[OPE-L:4817] just-in-time production

Gerald Levy (glevy@pratt.edu)
Fri, 18 Apr 1997 18:47:12 -0700 (PDT)

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Mike W asked in [OPE-L:4814]:

> Hi! What is "kanban", production).?

Hi Mike! The "kanban" (pronounced kahn-bahn) system is the Japanese name
for what is sometimes called "just-in-time" production or "flexible
production." Literally translated it means "visible record" or "visible
plate." The Toyota kanban system employs a card to signal the need to
deliver more parts and another similar or identical card to to signal
the need to produce more parts.

As the name "just-in-time" implies, it is a system for delivering parts to
manufacturing facilities immediately before required for production. It
is thus also a form of inventory control.

The major advantages of the kanban system is that it allows firms to
reduce their inventory stock (and thus inventory costs) and have smaller
manufacturing facilities that require less space, heating, electricity,
and materials-moving labor. Obviously for such a system to work, there
must be a close schedule developed between the supplier firms and the
final manufacturer (although, the suppliers could be vertically-integrated
within one firm). Since the supplier firms are usually very dependent on
sales to major manufacturing companies, the final manufacturing firms are
often able to coerce smaller, supplier firms into locating supplier plants
in the surrounding area of the plant producing the final commodity. This
change in geographic location is not strictly required for "just-in-time"
production, but it does help to ensure compliance with delivery schedules
and also decreases transportation costs. Also, as in Japan, the final
manufacturer may prefer that supplies be produced and delivered by other
firms rather than internally to benefit from the lower labor costs
offered to workers at the supplier firms. [Perhaps to take advantage of
all of this, firms producing final output along with the firms producing
intermediate goods and parts could locate in the same "free trade zone"].

While this system was first used in Japanese manufacturing, other firms
internationally were quick to discover the advantages of the
"just-in-time" production system -- although, it was more difficult in
many cases for them to replicate that system elsewhere for various social
and technical reasons.

Perhaps the concept of a reduction in the turnover time of constant
circulating capital can be of use here for understanding this process?
Tony, btw, is working on a book on flexible production. Tony: any

In solidarity, Jerry

PS: for a description of how the kanban system at Toyota operates, see
Richard J. Schoenberger _Japanese Manufacturing Techniques: Nine Hidden
Lessons in Simplicity_, NY, The Free Press, 1982, pp. 219-238