Lean Production has its Roots in Kanban

Lean Production has its roots in Kanban – a scheduling system for JIT production developed in the early 1950s by Taiichi Ohno, an industrial engineer at Toyota.

Our company, Kanban Logistics, took its name from this system because of our strategic focus on working with North Carolina manufacturers to streamline their inbound supply chains.

Kanban is a visual signal used to trigger an action. Roughly translated, it means “card you can see.” At its simplest, Kanban is a card with an inventory number attached to a part. When that part is pulled for use, the Kanban card is detached and sent up the supply chain as a replenishment request. This ensures that inventory levels are based on actual customer orders rather than forecasts.

Kanban in our everyday lives

If you think about it, we see Kanban-like systems used often in our daily lives – outside of logistics. For instance, if you operate a business that uses checks, you can order hundreds or thousands at a time, or you can order a small batch. If you order in smaller quantities, the bank will include a colorful insert in the check sequence. That insert, placed at the point where you have a limited number of checks left, will remind you to order more. In theory, you will receive your new checks just as the old supply runs out. In other words, just in time.

Lean production and Kanban are about keeping it simple

Of course today’s modern inventory management systems automate the lean production process, ensuring that companies can keep inventory in check while managing thousands, even millions, of different parts. (Consider this: a Boeing 747-400 has six million parts!) But it’s basic Kanban principles upon which this sophisticated software has been built.

The simplicity of the Kanban approach reminds us that, in lean production, the best approach is to PULL inventory based on demand, not to PUSH inventory based on a forecast.