Toyota’s Kanban System—Pull Where You Must

A true one-piece-flow system would be a zero-inventory system where goods just appear when they are needed by the customer. The closest system Toyota has devised to achieve this is the one-piece flow cell that builds to order only at the precise time the product is needed. But when pure flow is not possible because processes are too far apart or the cycle times to perform the operations vary a great deal, the next best choice is often Toyota’s kanban system.

Rother and Shook (1999), in a widely circulated article about Toyota’s Production System called Learning to See, say, “Flow where you can, pull where you must.” If you want to design lean systems, repeat this phrase every day when you get up to start the day. You can go far with this simple principle. Where it is not possible to create a one-piece flow, the next best thing is to design a pull system with some inventory.

Consider a pull system in a Toyota assembly plant. Orders accumulate from car dealerships. Production control creates a leveled schedule. For example, they make a white Camry, followed by a green Camry, followed by a Red Avalon, and so on. Each of these cars has a whole set of options associated with it. That schedule is sent to the body shop, where stamped steel panels (from a “supermarket” of pre-stamped panels) are welded together into a body. Stamping the panels is a much faster operation than the takt time in assembly plants (e.g., one second per stamped panel versus 60-second takt times in a plant is typical), so putting them into a one-piece flow is not practical. They would be productive one out of every 60 seconds. So a pull system is used. At a certain trigger point when a certain number of steel panels have been used by the body shop, a kanban goes back to a stamping press, ordering it to make another batch to replenish the store.

Similarly, when assembly line workers begin to use parts from bins (hinges, door handles, windshield wipers), they take out a kanban card and put it in a mailbox. A material handler will come on a timed route and pick it up and go back to a store to replenish what is used on the assembly line. Another material handler will replenish the store based on parts from a supermarket of supplier parts. This will trigger an order back to parts suppliers. And so on. Illustrates a system like this, where parts in the assembly plant are replenished from a supplier. The process starts at the assembly factory (on the right side of the diagram), then “withdrawal kanban” and empty containers are sent by truck back to the supplier to be refilled. The supplier keeps a small store of finished parts in a “parts store,” which are used to refill the kanban and their empty containers. When parts are withdrawn from the parts store shelves, they must be replenished by sending a kanban and an empty container back to the production cell where new parts are built and then sent to refill the “parts store” shelves. Information, orders for parts in the form of kanban, flows backward from the customer (the assembly plant). Materials, in this case parts, are sent forward to the customer.

It is fascinating to watch this work, with so many parts and materials moving through the facility in a rhythm. In a large assembly plant like the one in Georgetown, Kentucky, there are thousands of parts moving about. Alongside the assembly line, there are small bins of parts and small bins are being moved from neatly organized stores. It is hard to imagine how a computer system could do such a good job of orchestrating such a complex movement of parts. When you find out the computer is not doing the orchestration, but rather small, laminated cards moving about, it is shocking.

Yet TPS experts get very impatient and even irritated when they hear people rave and focus on kanban as if it is the Toyota Production System. Kanban is a fascinating concept and it is fun to watch. I have led many tours of lean plants and you can spend hours talking about the technical details of many different types of kanban systems. When is the kanban triggered? How are the quantities calculated? What do you do if a kanban gets lost? But that is not the point. While you do have to know those things when you set up your system, they are pretty straightforward technically. The challenge is to develop a learning organization that will find ways to reduce the number of kanban and thereby reduce and finally eliminate the inventory buffer. Remember: the kanban is an organized system of inventory buffers and, according to Ohno, inventory is waste, whether it is in a push system or a pull system. So kanban is something you strive to get rid of, not to be proud of. In fact, one of the major benefits of using kanban is that it is easy to use it to force improvement in your production system. Let’s say that you have printed up four kanban. Each one corresponds to a bin of parts. The rule is that a bin cannot move unless a kanban is traveling with it. Take one kanban and throw it away. What happens? There will now be only three bins of parts circulating in the system. So if a machine goes down, the next process will run out of parts 25% faster. It may stress the system and cause some shutdowns, but it will force teams to come up with process improvements.