One of our major suppliers has sugested that we use a Kanban system to order parts from them. What is a Kanban system and how does it work?
Kanban is a Japanese word meaning “signal” and it used to describe a method of controlling material supply by “pulling” replacement materials as stock is used. A possible arrangement would be where you hold say three days of stock of a component and your supplier can replenish within 24 hours notice. A label can be attached to the last carton of goods (which will last for just over 24 hours) and the label is then faxed to your supplier to notify or “signal” to them that you have just begun using your last carton. They will use this as an order to get your next delivery to you within 24 hours.
