Kanban Essay ⋆ Business Essay Examples ⋆ EssayEmpire

The Kanban system is a version of just-in-time (JIT) inventory management developed by Taiichi Ōno, who initiated his experiments in organizing the flow of production on the shop floor at Toyoda Spinning and Weaving, carrying over his ideas to Toyota Motors. Informing JIT is the supermarket principle. To maximize the economic return, stack wares on shelving; let consumer demand determine what items are stocked. At all costs be flexible—consumers are fickle. Keep inventories to a bare minimum, constantly adjusting your store layout. The pull of actual purchases should be decisive.

As refined by Toyota Motors, the standard model for the Kanban system organizes the flow of production through the pull of final demand for vehicles, the factory working on a short production horizon. To keep inventories at a minimum, produce—or secure from suppliers—components just before they are actually required in assembly. At each component-producing division is a pallet—for instance, outside the room where bolts of various diameters and threading are manufactured—upon which the division places boxes with finished components, upon which empty boxes are placed for it to fill or for another division to fill. Attached to each box is a flag—a kanban—indicating what type of part is already in the box—or the type of part to be produced and placed within it—which division has produced the components, and which division requires the components. Facilitating the process whereby the pull of component demand shapes production in each division, small vehicles snake around the shop floor, picking up empty or filled boxes, dropping them off where the parts they will hold are to be manufactured or where these parts already manufactured are to be utilized. Rather than following a rigid schedule for each division within the factory, stockpiling the completed products in warehouses from which they are obtained if and when required, the Kanban system minimizes inventories and potential wastage—of components no longer needed, for instance—letting the pull dictated by the flow of Kanban around the shop floor dictate daily production.

It should be noted that defects are extremely costly in a JIT system like Kanban. If the bolt division produces bolts with the wrong threading, the door assembly division cannot use them, throwing up bottlenecks to the continuous flow of final vehicle assembly. Thus Kanban goes hand-in-hand with building quality directly into each component of vehicles, aiming at achieving a “zero-defect” ideal, a general goal of the post–World War II Japanese automobile industry aiming to sell in both domestic and international markets.

Kanban is more than an engineering system; it is also a human resources management system. Under the logic of JIT, employees monitor each other’s performance in the sense that a division receiving poorly produced components from another division knows immediately which group of workers was responsible for the errors, the shoddy output, the misguided machine calibration, and setup.

Why did this innovative system emerge in the Japan of the 1950s and 1960s? Economic arguments abound. One possible explanation is the small lot sizes characteristic of the industry in the 1950s and early 1960s. A second thesis points to the prevalence of unwritten implicit contracts—between subcontractors and main parent firms—that may stem from the cultural homogeneity for which Japan is famous. Relatively high costs of land in a country in which most of the land area is mountainous—hence expensive warehousing—may have been a factor. A fourth line of reasoning emphasizes the highly internalized nature of large-firm post–World War II Japanese labor markets: Wages being tightly tied to age and seniority—not to occupations or job assignments—binding workers to firms and firms to workers in long-term relationships; unionization being typically organized within enterprises giving both union and management a common interest in improving productivity and expanding market share. In highly internalized labor markets, in which job assignment is largely independent of wages and productivity gains are important to the union, workers embrace flexibility, mastering new skills, practicing rapid machine recalibration in an effort to speed up each division’s ability to respond to changing demands placed on it by other units on the shop floor.

Sociologists and anthropologists often point to general features of Japanese society that may have shaped the internalization of labor in postwar Japan: Concepts of Confucianism that stress mutual responsibility and mutual interdependence, and a willingness of individuals to subordinate their own needs to that of groups, especially small work groups and teams.

Bibliography:

Cottenceau, L. Hardouin, and I. Ouerghi, “Kanban Policy Improvement Thanks to a (Max,+)-Algebra Analysis,” International Journal of Systems Science (v.39/7,2008);
Michael A. Cusumano, The Japanese Automobile Industry: Technology and Management at Nissan and Toyota (Harvard University Press, 1985);
Qi Hao and Weiming Shen, “Implementing a Hybrid Simulation Model For a Kanban-based Material Handling System,” Robotics and Computer-Integrated Manufacturing (v.24/5, 2008);
JIT Implementation Manual Flow Manufacturing—Multi-Process Operations and Kanban (CRC Pr I LIc, 2008);
Raymond S. Louis, Custom Kanban: Designing the System to Meet the Needs of Your Environment (Productivity Press,2006);
Taiichi Ōno, Toyota Production System: Beyond Large-Scale Production (Productivity Press, 1988);
D. Sivakumar and P. Shahabudeen “Design of Multi-Stage Adaptive Kanban System,” The International Journal of Advanced Manufacturing Technology (v.38/3–4, August 2008).

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