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Principle of the KANBAN system

KANBAN (small card, label in Japanese) is a system developed at the Toyota Company which applies the principle of production on demand in production management. Sometimes it is also called a real-time management system. The products manufactured are only those which are actually required by the customer in the quantity and at the time at which the product is required. The KANBAN system precisely defines supplier-customer relations, i.e. circles of workplaces that supply and take both the material and products-in-progress between each other.

The KANBAN systems makes use of warnings of supplies dropping below the level specified. This warning is a command for the start of production for the pre-production level.

The costs for its introduction compared to other systems of workshop control are negligible. This fact can be supported by the following data, which were obtained through an analysis of 100 enterprises where the KANBAN system has been implemented:

  • Reduction of supply in production of 60–90 %,
  • Reduction of adjusting times of approx. 95 %,
  • Shortening of production times of 50–80 %,
  • Reduction of the area needed of approx. 50 %,
  • Reduction of personnel costs of approx. 60 %,
  • Reduction of quality costs of 20–60 %.

Reasons for implementing the KANBAN control system

  • Reduction of production batch sizes which can result in a more flexible response to customer needs.
  • Quick response to requirements.
  • Quality control is unnecessary.
  • Option of pre-completion (completion in advance).
  • Reduction of error rate.
  • Reduced transport costs.
  • Reduced costs for identification of repeated information.
  • Lower number of goods received.
  • No individual demands or orders.
  • No warehousing costs.
  • Payment after goods consumption.
  • It is not necessary to monitor term orders.
  • Release of capital due to stock supply reduction.
  • Checking of delivery notes and invoices is considerably simplified.
  • Simplicity (simple rules of management mostly by mechanical means).
  • Lower number of parts in circulation.
  • Lower requirements for space/area and lower losses due to poor quality production.
  • Production just-in-time, when you need it (Just-in-Time).
  • Visual management system (visual perception of highlighted information).
  • Reduction of acquisition time.
  • Business relations made transparent.
  • In addition to that, fasteners fall in the category of so-called C items, about which it is known that they are cheap to purchase but costly to acquire. The well-proven rule is that the total value of these items is formed of acquisition (80 %) and only 20 % of their own value.