What is Kanban?
Kanban (Japanese for "signboard" or "billboard") is an inventory control system for lean and just-in-time manufacturing environments. Using the Kanban method, companies can organize the chaos that surrounds delivery teams by uncovering and fixing workflow and process bottlenecks. Kanban can optimize processes, properly size inventory levels, and put re-ordering on “autopilot”— sort of.
Kanban cards are a key component. These cards tell a story. Depending on color or location, the card “signals” an action to be done: move production material, move supplier material, build product, cut a PO. A Kanban card can also trigger replenishment when FG products, WIP parts, or RM inventory begin to run low, creating a demand-driven system. A tenant of lean is that demand-driven systems lead to higher turns and correct inventory levels with improved customer service.
Electronic Kanban Systems
Many manufacturers have implemented electronic Kanban (also known as E-Kanban) systems. E-Kanban differs from traditional Kanban by using technology to replace traditional elements – such as Kanban cards – with barcodes and electronic messages. These systems also eliminate manual entry errors and lost cards. E-Kanbans can be integrated into enterprise resource planning (ERP) systems, which enables real-time demand signaling across the supply chain and improved visibility. E-Kanbans also offer the benefit of improved inventory reporting, which is critical to financial statement integrity. Data pulled from E-Kanban systems can be used to optimize inventory levels by effectively tracking supplier lead and replenishment times.
With newer ERP technology, automatic alerts can notify personnel like Kanban cards have traditionally done. While there are great merits in visual systems, electronic systems that pass along similar information can do so more quickly and to a wider audience. Rather than seeing a visual card, a workflow notification or alert can be triggered to take the same inventory actions – move, make, order. At the completion of these tasks, barcode readers can easily and quickly update the inventory position for accurate tracking.
Would implementing an E-Kanban system improve the way your business manages your activities and resources? If so, the experts at Acuity would love to discuss your options and help you create the customized solution that's best for you! Contact us today for more information.