a coordinated manner, keeping their focus on achieving the end result. The phases of work are seamlessly integrated, and communication at all levels and all moments during production is a basic prerequisite.

This means that work becomes more efficient, human resources are allocated more effectively, and downtime and manufacturing losses are minimized towards zero.

4. Simple Extrapolation from Production to Other Logistic Operations

Kanban is a one-size-fits-all work principle. It can be easily adapted from managing the workflow on a production line, to managing space usage in a warehouse and to adequate sizing of teams in merchandize distribution hubs. Everything revolves around the electronic kanban board telling everyone exactly what they have to do, what phase their project has reached and when they are supposed to complete it.

5. Fewer Wastes and Losses

Kanban is not just a more efficient work process. It is an entire philosophy which mitigates production losses, mistakes in preparing and sending orders and creates fewer wastes. Thus, kanban is not just a better system for logistic operations; it is the guiding principle towards increased environmental awareness and sustainability.