The kanban was more than a sign, it represented a merchant's honor.
What does that have to do with production control?
"Buying" not "supply"
The upstream process should not "supply" its "customer." A process must go and get the material it needs -- the same way one goes and buys what one needs from a market. The market does not come to the customer's home.
The word "kanban" means "shop sign" in Japanese, as in a shop sign that might say "Miyazaki's Main Store," which is what you see in the picture of an old Japanese shop at left. How did it come to be applied to the cards used to run Toyota's famous part delivery system as in the bins of forgings shown below? What do shop signs have to do with anything?
Actually, a kanban is more than just a sign, it represents the soul and the honor of a business -- like a family crest in the European tradition. The kanban is said to "cry" if the business is associated with any sort of scandal. Another meaning for kanban was a sort of shirt worn by servants of the samurai to indicate that they acted on the authority of a certain clan or lord. Perhaps this is where the origin of the expression "carrying a kanban on one's back" came from. Reputable merchants of old Japan used a similar system of issuing to their employees a "happi" jacket printed with the store's kanban so it would be clear that they acted on behalf of the business. So if a person claimed to represent a business but did not wear the issued clothing, then another might respond: "Who are you and who sent you? Wear your kanban if you expect to talk business!"
As Mr. Taiichi Ohno drove deeper and deeper in the effort to achieve Just in Time ideals among the companies of the Toyota Group, the concept of "the next process is my customer" gave rise to expressions such as "buying" materials from an upstream process. The machining process "bought" forgings from the foundry that "bought" molten metal from the furnace, that "bought" ingots from a supplier, etc., etc. The struggle was to keep people from "buying" too much too soon from their upstream process. This would result in overproduction -- a cardinal sin against Just in Time. But people tended to want extra material on hand and to want to build their own product ahead -- just in case... Mr. Ohno knew this and he watched out for opportunities to catch them at "buying" when they did not yet have the authorization to do so.
The authorization was supposed to come from the "pull and replenish" rule. When you finished a number of parts that had been defined according to the day's demand, those parts filled up a outlined location on the floor at the end of your line and you had to STOP your line. You were full and needed to find something else to do. ...until someone "bought" those parts. Only then would the space become empty and authorize you to replenish it by building more -- meaning you were finally authorized to "buy" materials from your upstream process. Simple. But discipline was not always what it should have been, and anxious supervisors would sneak away to "buy" parts from the upstream process before they really needed them.
In once incidence remembered by Chihiro Nakao, Mr. Ohno caught someone he knew was about to pull his materials too soon and thundered: "Who are you and where did you come from?! What makes you think you have any right to this material? Show me your kanban!!"
Such incidents as these demonstrated the need to "show one's kanban" when procuring material or parts. They needed some way to prove that they had followed all the rules put in place to achieve Just in Time. Since Mr. Ohno's demand for a "kanban" left a lasting impression, the name for the cards that were issued to limit in-process inventory under the pull and replenish rules became "kanban."
The kanban evolved to include information such as the number of cards issued, and other information that allowed one to tell at a glance whether the kanban's rules were being followed. Like money, true kanbans cycle constantly and never hang on a board to be accounted for in batches. They stay with materials and empty containers for those materials that are cycling back to "buy" more of the same material.
Eventually "cooperating factories" ("suppliers" or "vendors" in American lingo) were urged and educated by Toyota to adopt the kanban as the method to order, deliver, and invoice outsourced parts. Rumor has it that some unscrupulous suppliers even issued counterfeit kanbans so as to be able to claim they had received more orders. Purists argue that there is no such thing as an "electronic" or "computerized" kanban. There are too many opportunities for data in a computer to become "lies" when compared to the true status of delivery. The cards of a true kanban system, however, can never lie, because they are either located with the material itself, or with the material's containers en route to be replenished.
For all the effort that went into establishing kanban systems, Mr. Nakao remembers having carefully organized a kanban only to be scolded by Mr. Ohno for not eliminating the need for a kanban in the first place. "If you had the time to think up a kanban, why didn't you just put the two lines together? What were you thinking!?" The object was 1 piece flow and Just in Time -- kanban was a compromise.
- "Kanban" is thus a term in Japanese that refers to both the system of procurement and the cards issued to define and maintain that system. Everyday Japanese is comfortable with such multiple definitions. One might say that "kanban" in Japanese TPS lingo refers to both a "kanban system" and a "kanban card" in English. In some American plants I have head people refer to bins of material as "the kanban" for such-and-such a part. This is a misunderstanding of the term.
- Because the meaning of kanban differs from the original meaning of the word, in Japanese the Just-in-Time kanban is written in hiragana. Kanji is used for the original word (see KOUJIEN).
- Different systems of romanization of Japanese exist. In one of those systems, kanban is spelled "kamban" because it is thought to replicate the Japanese pronunciation more faithfully. "Kanban" and "Kamban" refer to the same word in Japanese.
- The "Kanban Seido," or "kanban system" was originally the name that most Japanese companies used to refer to Toyota's special approach to manufacturing -- due to Japanese Business' familiarity with kanban cards. The translation of "kanban seido" into English in those days was usually "just in time delivery." In this case, the English term was probably a more accurate term for Toyota's system.