What is Kanban? - Definition & Types of Systems

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  • 0:04 Kanban
  • 1:11 Benefits & Goals
  • 1:40 System Types
  • 3:22 Lesson Summary
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Lesson Transcript
Instructor: Lisa Christoffel
Discover how this Japanese efficiency tool is used to save time and money and reduce re-work. A short quiz at the end of the lesson will help you solidify your learning.


Kanban means billboard in Japanese. It is a visual tool that lets the work team literally see the work in process and react based on visual cues. Kan means 'card' and ban means 'signal'. In a typical Kanban system, there are cards, bins, pallets and other visual cues that let the work team know the current status of their workflow and the amount of material in the system.

Kanban is historically a pull production control system, though it is used for a wider set of circumstances now. A pull production control system is one that is managed from the floor. As materials are needed on the factory floor, they are pulled in. The opposite type of system would be a push one, where a quota of materials is pushed through the system based on customer orders, whether the floor is ready for them yet or not.

When you shop at a grocery store, you can see the inventory on the shelves, right out in the store. It is obvious when the grocer needs to re-stock because he can see the status of his inventory. Toyota management studied grocery stores in the 1940s to come up with the Kanban system that is currently used in factories.

Benefits and Goals

Kanban is used in lean manufacturing because the goal is to eliminate waste, making the factory floor lean on excess inventory and other unused materials.

Some key benefits of a Kanban system are reduced storage requirements; flexible production; minimal waste; minimized costs tied up in WIP, or Work in Progress and Inventory; reduced obsolete materials when material changes are made; and reduced overproduction.

System Types

One simple type of Kanban system is called a three-bin system. In this system, the manufacturer and the supplier are cooperating, sharing the material management risks. The supplier will keep one full bin. The manufacturer will have two bins: one in inventory and one on the floor. When the bin on the floor is emptied, the one in inventory gets pulled onto the floor. Then, the manufacturer has the supplier deliver their bin to inventory, and the supplier knows to make another bin of material ready to go to the manufacturer.

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