Kanban is a model of economic production management used by a great number of well known companies all over the world. Its basic principles were developed by the Toyota group in Japan, with the term "KANBAN" being literally translated as a visual card or signal. The core notion of lean production is the design of a value added process as a continuous flow.

Owing to its analogue method of operation, Kanban Lean Production management is often denoted the "supermarket" principle. Extending the supermarket analogy, the Kanban method can be explained as such: An anonymous customer removes the produced product from the supermarket shelf. Following this the supermarket operator then refills the the quantity of product removed. This means; in the context of Kanban production planning, intervention is only necessary with regards to the quantity of product to be kept and the time of ordering. The buying and supplying processes are interrelated through a buffer inventory containing produced parts that are provided by the supplier and removed by the customer. This reduced level of required interaction means only minimal scheduling and management input is needed on a day to day basis.

Kanban replaces the conventional order management with consumption management by forming an interconnected self managing control loop from the two series processes (See Fig.1). The control loop comprises of a consuming process; the customer, and an upstream production process; the supplier. The Kanban card is the ordering document that interconnects the two processes. Once the consuming process receives the order, it removes the appropriate product part from the buffer inventory. The resulting loss in the buffer inventory is then rectified by the production process: the production order is indicated on Kanban cards attached to the product parts. When a product part is removed from the buffer inventory, the pertinent production order card is then delivered to the supplier. The production order cards circulate in a control loop, and this process is called "Card Kanban".

The proper introduction and utilisation of a Kanban system will produce far reaching effects throughout a business. The Kanban system will ensure production is quickly and efficiently adjusted to match product demand at any given time. The system reduces circulating inventory levels, hence minimises capital tie up and negates any resource wastage on stock management. The Kanban systems also limit inventory levels ensuring set stocks can never be exceeded. In short, Kanban utilisation reduces stock levels, maximises output rate from order receipt to dispatch, significantly improves order control, lowers production costs, minimises waste and improves management quality.

Use the principle of Kanban supermarket whenever you are not able to completely avoid inventory management, but wish to significantly simplify your short term production plans and management. Kanban introduction is highly recommended when cycle times are very short or long, when supplier processes are located at great distance or when processes are susceptible to failures.

• One Kanban card is assigned to each product part container
• The Kanban card acts as the production order when the product part is removed
• The customer process fetches the parts
• Parts are removed in the order of their production
• Only the quantity of parts that have been removed will be produced again
• Missing parts must be reproduced as quickly as is possible
• Kanban cards are only made in the department they are needed
• The supplier process is responsible for the quantity of the suppliers product and must eliminate deficiencies immediately