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Six Rules of Kanban

Instructor: Olga Bugajenko

Olga is a registered PRINCE2 Practitioner and has a master's degree in project management.

What does a supermarket have in common with a manufacturing plant? Learn about Kanban, a lean tool designed to improve efficiency and reduce costs of production.

What is Kanban?

In the increasingly competitive environment of the modern business world, companies constantly have to battle for survival - often by decreasing costs and increasing productivity. Lean is a term to describe methodologies for eliminating unnecessary actions and increasing efficiency in business processes. These techniques originated in manufacturing, but are now applied across different industries, from healthcare to software development.

Kanban is a Lean tool for reducing idle time and associated costs in production. Kanban controls available inventory and balances produced amounts. A Japanese company, Toyota Production System, introduced Kanban back in the 1950's. In Japanese, 'kan' means 'visual' and 'ban' means 'card'. Kanban uses visual cards as signals for production: a card is attached to every product produced. Once the product is consumed, for example, purchased by a customer or used in the assembly line, the card is removed and sent back to the production center, signaling that a new product has to be produced.

The idea of Kanban originates from a supermarket, where a limited number of products are stored on the shelves. A new item is placed on a shelf only when older products are purchased, and free space becomes available.

Such systems, where one stage of a process is dependent on the previous stage, is known as a pull system. Production that is triggered by a customer order is known as just-in-time manufacturing. This approach allows minimizing the stock of materials, work-in-progress, and completed products. In modern companies, physical cards are often replaced by electronic notifications or e-mail.

Six Rules Of Kanban

Successful implementation of Kanban is governed by six main rules, defined by Toyota:

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