What is Kanban?
A visual signaling system that triggers replenishment or production only when downstream demand consumes existing stock.
Definition
Kanban, Japanese for signboard or card, is a pull-based scheduling method from the Toyota Production System that authorizes work or replenishment based on actual consumption rather than forecasts. When a bin, card, or electronic signal indicates that stock has been drawn down to a trigger point, it authorizes the upstream process or supplier to replenish exactly what was used. This limits work in process, exposes bottlenecks, and prevents overproduction, one of lean's central wastes. Kanban can be physical (two-bin systems, cards) or electronic (eKanban inside an ERP), and it applies both to internal production cells and to supplier replenishment.
How Kanban Works in ERP
ERP systems implement electronic kanban (eKanban) by defining kanban loops with bins, trigger quantities, and replenishment sources. When inventory is consumed and a bin hits its reorder signal, the system automatically generates a replenishment order, transfer, or supplier release without a planner manually running MRP. The ERP tracks card status, calculates optimal kanban sizes from demand data, and provides visibility into loops across the plant.
ERP Vendors with Strong Kanban
Frequently Asked Questions
What is the difference between kanban and traditional MRP?
Traditional MRP is a push system that plans production from forecasts and a master schedule, releasing orders in advance. Kanban is a pull system that authorizes replenishment only when downstream consumption actually draws down stock. Many manufacturers use MRP for long-lead planning and kanban for fast-moving, repetitive items, and good ERPs support both side by side.
What is eKanban in an ERP?
eKanban is the electronic version of physical kanban cards managed inside the ERP. It tracks bin and card status digitally, automatically signals replenishment when trigger points are reached, and can size kanban loops based on actual demand history. This removes lost-card problems, gives planners real-time visibility, and extends pull signals to suppliers through portals or EDI.