Inventory organization is a fundamental tool for companies that depend on this area to store and ship products. Whether to avoid waste or to serve customers in the best way possible, it is essential to bet on methodologies that bring a more efficient logistical management.

In this sense, the Kanban system is a consolidated option for the task. With simple yet extremely effective features, Kanban can fully support any type and size of business.

Do you want to know the characteristics of Kanban, in addition to how it works and main benefits? So, check out the special article we’ve prepared below.

What is the Kanban system?

The Kanban stock system is a tool for managing stock within a company. Based on the just-in-time concept, the methodology is based on accurate logistical control, where requests are made according to operational needs.

In practice, the characteristics of Kanban make it possible to produce materials for sale only when this is a reality. Thus, the accumulation of stocked materials is significantly lower and, with it, the need for resources used.

How does Kanban work?

The Kanban system has a very simple working premise. Based on color signaling, logistics operators are able to know whether the production of an input is necessary or not.

For this, 3 levels of supply in stock are used. All are needed for color signage to work correctly:

• Minimum inventory, which corresponds to the lowest level of inputs that the inventory can operate. That is, the minimum inventory indicates that production needs to create new materials — at the risk of compromising the next operational stage if not prioritized;
• Safety or medium stock, which corresponds to the ideal stock management value, where there is a safety margin for possible material storage variations;
• Maximum Inventory, which corresponds to the total commitment of the storage capacity of the inventory. That is, when the maximum stock is reached, it is not necessary to continue with the production of the produced material.

Thus, with these well-established limits, it is possible to set up a visual management to indicate which level is present at that moment. This helps in automating inventory and, as we discussed earlier, in the timely use of business resources.

Color indication in practice

One of the most interesting features of Kanban is the ease of understanding — once the ground rules are known — of inventory management. For this, 3 colors are needed to indicate the storage stage:

• Green: indicates the maximum stock, or that it does not need more items for storage;
• Yellow: indicates safety or medium stock, where the production and movement level is close to ideal and the operation can continue;
• Red: indicates the minimum stock, where a shortage of items can occur if the production does not supply the stock with new materials.

Above, we can see the steps well divided into a visual model, showing where the production bottleneck is, in order to direct the work of the company’s responsible persons.

The cards show which inputs are in excess, in the ideal volume or missing in the stock. And, as we can also see, this control is done by steps and colors.

Main benefits of Kanban

Kanban characteristics bring important benefits to the logistic system and, consequently, to the organization and its marketing objectives. Below, we see the 4 main advantages of using the methodology:

1. Cost reduction

The first benefit perceived with the adoption of the Kanban system is the cost reduction. This happens because the materials are produced according to the company’s needs. In other words, as the stock is out of stock, it is possible to speed up the operation — and the same goes for full stocks, where the operation is paused.

Then, with tighter inventory control, you can only produce what’s ready to be delivered—behavior that doesn’t put business finances at risk.

2. Waste reduction

Logically, the operation in the just-in-time model a also avoids wasting inputs. This is because it reduces the chance of losing products in stock with low movement. Thus, the company can have better financial health and no danger to the business future.

3. Greater productivity

Productive operations can also be seen as one of the characteristics of Kanban. This is realized by the creation of materials being ordered — only — as stock changes.

In other words, there is no waste of unnecessarily produced resources, if the stock is very full, in the same way that production can operate at full capacity if it is necessary to supply the stock.

Also, work on demand allows the reallocation of inputs between areas. Thus, if an area has a lot of materials, they can be transferred to areas that need support. This brings more flexibility and dynamism to the operation.

4. Optimization of delivery times

Finally, as expected, we have a very important benefit in terms of delivery times, which are considerably reduced. This is made possible by greater productivity and reduced downtime, as we saw in the previous item.

In this way, we have customers who are more satisfied with the delivery deadlines and, consequently, more engaged in the relationship between the parties. And this provides a more solid and lasting relationship in the business, which positively affects the company’s results in the long term.

Therefore, as we could see throughout the content, Kanban characteristics are indispensable for stock systems, which can work optimally to meet market demand with quality and efficiency.

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