What is Kanban?

Kanban is a Japanese word for “signboard,” and it has become synonymous with demand
scheduling. Originally, the system was used to cut costs and manage the utilization of machines.

Today Toyota uses kanban to identify bottlenecks and to achieve continuous improvement. Kanbans, developed by Taiichi Onho in the late 1940s and early 1950s, are a key implementation tool for “just in time” (JIT) manufacturing systems.

With kanban, products only are produced either to replace goods being consumed by customers or to respond to signals your customers are sending. Key attributes of kanban scheduling include
reduced inventory, less overproduction, and greater responsiveness to changes in demand.

Kanban can be thought of as demand scheduling — meaning that the manufacturing plant
only produces goods based on their actual usage, rather than based on a forecast of what
will be consumed in the marketplace. You can use resources more efficiently if you replace
your traditional weekly or daily production meeting with kanban.