Henry Ford made waves in the industrial world with the assembly line production system he developed in 1913, but it was Toyota's Kanban system that changed the way original equipment manufacturers (OEMs) operated. This "pull system," an integral part of lean manufacturing, was modeled to work in congruence with a Just in Time (JIT) program to help drive productivity. By providing a crystal-clear visibility of products and inventory usage, a Kanban system can help streamline operations, making it an option worth exploring for OEMs looking to move toward lean manufacturing.
How does a Kanban system work?
The word itself translates roughly from Japanese to mean "visual card," and Toyota workers actually used physical signs to regulate the production process. By visualizing each step of manufacturing, workers can more easily indicate when stock needs to be replenished. This way, the OEM is ordering, stocking and using only what is needed to fulfill orders.
How OEMs harness Kanban is up to them, as there are a few different ways to go about it. For instance, the card system can be divided up into a workflow that makes it easy to see what has been finished, what's in production and what still needs to be done. According to Process Excellence Network, it is essential for each item being built to have its own Kanban along every step of its manufacture to ensure any issues with the piece itself, its parts or the available inventory are noticed and handled right away. This stops issues, such as defective parts, in their tracks, whereas a problem that goes unnoticed for a few steps of a build could result in far worse outcomes that stop production and create a financial and time-consuming disaster.
OEMs can also use Kanbans to make it easier for workers to know how much of certain parts and subassemblies they'll need and how much is available. Process Excellence Network reported that while the traditional method was to use actual cards printed with pertinent information, companies often choose other means, from email to sensors to digital programs.
What are the advantages of Kanban systems?
With higher visibility comes the opportunity to iron out any processes and increase the rate of output, which can bring in more revenue and strengthen the OEM's reputation. Lean Kit pointed out that by visualizing the processes, it is easier to find weak points and eliminate redundancies, such as one team building numerous subassemblies while another is just waiting to receive these lots and bottlenecking production. Instead, you can use Kanbans to let the secondary team know when the first finishes each assembly so operations can be more continuous. This is also a great strategy for companies looking to pare down their operations to become leaner. This means they'll need to stock less inventory and reduce production down time, which can lead to more cost efficient manufacturing.
How can using a Kanban system help with inventory replenishment?
You can even involve your supplier in the Kanban system by implementing a vendor managed inventory (VMI) program, utilizing a one- or two-bin inventory management system. By keeping track of inventory needs as you go, you can literally see when one bin is empty and notify your supplier when stores run low so the ordering and shipping process can get rolling before you run out of parts. Some suppliers will even automate this process with barcode labels and scanners or will offer to come in on a regular schedule to check for empty bins and scan them for reorder. This will help to reduce the risk of stock-outs and expedites, which can be costly. Having a steady flow of components and subassemblies managed by your supplier means you don't have to concern your staff with inventory management, and they'll have more time to work on higher-priority production needs.