Advantages and Disadvantages of Kanban

Advantages of Kanban
1. Optimize inventory and reduce product obsolescence.
Since component parts are not delivered until just before they are needed, there is a reduced need for storage space. Should a product or component design be upgraded, that upgrade can be included in the final product ASAP (As Soon As Possible). There is no inventory of products or components that become obsolete.
This fits well with the Kaizen system on continual improvement. Product designs can be upgraded in small increments on a continual basis, and those upgrades are immediately incorporated into the product with no waste from obsolete components or parts.

2. Reduces waste and scrap
With Kanban, products and components are only manufactured when they are needed. This eliminates overproduction. Raw materials are not delivered until they are needed, reducing waste and cutting storage costs.

3. Provides flexibility in production
If there is a sudden drop in demand for a product, Kanban ensures we are not stuck with excess inventory. This gives us the flexibility to rapidly respond to a changing demand.
Kanban also provides flexibility in how our production lines are used. Production areas are not locked in by their supply chain. They can quickly be switched to different products as demand for various products changes. Yes, there are still limits imposed by the types of machines and equipment, and employee skills, however the supply of raw materials and components is eliminated as a bottleneck.

4. Increases Output
The flow of Kanban (cards, bins, pallets, etc.) will stop if there is a production problem. This makes problems visible quickly, allowing them to be corrected ASAP.
Kanban reduces wait times by making supplies more accessible and breaking down administrative barriers. This results in an increase in production using the same resources.

5. Reduces Total Cost
The Kanban system reduces our total costs by:
• Preventing Over Production
• Developing Flexible Work Stations
• Reducing Waste and Scrap
• Minimizing Wait Times and Logistics Costs
• Reducing Stock Levels and Overhead Costs
• Saving Resources by Streamlining Production
• Reducing Inventory Costs

6. Improves Flow
7. Prevents overproduction
8. Places control at the operations level
9. Improves responsiveness to changes in demand
i.e. Synchronization of supply and demand

10. Lead time is kept to a minimum
11. Totally customer driven demand
12. Better machine utilisation
13. Reduced or eliminated queues
14. Limit the spaces for WIP to hide.
15. Quickly improve factory control and WIP reduction efforts.


Disadvantages of Kanban:

1. It is less effective in shared-resource situations. Suppose the upstream station made several parts. Then a request to make more of the part needed by the downstream station will have to wait if other parts have to be made. A buffer is needed to ensure the downstream station doesn't run out meanwhile. And, because each part needs a separate signaling card, the system becomes more complex than if the resources were dedicated.

2. Surges in mix or demand cause problems because kanban assumes stable repetitive production plans. It is less suited to industries where mix and volumes fluctuate.

3. Kanban in itself doesn't eliminate variability, so unpredictable and lengthy down times could disrupt the system; poor quality in terms of scrap and rework also affect its good functioning.

4. Kanban systems are not suited for manufacturing environments with short production runs, highly variable product demand, poor quality products, and a multitude of product types.

5. A breakdown in the kanban system can result in the entire line shutting down.

6. The throughput of a kanban system is not managed but is instead a result of controlled WIP and known cycle times.

Advantages and Disadvantages of Kanban