Kanban is a signaling system used in manufacturing environments to regulate production and movement of items in a pull system. As an information-relay device and an inventory-control mechanism, the kanban system works on the principle that each process in the production line pulls just the number and type of components the production process requires in just the right time. As a lean tool to improve the manufacturing process, the kanban system has its problems.
Infrequent orders may render the kanban process ineffective. For instance, if your upward production line made many parts, your requests to make more parts required by the downstream line will require a buffer to ensure that the downstream line does not run out. This is because each production line requires a separate signaling card.
The kanban system assumes stable, repetitive production plans. The kanban concept implies that the warehouse or the supplier should deliver components to the production line as and when they are needed. Fluctuations in demand and products may affect the functioning of the kanban system. Therefore, the system is less suited to industries where product volumes and mixes fluctuate.
The kanban system may produce poor-quality items that need to be reworked or scrapped if production is disrupted with lengthy and unpredictable down times. Kanban is structured like a traffic signal, to manage the flow of traffic to meet customer needs by signaling when to start, stop or slow down production. Any variability or unpredictability will affect the functioning of the system, making it send confused, mixed and wrong signals with regard to the optimal production levels.
Kanban is not suited for manufacturing environments with poor-quality products, short production runs, a multitude of product types and highly variable product demands. The Kanban system requires planned weekly and monthly production schedules coupled with day-to-day flexibility. This may not be possible in a manufacturing environment with multiple product types; variable production demands and long production runs, thus reducing the overall efficiency of the production line.
The kanban system brings quality levels of inventory close to zero. In cases of high uncertainty and disruptions in the transportation network, inventory buffers are needed to guard poor quality from the internal processes and also from the suppliers. This delays your production process.