Only the amount needed.

Kanban is meant to help deliver items only when they are being sold or used by the next customer, so that there is no excessive pileup of inventory or finished products on the floor or in the warehouse. Using kanban is a way to regulate product flow through the factory. Think of it as a system of pipes that you control so you can increase or reduce how much material heads to a certain place.

Kanbans: backup batteries for production

When you are worried about running out of battery life on your phone, on a cordless drill, or anything else, you keep a backup battery handy. When your drill runs out of power, you grab the backup battery and plug in the dead battery. This way, you keep moving on your project while the extra battery recharges. Having multiple kanbans means you never run out of product at the wrong time. When you reach the bottom of a kanban, you start working on the next one while the empty kanban is refilled.

Practical Pull System: adjustable kanban

A Kanban system keeps a very small amount of inventory on hand, so as soon as a customer places an order, they receive an item from the inventory. Then the factory builds more of that item, builds work in process needed for the item, and reorders any raw materials needed, working all the way backwards through the system to ensure the entire system will be ready to go for the next customer order. The exact amount of product moved depends on the batch sizes and the customer demand. This system can change over time as the business adjusts batch sizes and has changes in sales volume.

Kanban makes your pull system happen

The pull system is the strategy behind how you make products, and kanban is the day-t0-day tactics for executing the strategy. In a pull system, everything starts with a customer order. Using kanban helps to control the flow of production so that product can quickly be moved to fill orders, then the Work-In-Process and inventory levels can be restocked back to the appropriate levels. A working Kanban system works to strike the balance between two extreme versions of a pull system.

Two Extreme Pull Systems

A Pull system describes how product moves in your studio, but not necessary how much to have at each step. Here are a few examples of the extremes: 

Extreme Pull System: Grow-To-Order

In a totally made-to-order setup, you wouldn’t stock any finished product or order any raw materials before receiving a customer order. If you are a brewery, you’d wait until someone came in to order a beer before heading in the back to start brewing. Then you’d start growing the hops and grain for the beer, so your customer sits at the bar for a few months before they can enjoy a drink.

Extreme Pull System: Super-Stocked Warehouse

In this opposite example, your orders are ready to ship in a heartbeat. You’ve pre-packed every possible combination of different products and have them sitting in inventory. When a customer buys a red size medium shirt and a black handbag, you’re ready to go and find the box with that combination of products in it from your warehouse, which is millions of square feet to hold every possible product combination.

What is kanban?

Like many manufacturing terms, the work “kanban” comes from Japanese production systems. The direct translation of kanban is a billboard or a sign. Using kanban means that you will use some type of physical sign to tell the production team what to make. This can be done with by moving a written card, writing on a whiteboard, or physically moving an empty cart or bin in the studio.

Order Fulfillment: Benefits of Using Distributors

Distributors provide services such as warehousing and shipping product to stores. They are convenient for stores, since the buyer can purchase stock from a single catalog rather than individual manufacturers. Many stores prefer this convenience, so using a distributor increases the number of stores that are willing to carry your product. They also provide support such as product information, sales support, and demo/sampling services. Using these services can be a simple way to expand the capabilities of the sales function at your company without adding more people to your company.