Definition
Kanban is a visual inventory replenishment system originating in Toyota's manufacturing plants. In its simplest form, a kanban card signals the need to replenish a consumed item. When a bin is emptied or reaches a trigger quantity, the kanban card is sent upstream to trigger resupply. Two-bin kanban systems are common in distribution: the active bin is picked from; when it empties, the second bin becomes active and the empty bin is sent for replenishment. Electronic kanban (e-kanban) automates the signal via barcode scan or system trigger. Kanban eliminates the need for periodic reorder point reviews by creating a continuous pull signal.
Why It Matters
Kanban simplifies replenishment for C-items and MRO inventory that does not justify complex forecasting. By making the reorder signal visual and physical, it reduces stockouts from missed reorder points and eliminates overstock from batch ordering. Many distributors implement kanban for janitorial, packaging, and maintenance supplies where manual tracking is error-prone. Inventory Optimization Tool →
Frequently Asked Questions
What is a kanban system in supply chain?
Kanban is a pull-based replenishment system where inventory consumption signals upstream restocking. The classic form uses physical cards that travel with empty containers to trigger refill. Modern implementations use electronic signals (barcode scans, WMS alerts) to generate purchase orders or production work orders automatically.
How do you calculate kanban quantity?
Kanban quantity = (demand rate × replenishment lead time + safety stock) / container size. Example: if daily demand is 50 units, lead time is 3 days, and safety stock is 30 units, kanban quantity = (50 × 3 + 30) = 180 units per kanban card.
What is the difference between kanban and JIT?
JIT is a philosophy — produce only what is needed, when needed. Kanban is a practical mechanism for implementing JIT by creating visual pull signals. Kanban is a tool; JIT is the goal. Most JIT implementations use kanban as their primary replenishment signaling system.