Just in Time : A 2022 Take on A Timeless KanBan Methodology

KanBan is an inventory control system used in just-in-time (JIT) manufacturing. The system, which Toyota industrial engineer Taiichi Ohno developed, borrows its name from colored cards used to track production and make orders for new shipments and materials. KanBan advocates the use of visual cues to prompt appropriate action required to ensure a process is flowing as intended. The material handling experts at Flexcon provide an overview of the timeless KanBan methodology and how it integrates with JIT.

How the KanBan System Works 

The KanBan system is basically a signal and response system. Whenever a product is getting low at an operational station, a visual cue is dispatched to inform the specific quantity to order from the supplier. The person making the order uses the quantity indicated by KanBan, and the supplier provides the exact amount of items requested. There are several possible applications of KanBan, including when purchasing inventory from external suppliers and even within a factory to manage supply chain processes for the raw materials.

Benefits of the KanBan System

Optimizes inventory: Since items are not delivered before they are needed, there is a reduced need for storage space. It also ensures no wastes from obsolete parts or components.

Reduces waste and scrap: With KanBan, products will only be manufactured when required. This eliminates overproduction while reducing wastage.

Offers flexibility in production: With KanBan, you won’t be stuck with extra inventory if there is an unexpected drop in demand for a product. This gives organizations the flexibility they need to respond quickly to changing demands.

Increased output: The flow of KanBan, including cards, bins, pallets, is designed to stop should there be a problem. This makes issues to be quickly noticeable, allowing them to be corrected immediately. 

Reduces wait time: KanBan also reduces wait time by ensuring supplies are more accessible while eliminating typical administrative barriers. This translates to increased production with the same resources.

What Is the Just in Time Supply Chain?

A JIT supply chain is designed to move material before it is immediately required in the manufacturing process. The technique helps minimize the need to store excessive levels of material in a warehouse. The main goal of the supply chain is to ensure factories don’t have excessive materials on hand and no fewer than they need at that particular time. This helps streamline processes and cut storage costs while providing greater insights into their supply chain processes.

Benefits of Just in Time Supply Chain

The main advantage of JIT is that it enhances production efficiency and competitiveness by preventing overproduction and minimizing waiting times and transport costs. JIT also helps save resources by streamlining production systems and reducing the capital tied up in stock. It can also attract several benefits to your customers, making it an ideal approach to win new business.

How Is Just in Time-Related to KanBan

As mentioned earlier, JIT manufacturing is an inventory plan tailored to reduce flow times within production systems and the response times from suppliers and to customers. Using JIT manufacturing helps businesses and factories better control and visibility into their processes by increasing productivity and lowering costs. On the other hand, KanBan helps companies control the rate of production by making sure materials are received only when needed and when demanded by the customer. 

However, KanBan is not an inventory control system by itself but rather a scheduling system that informs the company on what to produce, when to produce it, and the exact quantity to produce. Notably, KanBan cards play an integral role in implementing JIT by serving as visual aids that trigger the desired action. Its design makes it an ideal element in implementing JIT.

What are the benefits of integrating JIT and KanBan?

Integrating JIT and KanBan helps companies minimize risks by streamlining inventory demand and requirement processes. A hybrid JIT KanBan system helps manufacturers gain higher control over their inventory for enhanced operational efficiency and productivity.

How Is This Methodology More Challenging in 2022?

Although the successes of the JIT system are well documented, the system still faces some unique challenges. These include:

Exposure to supply shocks: On-demand production means organizations have to partner with suppliers willing to fulfill frequent small orders on very short notice. This forces companies to use local suppliers to reduce shipping time and expenses. Because of lack of back stock of inventory or materials, any supply chain problem will lead to delivery delays and dissatisfied customers.

Demand shock: JIT production largely relies on existing orders. This system is not the most efficient one to handle a sudden spike in demand for a product. Lack of backup inventory means customers will be forced to wait for the manufacturers to make the product and suppliers to receive the supplies. This translates to delays, angry customers, and loss of revenue.

Lack of economies of scale: Producing items in small quantities means spending less per shipment of raw materials. However, this may translate to higher costs in the long run. Businesses that have increased production levels often benefit from the economy of scale.

At Flexcon, we acknowledge we may not necessarily control the backlogs and barriers of supplies occasioned by the JIT-KanBan system. However, we can communicate with customers to get out ahead of order times by encouraging them to order early in anticipation of their needs. We also optimize our internal organizational and delivery processes.

Flexcon Provides Collapsible Containers with KanBan Cardholders

Several companies and manufacturing firms have adopted JIT and KanBan concepts to enhance their competitive strength through cost reduction, on-time-in full delivery, and lead time reduction. At Flexcon, we know how this approach is crucial to your business. This is why we provide end-to-end container solutions that help optimize material handling. Our collapsible containers come with KanBan cardholders to help you integrate the system and maximize their benefits. Contact us today to place an order.