NH AG

NH CE

WCM Logistics/Customer Service Pillar

Kanban implementation

Supply Chain Management

Industrial Logistics
 Introduction

Kanban is a PULL signalling system to trigger material replenishment: each process on a

production line calls/ pulls the exact number and type of components the process requires,
at just the right time (only when needed).

Kanban means:

看 板
Kan = card ban = signal

• Replenishment is requested through a KANBAN signal. It may have different forms:

- Kanban card: a defined and clearly communicated card is placed at a specific and for line
feeders easily visible location (e.g. at the gravity rack/ or inside a Kanban box) indicating/
resembling the request for new material. The empty container/ box goes to the empty
containers area while the card goes to the supermarket as a signal to supply a new container.
The full container is then supplied to the line, together with the card
- Electronic Kanban: the physical card is replaced by an electronic signal, which is sent through
the system to request the delivery of one or more items
- Visual Kanban: a flag, a light, a rack or anything that - functioning as the card - visually
indicates the need for replenishment
- Empty container: the empty container itself is the signal for replenishment

July 2009 Supply Chain Management Kanban - 2

 Withdrawal and Production Kanban

There are two different types of kanban:

• Withdrawal Kanban: it specifies the type and quantity of parts/components which a

process needs to withdraw. This card is the trigger to retrieve these parts, usually from a
supermarket (where items arrive from an internal preceding process or an external
supplier)
• Production Kanban: it specifies the type and quantity of parts/ components which the
preceding process must produce. This card is the trigger for an internal manufacturing
process or a supplier to actually produce these parts.

Production Kanban Withdrawal Kanban

Machining Machined parts Assembly line

Supermarket

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 Implementation: Plan P D C A

Kanban can be implemented by applying the PDCA method, since it is an iterative process that needs to be
constantly monitored and updated.

1. The Kanban method is applied to B class material

2. Collect data for Kanban card:

- Part: Part Number (p/n), Description
- Point of picking (FROM)
- Point of Use (TO)
- Logistics parameters: Container type (BIN), Quantity per BIN, number of kanban cards in the
loop (to be calculated)
- Name of Kanban Manager and Date of Last Update*

3. Calculate the number of Kanban cards required for each p/n, according to the following formula:

Daily Consumption * Replenishment Time

N. of cards = * Safety Index
N. Parts per container

Safety Index >= 1 (not more than 1.5). It is a subjective coefficient that at the beginning of the implementation can be used if
the replenishment process is not yet stable and a small “safety stock” is accepted in order to avoid parts shortage

* When the kanban card is printed for the first time, Last Update corresponds to the date of creation of the card

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 Implementation: Do (1/3) P D C A

1. Print Kanban card on laminated

paper. Standard tool for printing
Kanban cards is available (please
refer to Visual Management tool for
Label)

2. Arrange a proper pocket for the card

at the side of a container (in case of
lack of pockets Kanban cards can be
put directly inside the container)

3. Build the box to collect the cards at

the workstations

July 2009 Supply Chain Management Kanban - 5

 Implementation: Do (2/3) P D C A

4. Train all the operators involved and implement the Kanban system:

• Kanban cards must be kept in good conditions and managed with care. Each
information must be readable. In case of damage a Kanban card must be
immediately replaced

• The number of Kanban is calculated based on actual material consumption, the

number of parts inside the container and the replenishment time (see Kanban
Implementation, PLAN). If any of those parameters vary, the number of Kanban
in circulation can change consequently. Therefore it is important to review them
periodically and, in case of variations (+/- 15%), renew the calculation

• Discipline is crucial for the Kanban method to work efficiently. Both line worker
(Production) and line feeder (Logistics) have to strictly and timely follow the
rules in order to guarantee on time replenishment

July 2009 Supply Chain Management Kanban - 6

 Implementation: Do (3/3) P D C A

Kanban rules

• A Kanban card is only issued when the component it

represents is used
• Kanban card “pull” from the upstream process to the
downstream one
• Nothing is produced or moved without a Kanban
card
• Only good components (defect-free) are issued
• No over production: the upstream processes only
produce what has been withdrawn
• Components are only issued in the number specified
by the Kanban
• Number of kanban cards in the cycle must be
monitored regularly

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 Implementation: Check P D C A

1. Set up a process for Kanban cards counting regularly (at the beginning once a day) to
check missing or damaged cards
2. Monitor the process in order to guarantee the correct use of the cards by all operators
during different shifts

The table below lists the activities representing a complete cycle

Line Line
# Activities
worker feeder
1 Take the kanban card out of the bin/ container as soon as the last piece* is
taken out and put the card into the kanban collecting box x

2 Collect kanban cards and empty boxes from all the workstations according to a
fixed time schedule (cards and empties could follow different flows) x

3 Bring kanban cards and empty bins to the supermarket /warehouse x

4 Pick up full containers (from the supermarket shelves) or re-fill the empty bins
(decanting in the warehouse) according to the collected cards x

5 Replenish work stations with full containers x

* The kanban card could be posted alternatively when the first piece is picked. In this case one card less in required in the cycle

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 Implementation: Act P D C A

1. In case of a missing or damaged card, reprint it

2. In case of anomalies in the process, analyze them in order to identify the root causes
and re-act accordingly

3. In case that parameters have changed, proceed with a new calculation of the number
of kanban (especially if daily consumption has significantly changed). Reprint new
cards and eliminate the old ones

4. Once the process is stable (meaning that the CHECK phase doesn’t report any
anomaly) proceed towards further extension

The number of kanban should be decreased over time: by constantly reducing the total
number of kanban, continuous improvement is facilitated by concurrently reducing the
overall level of stock in production

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 Stickers for kanban card

As one solution to attach Kanban cards to the bins, stickers (the

same as used in Container Management) can be used.

By attaching the card on the outside of a container instead of

placing it inside:
• damages or dirt (oil) affecting the card can be avoided
• the material is easier to identify, the existence (or not-
existence) of a card easier to verify.

Technical information

R3

30

30
5 30 5 30 5
75

• TESA article code 54657-00009-00 • TESA article code 54657-00019-00 Contact person Mr. ARALDI
• Round sticker on tape: diameter 30mm • Squared sticker mm30x30mm tel. +39 02.25010881 mob. 3492229560
• 2000 stickers roll • 2000 stickers roll idelfonso.araldi@tesa.com
• Price per roll: € 24,00 (€0,012 each sticker) • Price per roll: € 22,00
• Minimum order: 9 roll • Minimum order: 9 roll Other suppliers: 3M, Avery

July 2009 Supply Chain Management Kanban - 10