We’re always exploring new ways to improve the production process at Arctos, whether by finding more efficient equipment or exploring new scheduling and processing systems. In our search, Arctos has adopted the kanban method first pioneered by Toyota in the 1940s. To learn more about this method, we sat down with Arctos President and Partner Matt Ache.

What is a Kanban Method?

The kanban method in manufacturing is a visual based inventory and scheduling system used in lean or “just-in-time” (JIT) manufacturing. “Kanban” comes from the Japanese kanji 看板, meaning “signpost” or “billboard.” Kanban can also refer to a specific process-management in software development and is likely derived from the same origin as the manufacturing process.

The manufacturing process was introduced by Toyota engineer Taiichi Ohno as a visual based way to keep track and limit inventory to only required materials for upcoming orders. This inventory was kept onsite with a cyclical ordering, manufacturing, and shipping flow of work ensuring there was never a lack of material at any stage. 

This is accomplished by setting hard limits on the amount of material stored for each step of the manufacturing process. A visual representation that can be seen from any point in the production cycle conveys the status and next steps for the inventory levels at each stage.

This visual representation is where the method got its name. For the originating Toyota process, each step of their automotive manufacturing process had a card containing the necessary information that acted as the “signpost.” A red card lying in an empty parts bin signaled the need for more parts, which were then ordered to keep the process moving. From these origins, the manufacturing process has been adapted and evolved to cover a wide range of visually based inventory and scheduling systems in manufacturing. While physical cards are still common, an electronic version of a kanban card can also take the form of an email notification triggered by inventory levels. 

How is the Kanban Method Useful in Manufacturing?

The goal of any kanban manufacturing method is to cut down on excess inventory storage by only storing what inventory is necessary for fulfilling current orders. As more orders arrive or demand increases, the method would schedule the delivery of more inventory as orders come in. Such a goal can be described as “just-in-time” (JIT) manufacturing, as inventory is delivered as it is needed. JIT manufacturing is a way to cut down on overhead costs without sacrificing efficiency or quality. 

The visual component of the kanban method is used to highlight and identify inefficient steps in the manufacturing process. A build-up of inventory at any point of the process can easily be identified due to the card-system or visual component. 

In a traditional kanban method, the visual components are cards that signal the current status of each production stage and alert management to a depletion of product, parts, or inventory. When one of these cards is received, it triggers a reorder of the depleted inventory, either by moving material from storage or from an outside vendor.

This creates a flow of work: orders use up inventory, the kanban signals the demand for more inventory, more inventory is ordered then to be used to fulfill incoming orders. The result is cutting down on overhead storage costs while keeping costs down for both the manufacturing and the customer.

How Arctos Uses the Kanban Method

Arctos does not have a set or canned supply chain method for any of our customers or partners. We work with your production needs, inventory requirements, and manufacturing processes to engineer a solution that best works for both of us to ensure quality and add value. 

Arctos Assembly is an ever-evolving process of defining what success looks like for our customers. The kanban method is just one method we have utilized with customers in the past to help cut down inventory storage overhead and provide a more efficient assembly method.

Arctos has 20 years of experience developing various kanban and other inventory management manufacturing methods for each of our partners. Our sister company, iRex, also utilizes a kanban method for their copper cable assemblies. We’re always looking to keep improving and engineering better solutions for our partners. In all honesty, with the material shortages that the industry faces today, the just-in-time manufacturing strategy and the kanban method might not be the best-suited method, given the current manufacturing landscape.

As material shortages are worked out and the manufacturing landscape changes, the kanban method could become viable again, and this is the strength of partnering with Arctos. We have the flexibility and expertise to continually assess what success looks like and can adapt new manufacturing processes without holding up production. You can rest easy that whatever strategy is deployed, Arctos is an active participant in problem solving solutions to ensure your production line is as efficient as possible. 

If you’re ready to see how Arctos can better manage your production process, possibly with a kanban method, reach out today.