By Thomas R. Cutler

Kanban, in general, is based on trust; namely, that suppliers will reliably deliver quality product in the right quantity at the right time. Kanban is a key element of the lean manufacturing process.

Unfortunately, the entire purpose of the lean manufacturing process appears to be defeated with a paper (or card) kanban system. Suppliers learn to work successfully with fabricators and metalworker’s lean manufacturing kanban system, but also learn the headaches and loopholes. More questions are raised than answered:

• Did a fax get sent?

• Was it received?

• Was it legible?

• Was it acted on?

The lean manufacturing kanban process had produced the antithetical result: a system that encouraged inefficient behavior all around.

• Buyers often send duplicate fax releases.

• Fax releases are sometimes sent on expired purchase orders.

• Suppliers are inundated with illegible or questionable faxes and often ignore them.

• Suppliers frequently report they never receive the fax order.

• Without a reality-based “expected on dock” time and a method to track supplier performance, shipments are often sent too soon or too late.

• Quantity mismatches are frequent. Suppliers ship an inaccurate quantity without being held accountable

• Productivity is detrimentally impacted in staff time spent faxing.

ERP systems treat kanban as an afterthought and do not fully address all the specific challenges of maintaining it. Most manufacturers are using Access with varying degrees of success. The cost-justification of an electronic Web-based kanban can be distilled into three simple factors:

• Material cost reductions;

• Labor cost reductions;

• Transportation cost reductions.

The top limitations of a paper kanban system are:

• Inability to link with the mainframe computer system;

• Inability to perform “what if” scenarios on product lines based on increases or decreases in production;

• Inability to easily adjust kanban quantities based on “spikes.”

Lost cards can be measured in assembly line downtime and expedited freight fees. Duplicate card costs can be measured by extra carrying costs for excess inventory. So, determined to move away from the numerous downfalls of paper kanban, many buyers and planners are encouraging the immediate acquisition of the Web-based kanban. (An example of such a system is called Signum, from Datacraft Solutions, www.datacraftsolutions.com)

There are three ways a Web-based electronic kanban can create a significant culture shift in the manufacturing organization:

• Gives back to management some of the control or oversight that was lost when the company changed from MRP to a shop floor kanban system;

• Communications greatly enhanced with total awareness of material status throughout the manufacturing organization eliminating urgent production meetings;

• Eliminates humiliation of not having material available for production due to lost cards.

The key benefits to a Web-based electronic kanban can be found in real-time visibility:

• Reduce non-value activity: lost or duplicate cards, poor communication;

• User accountability and management oversight capabilities;

• Enhanced communication between manufacturers, vendors, buyers, suppliers and shop floor.

Bottom-line: The kanban process must support the productivity gains articulated in lean manufacturing principles … Web-based electronic kanbans are lean, paper is not.

About the Author

Thomas R. Cutler is the president and CEO of Fort Lauderdale, Florida-based TR Cutler Inc., a manufacturing marketing firm (http://www.trcutler.com/). He is founder of the Manufacturing Media Consortium of more than 1,600 journalists writing about trends in manufacturing. Cutler is the lead spokesperson for the ETO Institute (http://www.etoinstitute.org/) and also the author of the Manufacturer's Public Relations and Media Guide. He can be contacted at [email protected].