South-Western - Management  
Color-coded Boards Enable One-Glance Inventory Management
Topic Managing Service and Manufacturing Operations
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Key Words Kanban, inventory management systems
News Story

The most important elements in any lean manufacturing environment are workflow and inventory management. Managers and employees struggle with easy and efficient ways to communicate and track inventory levels and prioritize jobs.

A Kanban system can help to keep inventory management flowing smoothly. The system is based on a highly visible set of boards that hold up to 828 cards in 17 different colors. Red and yellow taped card pockets are used to communicate critical inventory level problems or the need to immediately start production of certain parts.

Manufacturing employees use the system to help them to simplify and visualize load leveling, to prioritize their time, and to keep jobs moving. Even in today’s highly computerized work environment, sometimes simple solutions still work the best.

Questions
1.

What is the kanban system and what is it used for?

2.

What are the advantages of a system like kanban?

3.

What are the potential disadvantages of this system?

4.

Describe the differences between these three different inventory management techniques—economic order quantity (EOQ), just-in-time inventory (JIT), and materials requirement planning (MRP). Under which inventory management system is a manufacturing facility most likely to utilize kanban?

Source “Color-coded Boards Enable One-Glance Inventory Management,” Product News Network, Dec. 12, 2006, pNA.
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