Real-World Kanban

What Is Kanban?

Kanban was originally a tool used by Toyota to balance demand and capacity across the value chain. The idea is simple: a Kanban card is sent upstream when there is a need for parts. It is only then that production for the needed number of parts is done. The arrival of a new card is a signal to produce more parts, and a lack of cards is a signal to stop. The number of cards is limited to prevent overproduction and to reduce the parts needed in production. Keeping half-finished parts ties up valuable working capital that can otherwise be used for investments.

Let’s take a look at how it works in the familiar case of a burger joint.

The challenge our burger joint faces is keeping fresh burgers ready to serve while the number of ...