Kanban Systems and Visual Controls

Kanban Systems and Visual Controls: A Comprehensive CPIM Exam Guide

Introduction to Kanban Systems and Visual Controls

Kanban systems are one of the most critical topics within the CPIM Detailed Scheduling and Planning module. Understanding Kanban is essential not only for passing the exam but also for applying lean manufacturing and pull-based production principles in real-world supply chain environments. This guide provides a thorough explanation of Kanban systems and visual controls, their importance, how they work, and how to confidently answer exam questions on this topic.

Why Are Kanban Systems Important?

Kanban systems are important for several key reasons:

1. Waste Reduction: Kanban is a cornerstone of lean manufacturing. By producing only what is needed, when it is needed, and in the quantity needed, Kanban minimizes overproduction — considered the worst form of waste in lean thinking.

2. Inventory Control: Kanban directly limits work-in-process (WIP) inventory by controlling the number of cards (signals) in the system. This prevents excessive inventory buildup and reduces carrying costs.

3. Improved Flow: By linking downstream consumption to upstream production, Kanban creates a smooth, continuous flow of materials through the production process.

4. Simplicity and Visibility: Kanban provides a simple, visual mechanism for managing production and material replenishment without the need for complex scheduling software at the shop floor level.

5. Responsiveness: Pull-based systems respond to actual demand rather than forecasts, making them more adaptable to changes in customer requirements.

6. Empowerment of Workers: Visual controls associated with Kanban empower shop floor workers to make real-time decisions about production flow without waiting for centralized instructions.

What Is a Kanban System?

The word Kanban is Japanese for "signal" or "card." A Kanban system is a pull-based production control mechanism that uses signals (typically cards, containers, or electronic signals) to authorize the production or movement of materials.

Key Characteristics of Kanban:
- It is a pull system: Production is initiated only when a downstream process signals a need.
- It limits work-in-process (WIP) inventory to a predefined level.
- It operates on the principle of replenishment: items are produced or moved only to replace what has been consumed.
- It is inherently visual, making the status of production immediately apparent to everyone on the shop floor.

Kanban vs. Push Systems:
In a traditional push system (such as MRP-driven scheduling), production orders are released based on a master schedule and forecasted demand. Materials are "pushed" through the production process regardless of actual downstream consumption.

In a pull system (Kanban), nothing is produced until the downstream operation signals that it needs more. This fundamental difference is critical for exam purposes.

How Does a Kanban System Work?

The Basic Mechanism:

1. A downstream workstation (or customer) consumes a part or container of parts.
2. When the container is emptied (or a predefined trigger point is reached), a Kanban card is detached and sent upstream.
3. The upstream workstation receives the Kanban card, which serves as authorization to produce or deliver the specified quantity of parts.
4. The upstream workstation produces the parts, attaches the Kanban card to the new container, and sends it downstream.
5. The cycle repeats continuously.

Types of Kanban:

1. Production Kanban (P-Kanban or Make Kanban): Authorizes a workstation to produce a specific quantity of a specific part. It is used between a production process and its output buffer (supermarket).

2. Withdrawal Kanban (W-Kanban or Move Kanban / Conveyance Kanban): Authorizes the movement of parts from an upstream supermarket (storage area) to a downstream workstation. It does not authorize production — only transportation.

3. Supplier Kanban (Vendor Kanban): A signal sent to an external supplier to deliver a specified quantity of materials. This extends the pull system beyond the factory walls.

4. Signal Kanban (Triangle Kanban): Used in batch production environments where it is impractical to use one card per container. A single signal (often a triangular card) triggers production of a batch when inventory reaches a reorder point.

5. Express Kanban: Used in emergency situations when there is an unexpected shortage. It is issued temporarily and collected once the shortage is resolved.

The Kanban Formula:

One of the most important things to know for the CPIM exam is the formula for calculating the number of Kanban cards (and therefore containers) required in a system:

Number of Kanbans (N) = [D × L × (1 + S)] / C

Where:
- D = Average demand per unit of time (e.g., per day)
- L = Lead time for replenishment (in the same time units as D)
- S = Safety factor (expressed as a decimal, e.g., 0.10 for 10%)
- C = Container size (number of units per container)

Example Calculation:
- Daily demand (D) = 200 units
- Lead time (L) = 0.5 days
- Safety factor (S) = 0.20 (20%)
- Container size (C) = 25 units

N = [200 × 0.5 × (1 + 0.20)] / 25
N = [200 × 0.5 × 1.20] / 25
N = 120 / 25
N = 4.8 → Round up to 5 Kanbans

Important: Always round up when calculating Kanban quantities, since you cannot have a fraction of a Kanban card or container.

Rules of Kanban:

Understanding the rules of Kanban is essential for exam questions:

1. No production or movement without a Kanban: Work must not be performed unless authorized by a Kanban signal.
2. Each Kanban represents a standard container quantity: The number of parts per container is fixed and standardized.
3. Defective parts are never passed to the next process: Quality at the source is enforced.
4. The number of Kanbans should be reduced over time: This drives continuous improvement by exposing problems and reducing inventory.
5. The downstream process withdraws only what is needed: No excess pulling is allowed.
6. The upstream process produces only the exact quantity withdrawn: Overproduction is prohibited.

Visual Controls in Kanban and Lean Manufacturing

Visual controls are closely related to Kanban and are a broader lean manufacturing concept. They make the status of a process, equipment, or work area immediately visible to anyone, enabling rapid identification of normal vs. abnormal conditions.

Types of Visual Controls:

1. Kanban Cards and Boards: The most direct visual control — cards on a board show what needs to be produced, what is in progress, and what is complete.

2. Andon Systems: Light signals (typically red, yellow, green) at workstations that indicate the status of a process. Workers can trigger an Andon to signal a problem and request help.

3. Shadow Boards: Tool storage boards where the outline of each tool is drawn, making it immediately obvious if a tool is missing.

4. Floor Markings: Tape or paint on the floor designating areas for inventory, WIP, finished goods, walkways, and equipment. Defined Kanban squares on the floor can serve as visual signals — when the square is empty, production is triggered.

5. Production Status Boards: Whiteboards or electronic displays showing planned vs. actual production, downtime, quality metrics, and other key performance indicators.

6. Color-Coded Inventory Zones: Red, yellow, and green zones in storage areas that visually indicate inventory levels and trigger replenishment actions.

7. Heijunka Boards (Production Leveling Boards): Visual boards used to level production by distributing Kanban cards evenly across time slots throughout the day, preventing overburden and unevenness.

Benefits of Visual Controls:
- Enable immediate identification of problems
- Reduce reliance on complex information systems at the shop floor level
- Support standardized work
- Empower workers to self-manage
- Promote transparency and accountability
- Complement Kanban by making the pull system visible and manageable

Integration of Kanban with MRP and ERP Systems

A common exam topic is understanding how Kanban interacts with traditional MRP/ERP planning systems. The two approaches are not mutually exclusive:

- MRP can be used for longer-range planning (material procurement, capacity planning, master scheduling) while Kanban controls execution on the shop floor.
- This hybrid approach is sometimes called "MRP for planning, Kanban for execution."
- MRP determines what to produce and when to have materials available; Kanban determines the rate and timing of actual production at the workstation level.
- The number of Kanban cards may be periodically adjusted based on MRP-driven demand forecasts.

Prerequisites for Successful Kanban Implementation:

- Stable and relatively level demand: Kanban works best when demand is predictable. Highly variable demand requires larger safety factors or alternative approaches.
- Short setup times: Quick changeovers (SMED) enable small lot sizes, which are essential for responsive Kanban systems.
- Reliable equipment: Total Productive Maintenance (TPM) ensures machines are available when needed.
- Consistent quality: Defects disrupt the pull system. Quality at the source is mandatory.
- Standardized containers: Fixed container sizes simplify the system and ensure consistent quantities.
- Trained and disciplined workforce: Workers must understand and follow Kanban rules rigorously.
- Supplier reliability: For supplier Kanban, vendors must deliver on time and in full.

Continuous Improvement Through Kanban

One of the most powerful aspects of Kanban is its role as a continuous improvement tool. By systematically reducing the number of Kanban cards in the system, management intentionally lowers WIP inventory. This exposes hidden problems — machine breakdowns, quality issues, long setup times, unreliable suppliers — that were previously masked by excess inventory. The organization is then forced to solve these problems, leading to a more robust and efficient production system.

This concept is often described using the "river and rocks" analogy: Inventory is like water in a river, and problems are like rocks on the riverbed. When the water level (inventory) is high, the rocks are hidden. As you lower the water level (reduce Kanban cards), the rocks become visible and must be removed.

Common Kanban Variations and Advanced Concepts:

- Single-Card Kanban System: Uses only production Kanbans (or only withdrawal Kanbans). Simpler but less flexible than a two-card system.
- Two-Card Kanban System: Uses both production and withdrawal Kanbans. Provides tighter control but is more complex to manage. This is the classic Toyota system.
- Electronic Kanban (E-Kanban): Uses electronic signals (barcodes, RFID, ERP system triggers) instead of physical cards. Enables Kanban across geographically dispersed facilities and supply chains.
- CONWIP (Constant Work-In-Process): A variation where a fixed number of cards control total WIP for an entire production line, rather than between individual workstations. CONWIP is simpler to manage and is effective for job-shop environments.


Exam Tips: Answering Questions on Kanban Systems and Visual Controls

The following tips will help you maximize your score on CPIM exam questions related to Kanban systems and visual controls:

1. Master the Kanban Formula:
Be absolutely comfortable with the formula N = [D × L × (1 + S)] / C. Practice multiple calculations with different values. Remember to always round UP to the nearest whole number. The exam frequently includes numerical questions on this formula, and getting them right is easy points if you've practiced.

2. Understand Pull vs. Push:
Many exam questions test your understanding of the fundamental difference between pull and push systems. Remember: In a pull system, production is triggered by actual downstream consumption. In a push system, production is triggered by a schedule based on forecasted demand. If a question asks about the defining characteristic of Kanban, it is always the pull concept.

3. Know the Types of Kanban:
Be able to distinguish between production Kanban, withdrawal Kanban, supplier Kanban, and signal Kanban. A common exam question will describe a scenario and ask you to identify which type of Kanban is being used. Production Kanban authorizes making; withdrawal Kanban authorizes moving.

4. Remember the Rules:
The six rules of Kanban are frequently tested. Pay special attention to the rule that no production or movement occurs without a Kanban signal, and the rule that the number of Kanbans should be reduced over time to drive improvement.

5. Connect Kanban to Continuous Improvement:
If a question asks about the primary purpose of reducing the number of Kanban cards, the answer is to expose problems and drive continuous improvement — not simply to reduce inventory as an end in itself. Inventory reduction is a means, not the goal.

6. Know the Prerequisites:
Questions may ask what conditions must be in place for Kanban to be effective. Think: stable demand, short setup times, reliable equipment, good quality, and trained workers. If a scenario describes a chaotic environment with long setup times and poor quality, Kanban will struggle — and the exam expects you to recognize this.

7. Understand the MRP-Kanban Relationship:
Do not treat MRP and Kanban as mutually exclusive. The exam frequently tests the concept that MRP handles planning while Kanban handles execution. If asked how a company can use both, explain this complementary relationship.

8. Visual Controls Beyond Kanban:
Be prepared for questions about Andon systems, Heijunka boards, and other visual management tools. Know that Andon = status signaling for problems, and Heijunka = production leveling. These concepts often appear alongside Kanban questions.

9. Watch for Distractors:
Common wrong answers in Kanban questions include: Kanban eliminates the need for planning (false — planning is still needed); Kanban works in all environments regardless of conditions (false — prerequisites must be met); increasing the number of Kanbans improves efficiency (false — reducing Kanbans improves efficiency through continuous improvement).

10. Scenario-Based Questions:
The CPIM exam increasingly uses scenario-based questions. When you see a scenario, identify: Is this a pull or push situation? What type of Kanban is described? What problem is the system trying to solve? What prerequisite might be missing? Systematically analyzing the scenario will lead you to the correct answer.

11. Safety Factor Interpretation:
In the Kanban formula, the safety factor (S) accounts for variability and uncertainty. If a question asks how to respond to increased demand variability, the answer involves increasing the safety factor (or the number of Kanbans temporarily). However, the long-term lean approach is to reduce variability at its source, thereby enabling a reduction in the safety factor over time.

12. Container Size Implications:
Understand that smaller container sizes lead to more Kanbans but less inventory per Kanban, enabling smoother flow and faster response. Larger containers mean fewer Kanbans but more inventory in the system and potentially lumpier demand signals to upstream processes.

Summary

Kanban systems and visual controls are foundational concepts in the CPIM Detailed Scheduling and Planning body of knowledge. They represent the practical application of lean and just-in-time principles on the shop floor. To succeed on the exam, master the Kanban formula, understand the types and rules of Kanban, know the prerequisites for successful implementation, and be able to articulate how Kanban integrates with MRP-based planning systems. Remember that Kanban is ultimately a tool for continuous improvement — reducing inventory to expose and solve problems, driving the organization toward operational excellence.