Kanban is Japanese for card, and is a method of just-in-time production that uses standard containers or lot sizes with a single card attacthed to each. A card or empty container is a signal for replenishment.
Kanban flows are defined by setting up kanban circuits per part and location to supply.
The kanban planning process includes all the activities and supporting tools necessary to determine the correct number of kanbans to use for a part. The system provides the following tools to help with this process:
Kanban planning is an ongoing process, performed periodically as conditions change and demand for kanban items fluctuates. The planning cycle for a circuit is as follows:
Each kanban circuit has two sets of kanban quantities: the current kanban quantities in use on the shop floor, and new, recalculated quantities for use in planning and what-if analysis. By looking at the status of each circuit, you can identify circuits where the new numbers indicate a change in the number or size of kanbans. Once satisfied with the new plans, you can accept the recalculated values. The system automatically stores the current values in a history record and transfers the current values to the new values. The history record provides a way to track the progress of each circuit and to monitor inventory trends.
There are three types of kanban execution, distinguished by the signal type that you select for the circuit:
| Signal Type | Description |
| Visual (Not Electronic) | Replenishment signals are communicated manually rather than electronically through the system. No order, schedule, or transport tasks are launched. Backflush typically is used to account for component parts. Unscheduled production receipts are used to account for completed production. |
| Electronic | Replenishment signals are communicated electronically through the system rather than manually. You begin the process by creating a Kanban request in the system. This request is passed to the ordering system appropriate to the circuit: Move circuit = Inventory Transport Tasks or Distribution Order; Production circuit = Shop Requisitions, Orders, or Production Schedules; Supplier circuit = Purchase Requisitions, Orders, or Supplier Schedule Call-Off. The ordering system is controlled using the combination of Part Type and Supply Code defined for the Inventory Part record. Note: DOP is not a valid replenishment mechanism for Kanban. |
| Automatic (Reorder Point) | The system has complete control over replenishment, continuously monitoring the inventory level at the usage location for the circuit. When inventory drops below a specified level, the system automatically signals the need for replenishment. Although not a traditional Kanban concept, this hands-off method of replenishment is appropriate for in-control component stocks, e.g., small amounts of scrap. Typically, backflush reduces the quantities of component parts until the reorder point is reached. The system then sends a replenishment signal to the appropriate warehouse, production line, or supplier. |
Electronic or Automatic (Reorder Point) replenishment is always a closed-loop system. To function properly, it must follow this cycle: