With the implementation of Just in Time (JIT) production techniques to any process, there is the need for companies to adopt a method capable of ensuring production among other processes are uninterrupted. No wonder, firms have applied the Kanban system, a model allowing for the implementation and control of the JIT materials. With the JIT approach being adopted by the Toyota Production System in the early 1950’s, the intention was to have some form of lean manufacturing that optimized and improved the efficiency of manufacturing. The approach worked by reducing manufacturing lead time through elimination of waste. The Kanban system was implemented in lean manufacturing and just-in-time manufacturing to act as an inventory-control system that controlled the supply chain (Monden 3-8).
According to Monden (3-8), fluctuations in demand and consumers’ requirements causing uncertainties have caused many companies to seek improvements in manufacturing processes through the Kanban system. Through the system, firms can manufacture and supply the right goods, in the right quantity, at the appropriate place and time. As a result, inventory reduction to minimum levels, as well as increased flexibility of manufacturing has been realized. Any company that adopts the Kanban system is able to reduce its operational costs and consequently enhancing market competitiveness. The system works through triggering signals of production for products based on the actual demands and requirements of the customers, and hence acting as a system for inventory stock control. The Kanban card dictates the optimum production parameters and thus the card controls the system. It authorizes the production of any commodity to restock products that have already been consumed by customers or any subsequent process. In essence, the system has proven to be of significant benefit in increasing the flexibility and efficiency of companies in their manufacturing as per the customer needs.
The initial implementation of just-in-time manufacturing as a management philosophy was geared toward the elimination of wastes by producing only the right quantity and combination of parts. The motivation was that there was a lot of waste resulting from any cost-adding activity but without any value addition to the product (Monden 3-8). For instance, the acts of storing products or transfer of inventories from one location to another were some of such challenges. In the production line, JIT became an important tool to minimize non-value-adding processes and non-moving inventories. The result would me better on-time deliver, lesser spatial requirements, shorter throughput times, lower costs, and higher utilization of equipment. Monden (3-8) adds that the system defined the flow of production and set up the production floor in a manner that materials stream as they get manufactured through the line was unimpeded and smooth. The material waiting time was thus reduced because capacities at several work stations through which materials pass were evenly matched and balanced. The pull system thus became a significant aspect of moving inventories through the line of production. It is the requirement of the next station that dictates the production of a particular station. As companies developed the Kanban system, it became a significant advancement as the Kanban card became useful in facilitating the execution of the pull system. Kanbans contain the information on the lots and involved quantities and guarantee that there is no possibility for any part that cannot be processed in succeeding stations to be produced. Two types of kanban’s are highlighted in Adnan et al. (1-11); production and conveyance Kanbans (P-kanban and C-kanban respectively). The P-kanban highlights the need for the production of more parts whereas the c-kanban denotes the need for the delivery of more parts to the subsequent station. Therefore, such a system dictates that without the authorization by the P-kanban, no parts can be produced. C-kanbans facilitate the pulling or withdrawal of units from the previous station.
The functionality of the Kanban system draws from Taichi Ohno’s observation in the 1940’s of how supermarkets handled inventories. Supermarkets at that period only restocked items when needed and hence Toyota’s Ohno applied the idea of restocking. With the goal of continually maintaining the minimum stock amount through the Kanban inventory system, companies resorted to monitoring goods sold and restocking accordingly. As Adnan et al. (1-11) put it; the system thus signals the delivery of a new shipment once an item is depleted. Through the replenishing cycle, it is possible to track the signal to place orders. Once it is possible to track the signal for ordering, the possibility of tracking how often restocking is needed is also enhanced. It has already been mentioned that Kanban cars signal when there are needs to restock, but bins can also be utilized. Therefore, there is reliance on visual cues in the process of beginning restocking. There are two containers of inventory for workers that work through one bin’s supplies before moving on to the next. Emptying of the first bin sends the trigger for reordering inventory such that by the time the worker gets to the end of a second bin, the stock will be refilled. The determination of the amount of stock in one bin must take into consideration the length of time it will take to obtain new inventory from the supplier. It thus follows that there is a lag in production when stock cannot be replenished by the time the second bin empties.
The benefits of the Kaban system that guarantees a logical approach to inventory levels monitoring and meeting the demands of customers cannot be overstated. Even so, the implementation of the system must involve an assessment of the numerous benefits as well as the potential drawbacks. The benefits of the Kanban system include the reduction of inventory levels and costs. Without a lot of inventory to store, companies have more space available to work (“5 Innovative Uses of a Kanban Inventory System”). It is also possible to save money because only the needed amount of inventory is stocked. Secondly, the system allows for customer demands to determine needs. Businesses are able to easily identify the well-selling products because restocking occurs after inventory is depleted. Any sign of rare replenishment means that the product is not a high-demand item. Thirdly, the Kanban system ensures that the production area has no storage. Such is possible because parts are delivered to the line of production when needed and hence space is saved for ample room for workers to assemble products. Fourthly, it is also possible for managers to acquire progress reports through the system. The Kanban software offers analytics that indicate the quantities of products produced and the time it takes to produce and hence managers can plan, manage, and improve workflow. The fifth benefit is that the system reduces obsolete inventory because there is no overproduction and storage for long periods. Related is the idea that there is prevention of overproduction because only items needed are pulled. Lastly, lean inventory is a benefit that ensures that there is no excessive inventory and hence elimination of obsolete and defective stock items (“5 Innovative Uses of a Kanban Inventory System”).
Nevertheless, the Kanban inventory system comes with its pitfalls especially related to its implementation. As per “5 Innovative Uses of a Kanban Inventory System,” it will take time to establish how much inventory should be ordered when restocking because current inventory amounts must be monitored. As a result, figuring out inventory patterns and needs may experience initial fluctuation in bin levels. More so, there is bound to be slow production as the firm figures out Kanban levels. The time it takes suppliers to deliver items is also a necessary matter to consider and hence consuming time. Nevertheless, there are Kanban formulas that can be beneficial in the initial setup of the system. Even if it will take a series of attempts to understand existing inventory flow and processes of inventory, the system will eventually match the processes and hence enhancement of efficiency and reduction of costs and wastes.
In conclusion, the just-in-time production process is highlighted as implementing the Kanban system in its inventory management. Uncertainties in the market oftentimes render the demands for products to fluctuate. As a result, businesses may incur increased storage costs and even wastes because of products staying long in stock. More so, when the demand is high, businesses may not keep up with the customer needs if there is no system to monitor market elements. The Kanban system thus comes in handy in ensuring that companies produce items in line with the needs of the customers. Through the system, it is possible to replenish stocks at the right time, place, and with the right quantities.