A kanban is a card that is attached to a storage and transport container.  It identifies the part number and container capacity, along with other information.  There are two main types of kanban (some other variations are also used):

1. Production Kanban (P-kanban): signals the need to produce more parts

2. Conveyance Kanban (C-kanban): signals the need to deliver more parts to
    the next work center (also called a "move kanban" or a "withdrawal kanban")

A kanban system is a pull system, in which the kanban is used to pull parts to the next production stage when they are needed; a MRP system (or any schedule based system) is a push system, in which a detailed production schedule for each part is used to push parts to the next production stage when scheduled.  The weakness of a push system (MRP) is that customer demand must be forecast and production lead times must be estimated.  Bad guesses (forecasts or estimates) result in excess inventory, and the longer the lead time, the more room for error.  The weakness of a pull system (kanban) is that following the JIT production philosophy is essential, especially concerning the elements of short setup times and small lot sizes.

Dual-card Kanban Rules:

1. no parts made unless P-kanban authorizes production

2. exactly one P-kanban and one C-kanban for each container (the number of containers per part number is a management decision)

3. only standard containers are used, and they are always filled with the prescribed (ideally, small) quantity
 

The number of kanban card sets required in a particular location can be calculated as (see CJA, p. 432):

K = (expected demand during lead time + safety stock)/(size of the container)

If rounding is necessary, K must be rounded up to the next highest integer.
 
 

Productivity Improvement With Kanban:

1. deliberately remove buffer inventory (and/or workers) by removing kanban from the system

2. observe and record problems (accidents, machine breakdowns, defective products or materials, production process out of control)