Blog Manufacturing Kanban in manufacturing: 9 major benefits [+examples]
11 October, 2023

Kanban in manufacturing: 9 major benefits [+examples]

Kanban in manufacturing is an inventory control process used in just in time inventory management. In Kanban, manufacturing teams use visual cues, called Kanban cards, to signal specific actions that keep processes running efficiently.

Think of Kanban in manufacturing like loading a dishwasher. When done correctly, everything fits perfectly and gets cleaned efficiently. And just as you wouldn’t overload a dishwasher or mix up different types of dishes, Kanban prioritizes specific manufacturing tasks so that you can complete them efficiently and effectively.

Originating as a manufacturing process, Kanban now broadly ensures that teams can work together seamlessly towards a common goal. Whether optimizing warehouse management systems or creating centralized supply chain management, Kanban can be instrumental in removing inefficiencies from workflows.

But what exactly is Kanban, and how can you integrate it? In this post, we’ll explore what Kanban is, the benefits of implementing it into your workflows, and a few real-world examples of companies that have leveraged Kanban’s capabilities to create seamless processes — just like a perfectly loaded dishwasher.

What is Kanban?

Kanban describes a method of inventory control companies use to make smarter reordering decisions and track production more easily. The term “Kanban” came into existence almost 50 years ago when Taiichi Ohno, an engineer at Toyota Automotive, developed the first Kanban system to improve manufacturing efficiency.

The four core principles of Kanban are:

  • Visualize work
  • Limit work-in-progress
  • Focus on flow
  • Improve continuously

The idea of Kanban was taken from an unlikely inspiration: a supermarket. Toyota noticed that supermarkets restocked an item according to the store’s supply and not the vendor’s. Supermarkets replenished items only when they were nearly out of stock.

The grocers’ ‘just in time’ inventory method and delivery process sparked an interest in Toyota to adopt a similar approach where inventory matched demand.

How does Kanban work in manufacturing?

Kanban systems in manufacturing communicate the need to replenish stocks or produce an item. When it comes to producing items, Kanban breaks down the process into defined steps to ensure production is done efficiently and without error. The process is defined by the steps below:


  • Outlining: Determining the necessary steps in the manufacturing process
  • Developing a pull system: Creating a system where products only get produced when there is customer demand
  • Limit work in progress (WIP) goods: Restricting the number of units that you can produce at a given time to limit manufacturing waste 
  • Monitor performance: Track the success of the production system
  • Continuously improve: Use your success metrics to continuously enhance the production process
A visualization of how the Kanban process works for manufacturing companies.

Types of Kanban systems

Kanban typically breaks down into six main types: production, withdrawal, supplier, emergency, through, and express. Different types of Kanbans serve a specific purpose and help solve various problems in inventory management, like ensuring tasks are completed efficiently and materials aren’t going to waste.

Production Kanban

Production Kanban is the simplest and most widely used method of Kanban — and it applies to almost every industry. This method creates production cards, which illustrate the raw materials and processes necessary to create a product.

Withdrawal Kanban

Withdrawal Kanban ensures that time and labor are used as efficiently as possible. In this method, floor staff use withdrawal cards to signify that a process or task is finished and they are ready for the next one. The card additionally signals that their component is complete and ready to move to the next production stage.

Supplier Kanban

For industries that rely heavily on supplier collaboration, supplier cards allow suppliers greater visibility into the production process and to be part of the larger Kanban system. This streamlines the process by reducing the time it typically takes to make a supplier request.

Emergency Kanban

While Kanban strives to prepare for the unexpected, emergencies are inevitable in an organization. Emergency Kanban cards are reserved for situations where a defective part needs to be quickly replaced to restore the system to its natural flow.

Through Kanban

You will use Through Kanban cards, a combination of production and withdrawal cards, when two different production teams work in tandem in the same setting. Instead of using both a production and withdrawal card to signal a task is complete and another is ready to begin, a through card accomplishes both.

Express Kanban

Express Kanban serves the sole purpose of alerting team members when manufacturers are short of specific items or materials. Using express Kanban ensures manufacturers never experience slowdowns due to raw material—or other item—shortages.

9 major benefits of Kanban in manufacturing

Implementing Kanban into your inventory management techniques can benefit your internal processes and your relationship with customers and suppliers in major ways. Here are nine major upsides to adopting Kanban.

A list of the major benefits of using Kanban for manufacturing alongside a woman working on a production line.

1. Improved quality and accuracy

By outlining processes before they begin, companies can foresee and predict potential roadblocks during production. By identifying these ahead of time, manufacturers can adequately navigate around them to reduce delays and improve overall quality.

2. Enhanced efficiency

A core principle of Kanban is reducing manufacturing waste, which can mean eliminating processes or steps that have no value to the customer. By taking away unnecessary steps, manufacturers can work more efficiently and produce products quickly.

3. Lower lead times

When you cut out the wasteful steps in a process, you can guarantee lower lead times. Kanban allows businesses to get products to customers faster and can therefore lower costs. By examining each step of the production process under a microscope, companies can reduce carrying costs, package quicker, and move products more efficiently.

4. Stronger customer service

Kanban relies on continuous feedback and improvement, which emphasizes customer service and customer feedback. Additionally, Kanban allows you to be on top of processes — meaning you’re always engaging with customers and meeting their needs quickly.

5. Greater visibility

Visibility and transparency are at the heart of the Kanban process, and the system seeks to allow stakeholders to visualize the flow of products and information easily. By adopting a process all team members can easily see how to prioritize tasks — making for more efficient workflows.

6. Optimized inventory levels

Since inventory is not replenished until needed, Kanban reduces the need for additional storage space and prevents cash flow from being tied up in excessive inventory. Kanban enables maintaining accurate inventory levels in real time.

7. Limited overproduction

Kanban is a demand-pull system, meaning it pulls work from the previous stage according to the designated need for production. Kanban adheres to just in time inventory principles, eliminating the need to keep too much safety stock to deal with unexpected delays during the production line.

8. Flexible production

A Kanban inventory control system focuses on current demands to set production capacity appropriately. If there is a sudden surge in demand for a product, Kanban ensures the minimum possibility of excess inventory, giving the production process flexibility in responding to changing demands.

Kanban also provides adaptability to the production line as you can easily switch it to different products depending on the demand.

9. Reduced obsolete inventory

Even if a product or component design needs upgrades, it is incorporated into the final product as soon as possible. No component goes wasted or becomes obsolete inventory.

Additionally, since you’re operating under the just in time inventory technique, you’re less likely to be stuck with excess inventory if demand shifts unexpectedly.

3 challenges to implementing Kanban

In manufacturing, Kanban can be extremely effective in enhancing efficiency and improving processes, but fully adopting it into your inventory management process can be easier said than done. Here’s why:

1. Imbalance with inventory management

Achieving inventory flow involves your processes being balanced, meaning that if you adopt Kanban, it needs to work alongside your inventory management technique. Since Kanban prioritizes limiting waste, it works well with just in time inventory management.

Depending on your inventory management technique, which likely depends on your industry, you’ll need to carefully evaluate if Kanban is feasible for your current inventory processes.

Request a demo of Cin7 to see how Connected Inventory Performance can improve and automate your inventory processes. 

2. Resistance to change

Kanban can be extremely rewarding and significantly benefit an organization, but it can be difficult to encourage team members to adopt Kanban.

When you adopt Kanban, you may be up-ending an established process, so don’t be surprised if you experience resistance from team members.

3. Fluctuating demand

Kanban works well to ensure it accounts for fluctuations in demand, but it can be difficult to implement if demand is regularly shifting. While the system can successfully combat unexpected periods of demand, you may experience challenges implementing it during periods of demand fluctuation.

It can also be difficult to maintain low WIP limits when demand is regularly shifting.

Kanban vs. Scrum

While Kanban and Scrum both work to enhance efficiency and create better products, they have slightly different purposes in workflows.

  • Kanban strives to help manufacturers better visualize processes and improve flow.
  • Scrum provides an iterative method for accomplishing processes more efficiently.

Scrum is an agile method that breaks up work into sprints, or dedicated periods for accomplishing tasks. Kanban and Scrum work well in tandem since they want to achieve the same goal but do so differently. The table below breaks down the major differences between Kanban and Scrum.

A chart detailing the major differences between

Kanban Examples in the real world

Kanban is popular today because it’s a proven system for success. Let’s explore some case studies of companies that leveraged Kanban to see major growth.


Toyota adopted Kanban to their existing system to more easily visualize steps in the engineering process. The aim behind Toyota’s adoption of Kanban was to align their inventory levels with actual demand.

In Toyota’s system, a Kanban card was passed every time a bin of materials was emptied. This action signified to the warehouse how much stock needed to be replenished. As a result, Toyota was able to limit excess inventory in the production line and enable smoother communication between teams.


Nike’s adoption of Kanban stemmed from bad PR after word of poor working conditions in their factories spread. To improve conditions at their factories and mend relationships between staff and management, Nike implemented the pull strategy, which allowed employees to:

  • Work less overtime
  • Reduce late orders
  • Be better prepared for changing demand

Through Kanban, Nike was able to maintain their focus on innovation while simultaneously improving the quality of their working environment.

Importance of Kanban for small businesses

While the companies above are mammoths now, they were up-and-comers when they initiated the Kanban method. Growth-focused small businesses can see major benefits from Kanban, as the method can eliminate setbacks that tend to stunt growth — like losing capital to excess inventory and failing to optimize internal processes.

Small businesses are always looking for continuous improvement, regardless of whether they’ve implemented Kanban. Visualizing your workflows early on is the best way to pinpoint inefficiencies and find solutions.

Frequently asked questions

Still wondering what Kanban can do for you and your organization? Look no further. Here are a few of the most common questions and answers about Kanban in manufacturing.

What are the 4 principles of Kanban?

The four core principles of Kanban are:

  • Visualize the workflow
  • Limit WIP
  • Manage flow
  • Continuously improve

Together, these principles strive to achieve Kanban’s goal of increasing efficiency and reducing waste.

What is Kanban for raw materials?

When it comes to raw materials, Kanban ensures that the company only has the necessary amount of raw materials on hand at a given time — limiting the potential for waste.

In inventory management, this is best described as just in time inventory, or the idea that a company should only produce the necessary inventory to meet current customer demand.

What is Kanban in Agile?

Kanban is a method that exists within the Agile methodology. The Agile methodology broadly refers to a systematic approach to creating efficient processes prioritizing continuous improvement.

What are the 5 elements of Kanban?

David Anderson, a pioneer of the Kanban method, described the five elements of Kanban as:

  • Visual signals
  • Columns
  • WIP limits
  • A commitment point
  • A delivery point

These five elements are all components of Kanban boards and work together to ensure processes go smoothly.

Connecting inventory with Kanban

If you want cleaner dishes, you may have to reevaluate the way you load your dishwasher. Creating the most efficient internal systems is a bonafide path to success when it comes to growing a business — and it starts with how you manage inventory. Kanban works hand in hand with your inventory management technique, as the two processes can limit wasted time and wasted stock.

By automating your processes with comprehensive inventory management software, you’ll gain insights into whether Kanban makes sense for your business and where you can improve your inventory efficiency.

Start a free trial of Cin7 to streamline your processes today.  





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