The industrial landscape is transforming at immense speed with the advent of Industry 4.0. This technological revolution, marked by interconnectedness, automation, and the integration of information systems, is profoundly redefining production methods. In the face of this increasing digitization and the omnipresence of ERP (Enterprise Resource Planning) systems, it’s fair to ask whether the principles of Lean Manufacturing remain relevant. More specifically, can the Kanban method—a Lean tool popularized by Toyota— still have a place in this highly digitized world? Isn’t the concept, based on using physical cards to manage material flow, at risk of being outdated by the computing power of ERPs and system automation?
Defining and operating the Kanban method
At its core, Kanban is a visual system for managing work and inventory. The word « Kanban » is Japanese for « visual signal » or « card. » The method’s key element is the use of cards (or other visual markers) to signal the need for new materials or to start a new task. The system works by establishing a set limit on the amount of work in progress (WIP) at each stage of a process. When a task is completed at one stage, a card is sent to the preceding stage, acting as a signal to start a new task or to produce a new part. This creates a « pull » of work, where a process only produces what is requested by the next step, thereby preventing overproduction and limiting inventory. A simple Kanban board can be divided into columns like « To Do, » « In Progress, » and « Done, » giving a clear, real-time overview of the production flow and bottlenecks.
The foundations of the "Pull System" in a Lean context
To understand the challenge, it’s essential to return to the origins of Kanban, which are deeply rooted in the Toyota Production System (TPS). One of its pillars is the « pull system, » which stands in opposition to the traditional « push system. » In a push system, production is triggered by demand forecasts. These forecasts are often inaccurate, which can lead to excessive inventory and overproduction. Conversely, a pull system operates based on actual demand. Each step of the process produces only what is needed for the next step, creating a continuous flow and minimizing intermediate stock. This approach reduces lead times and improves responsiveness to market variations. Lean Manufacturing is a management philosophy that aims to create value for the customer while eliminating waste. This involves tracking and eliminating the seven types of waste. The pull system is a powerful tool in this quest, and Kanban is the concrete method that makes it possible to visualize and manage it effectively.
Other Lean "Pull System" Tools
While Kanban is the most famous pull system tool, it is not the only one used in Lean. Another essential method is CONWIP (Constant Work-in-Progress). Unlike Kanban, which limits the number of items between each specific production step, CONWIP controls the total number of items in the entire production line. A single signal, often a card, is sent to the start of the line only when an item has been completed at the end of the line. This system is particularly effective for production lines with a limited number of product variants and stable flow.
Another important pull system is the Drum-Buffer-Rope (DBR), a concept from the Theory of Constraints. Here, the « Drum » is the bottleneck (the constraint) of the production line that sets the pace for the entire system. The « Buffer » is a stock of work-in-progress placed in front of the drum to ensure it never runs out of material. The « Rope » is the signal sent from the drum to the beginning of the production line, authorizing the release of new material at a pace dictated by the drum. The goal is to synchronize the entire line with its slowest process.
In more traditional settings, a simple « audio-based call » or andon is also used as a pull signal. For example, a worker can pull a cord or press a button to sound an alert (a « call ») when they need material, need help, or when a problem is detected. This signal immediately triggers a reaction from the upstream process or from a support team, pulling the necessary resources to the point of need.
The overarching philosophy behind these tools is Just-in-Time (JIT). JIT is a broader principle that aims to produce and deliver the right product at the right time, in the right quantity. While Kanban is the operational tool to achieve JIT, the JIT approach encompasses a holistic view of the supply chain, including supplier relationships and logistics.
Industry 4.0 and ERP Systems: Toward a New Era of Complexity
The industrial landscape has transformed in four major stages, each marking a significant technological breakthrough. Industry 1.0 began in the late 18th century with the invention of the steam engine, which enabled the mechanization of production and the creation of the first factories. Industry 2.0 emerged in the early 20th century with electricity, the introduction of the assembly line, and mass production, making products more accessible. This was followed by Industry 3.0 in the 1970s, characterized by the automation of production through electronics, IT, and robotics, replacing mechanical and analog systems.
Finally, Industry 4.0 is defined by the fusion of the real and virtual worlds through technologies like the Internet of Things (IoT), cyber-physical systems (CPS), big data, and artificial intelligence (AI). Factories are becoming intelligent, interconnected, and autonomous, capable of collecting and analyzing massive volumes of data in real time. Enterprise Resource Planning (ERP) systems are the nervous system of these companies, integrating all key functions. Next-generation ERPs, often cloud-based, are designed to orchestrate complex, large-scale operations. However, by their very nature, they can have a tendency to generate a production flow based on forecasts—a push system. They optimize schedules based on historical data, which can lead to overproduction if actual demand deviates significantly from forecasts.
Kanban: The Lean Planning Tool for Just-in-Time
It is precisely in this dilemma—between the planning power of ERPs and the need for reactive production—that Kanban finds its relevance. The principle is simple: it uses cards (physical or digital) as visual signals to authorize the production or movement of a specific quantity of parts. When a stage consumes parts, it sends a signal to the preceding stage to request new ones. This feedback loop ensures that materials are only produced or moved when they are needed and only in the necessary quantity.
The main advantages of Kanban for Just-in-Time (JIT) are the prevention of overproduction, inventory reduction, quality improvement, increased flexibility and responsiveness, and process standardization. Kanban doesn’t replace an ERP; it complements it by providing an operational layer for real-time flow management, ensuring that production decisions are based on actual consumption rather than forecasts.
The Unaltered Principle of Kanban in Industry 4.0
Despite the advent of 4.0 technologies, the fundamental principle of Kanban remains absolutely relevant. In fact, the integration of 4.0 technologies can even strengthen its effectiveness. Physical cards can be digitized and replaced by digital signals. Sensors can detect material consumption and automatically trigger a replenishment request via an e-Kanban system.
The integration of Kanban with Industry 4.0’s ERPs and Manufacturing Execution Systems (MES) is crucial. The ERP can define the general rules, while Kanban ensures granular, real time execution. The data collected by 4.0 systems can even be used to dynamically optimize Kanban parameters making the system even more agile. The Kanban 4.0 system then becomes an adaptive planning system that avoids overproduction, adheres to the Just-in Time approach, optimizes value streams, facilitates decision-making, and strengthens collaboration within the supply chain. Industry 4.0 doesn’t bury Kanban; it offers it new avenues to be more precise, faster, and more integrated, transforming a simple visual concept into a powerful tool for managing cyber-physical flows.
The evolution of the Kanban method, from its beginnings with simple physical cards to its digital embodiment in smart factories, attests to the strength of its fundamental principles. Kanban has always been a tool designed to apply the pull system, prevent overproduction, and respect the principles of Lean Manufacturing. The key takeaway, across technological revolutions, is not to be attached to the tool itself, but to preserve the principle on which it was created. In an Industry 4.0 world, technologies allow us to renew and optimize the tools for managing production and material consumption. However, the true relevance of these innovations lies in their ability to reinforce the pull principle. Industry 4.0 doesn’t spell the end for Lean; rather, it offers the opportunity to embed it more deeply.
The principle remains, and the tool continues to evolve.