We have the logistics and delivery systems to stock and ship components on demand.

What is Kanban?

A system of continuous supply of components, parts and supplies, such that workers have what they need, where they need it, when they need it.
The word Kan means "visual" in Japanese and the word "ban" means "card". So Kanban refers to "visual cards".

What is a visual card? It is a visual aid that triggers action.

Here's how Kanban works:

Let's say one of the components needed to make widgets is a 42" stem-bolt and it arrives on pallets. There are 100 stem-bolts on a pallet. When the pallet is empty, the person assembling the widgets takes a card that was attached to the pallet and sends it to the stem-bolt manufacturing area. Another pallet of stem-bolts is then manufactured and sent to the widget assembler.

A new pallet of stem-bolts is not made until a card is received.

This is Kanban, in it's simplest form.

A more realistic example would probably involve at least two pallets. The widget assembler would start working from the second pallet while new stem-bolts were being made to refill the first pallet.

If this was a high volume widget manufacturing facility, each widget assembly station might empty a pallet of stem-bolts in just a few minutes, and there could be 15 or 20 widget assembly stations. Thus there would be a continual flow of cards going back to the stem-bolt manufacturing area that would cause a continual flow of pallets of stem-bolts to be sent to the widget assembly stations.

Kanban is Pull (Demand)

This is called a "pull" type of production system. The number of stem-bolts that are made depends on the customer demand--in other words the number of cards received by the stem-bolt manufacturing area.

Systems other than cards may be used. For example, the empty pallets may be returned to the stem-bolt manufacturing area. Each empty pallet received indicates a need to manufacture 100 more stem-bolts. For other types of components, bins, boxes or cages might be used instead of pallets. Or components might be stored on shelves in the widget assembly area. When a shelf became empty that signals that more components need to be manufactured and the shelf refilled.

In Kanban the method of handling the components is flexible, and depends on the needs of the manufacturing process.