Kanban Guide

Step-by-step instructions on how to implement kanban

Pull systems vs. push systems

This refers to the control of production within a value stream. Imagine a three-step value stream: Stamp, Press, and Assembly.


A push system would send a production schedule to Stamping and let the products move according to their routing sheet until they reached shipping. Another form of push would have each of the three process steps receive their own schedule.

diagram of when push system would send production schedule to Stamping and let products move according to routing sheet until they reach shipping

In a pull system, the upstream step will work, not to a schedule, but to “pull” signals coming from its downstream “customer” and respond by producing exactly what the customer needs, in the quantity needed, and at the time it’s needed.

pull systemIn a pull system, signals coming from downstream “customer” and respond by producing exactly what customer needs in right amount at right time.


Why is pull better?

In a Push process, you either end up with uncontrolled inventory in between steps (for example, they might prioritize production orders differently or work at different rates), or you expend a lot of time and effort trying to coordinate each process step’s production plans, which become outdated very quickly after they're released to the shop floor.

diagram showing how In a lean process, Push is eliminated and replaced by Flow wherever possible (e.g. press + assembly), and by Pull where it isn’t.

In a lean process, Push is eliminated and replaced by Flow wherever possible (e.g. press + assembly), and by Pull where it isn’t.


A supermarket (standardized inventory) keeps the WIP at a minimum while enabling immediate production for the downstream process.

A supermarket (standardized inventory) keeps the WIP at a minimum while enabling immediate production for the downstream process.

The parts withdrawn from the supermarket are replenished.

The parts withdrawn from the supermarket are replenished diagram.

In this way, the synchronization of all process steps across the value stream is immediate and automatic. A slowdown at one process will slow down the rate at which kanbans are issued, thus preventing overproduction. Conversely, catch-up at the process after the problem is solved will send out kanban faster and the rest of the value stream will try to speed up.


Kanban is a visual management tool that creates transparency: it is easy to see where and when the flow is disturbed.


Most important, kanban prevents overproduction (the worst of all wastes). That is because the number of cards in circulation determines the maximum allowable inventory.



How to implement a pull system

First, remember that it’s more important to introduce flow. Pull typically comes later. Implementing flow will produce changes in cycle times, quality, resupply times, etc. that impact the calculation of pull signals.


The most common form of pull, by far, is kanban. Kanban is a physical signal in the form of a card that is attached to a container, acting as an authorization to either move or make parts.


Kanban formula

The basic kanban formula is:


n = (demand x resupply time x safety factor) / number of parts per container

Round up the result of this formula.


Where n is the number of cards in a loop linking a “supplier process” and a “customer process,” demand is the average demand for a given product (each kanban card is specific to a product), resupply time is the time it takes from when the card is “released” to when the corresponding parts are available to the customer process. The safety factor multiplier (e.g., 1.15) corresponds to the uncertainty in being able to meet the resupply time. The parts per container is predicated on each kanban card being attached to a container that holds a standard quality of parts, none of which may be defective.


Six rules of kanban

  1. Customer process goes to the supermarket and gets what is needed
  2. Supplier process produces the quantity indicated on the kanban card
  3. Every container must have a kanban card attached
  4. Produce or move only if you have the appropriate kanban card
  5. No transfer of defective parts
  6. The number of kanban cards must be reduced as waste is removed, and can only be changed by the kanban coordinator


For reference, Toyota also has a couple of rules linked to the kanban formula: the number of parts in a container shouldn’t exceed 10% of the daily demand, and the safety factor shouldn’t exceed 1.1. (Remember, this is Toyota - your numbers are probably going to be different.)


There are 4 major types of kanbans, but the most important thing to remember is that in practice, the system can be implemented in any way that respects the basic principles. 

  1. Two-bin kanban (for small, cheap parts—easy to implement)
  2. Two-card kanban (most common way to connect two production process steps)
  3. Single card kanban (a simpler method, but it’s vital people be very disciplined)  
  4. Signal or Triangle kanban (used to pull from large-batch processes)


Procedures for kanban

  1. On a Value Stream Map, draw a “pull loop” to connect two process steps that can’t be integrated in a flow (common reasons shown in red).
    value stream map, where pull loops are drawn two connect two steps that can't be integrated in a flow
  2. Pick a loop and create a PFEP (“plan for every part”) database. This will provide the data needed to calculate and configure the pull system. The basic dataset contains the following information, but many PFEP databases contain calculated data as well.
    Part # Description Daily Demand Supplier Supplier Location  Supplier Country
    Point of Use Container Type Container Weight Container Length Container Height Container Width
    Parts/assembly Shipment Qty. Shipment Freq. Transit Time # of Kanbans Parts per Ctr.


  3. Determine the type of kanban to be used for the selected loop
  4. Use the PFEP database to calculate the number of kanbans needed
  5. Do a “dry-run” to simulate exactly how the system would work under various conditions
  6. Create the physical elements of the system:
    1. Kanban cards
    2. Containers
    3. Quality inspection to ensure only good parts are placed in containers
    4. Collection boxes for kanban cards that have been detached from their containers
    5. Standard path for material handlers (who also move cards)
    6. Red mailbox (a visual management tool to escalate abnormalities)
  7. Train the workforce (including production scheduling, engineering, shipping, etc.)
  8. Trial run (mainly to ensure all kanban rules are understood and followed)
  9. Ongoing management: monitor compliance to kanban rules, adjust parameters as needed, apply continuous improvement to reduce the number of cards (and hence, maximum inventory). Kaizen should follow abnormalities that put cards into the red mailbox.


What’s next?

The most common mistake beginners make is failing to thoroughly “dry-run the system”: it is the small overlooked detail that will hurt you, and since you’re dealing with production, the pain will be great!


Kanban is a kaizen tool: you should “stress” the system by removing one card from a kanban loop to know where the weak points appear and focus your kaizen efforts there. 


Each time you reduce waste, lead time or variation, this should lead to reduction of kanban cards, of parts per container, or at least a reduction of the safety factor.



Need help implementing Kanban? Contact the Lean Center of Excellence. 

Fill out this quick form and we'll get back to you within a couple of days with more information on how you can implement Kanban on the shop floor.