Thursday, April 05, 2007

Have you heard of Kanban?

I've heard the word before, but I never really thought too deep about its meaning. I think I first came across while I was working at Ford Motors in India and I knew that it was something to do with the Japanese way of manufacturing. I didn't bother to explore beyond that.

Over the last few weeks, however, my interest in everything Japanese has been growing and I'm beginning to admire 'Jap' stuff :) I guess this was fueled by an application I've made for an internship in Japan this summer...

So, in the midst of this Jap craze, when I came across the word 'Kanban' in Seth Godin's post, my curiosity jumped to life! In his blog post, Seth actually talks about how companies tend to launch 'incomplete' products and then blame it on deadlines or resources or other things. He stresses that it may be better to not launch a product at all, as opposed to launching it with flaws because of time and resource constraints. He advices fellow marketers to not accept to market a product that is 'mediocre'. And that's when he mentions Kanban.

Did you know that in a Japanese car factory, if a car part isn't perfect, the worker refuses to install it! And the entire production line just stops! Until a better quality part is retrieved, the production just doesn't continue. Its a matter of trading production quality over efficiency.
No wonder Japanese cars are far more reliable than American ones! This reminds of me something that happened when I was looking for a car in the US last year. Almost everyone told me to stick to Japanese cars unless I wanted my car to break down in the middle of the highway. Now, I know where that comes from!

When I read up here n there to find out more about Kanban, I came across some pretty interesting stuff... This quality control aspect of Kanban is only one part of it. The actual purpose of Kanban is to implement JIT (Just In Time) manufacturing, where the amount of inventory on hand is just enough for the manufacturing to continue without stopping. Excess inventory actually translates into greater costs and therefore the JIT system makes the manufacturing process highly cost effective and efficient. Kanban involves the use of signalling. The workers have signal boards with them which they use to communicate the levels of available inventory. The suppliers replenish the inventory as and when it gets used up. This same concept is used in modern day computerized inventory management systems as well. Its all about information and having a transparent supply chain, where each member has access to all the relevant information from other members right when they need it. In fact, I was involved in building one such ERP system while I was working at Excelics Semiconductor in Sunnyvale.

Hmm... so that's one more thing on my list of admirable things about the Japanese :)


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