Procurement Glossary
Kanban: Visual control system for efficient procurement processes
November 19, 2025
Kanban is a visual control system from lean production that optimizes material flows and workflows using signal cards. In procurement, it enables demand-driven reordering and significantly reduces inventory levels. The pull principle ensures transparent processes and minimizes waste. Find out below what Kanban is, how it works in procurement, and what advantages it offers.
Key Facts
- Visual control system with signal cards for demand-driven material supply
- Reduces inventory levels by up to 30% through pull principle instead of push system
- Originating in Toyota production, now standard in lean management
- Three basic rules: No overproduction, visual inspection, continuous improvement
- Digital Kanban systems enable real-time monitoring and automatic order triggering.
Contents
What is Kanban?
Kanban is a Japanese control method that was originally developed at Toyota and is now used in various areas of procurement.
Basic principles of the Kanban system
The Kanban system is based on the pull principle, whereby materials are only reordered when there is an actual need. Signal cards or electronic signals automatically trigger ordering processes as soon as defined minimum stock levels are reached.
- Pull principle instead of push system
- Visual control via maps or digital signals
- Self-regulating material flow
- Continuous improvement (Kaizen)
Kanban vs. traditional ordering systems
Unlike conventional MRP systems, Kanban is event-driven and responds flexibly to fluctuations in consumption. While traditional systems are based on forecasts, Kanban is based on actual consumption, thereby reducing planning errors.
The importance of Kanban in Procurement
In procurement, Kanban enables lean inventory management and improved supplier integration. The close link between consumption and reordering results in stable supply relationships with reduced transaction costs and higher delivery reliability.
Process steps and responsibilities
Implementing a Kanban system requires structured process steps and clear responsibilities between Procurement, warehousing, and suppliers.
System implementation and parameterization
The introduction of Kanban begins with an analysis of material consumption and the definition of Kanban parameters. Minimum stock levels, batch sizes, and replenishment times are calculated based on historical consumption data.
- ABC analysis for material classification
- Calculation of the Kanban quantity per item
- Definition of trigger points
- Supplier qualification and integration
Operational control and monitoring
During ongoing operations, warehouse staff monitor Kanban signals and trigger orders. Procurement with suppliers and continuously optimizes system parameters based on changes in consumption.
Digital Kanban implementation
Modern Kanban systems use RFID technology or barcode scanners for automatic signal triggering. Integration into ERP systems enables real-time monitoring and automatic order generation without manual intervention.
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Important KPIs for Kanban
Successful Kanban implementation requires continuous monitoring of relevant key figures for system optimization and performance evaluation.
Inventory management KPIs
Inventory turnover and average inventory range measure the efficiency of Kanban control. Target values are 8-12 turnovers per year for C-parts and up to 52 turnovers for high-consumption A-parts.
- Inventory turnover rate
- Average storage range in days
- Capital tied up in inventory
- Obsolescence rate
Service level and availability
Deliverability measures how reliably the Kanban system meets material requirements. Target service levels of 98-99% for critical parts require precise parameter settings and reliable suppliers.
Cost efficiency and process quality
Transaction costs per order and error rates for Kanban signals evaluate operational efficiency. Automated systems reduce transaction costs by up to 60% compared to manual ordering processes while improving accuracy.
Risks, dependencies and countermeasures
Kanban systems involve specific risks that must be minimized through appropriate measures and backup strategies.
Supplier dependency and single-source risks
Close ties to a small number of suppliers increase the risk of failure in the event of delivery disruptions or quality problems. Dual sourcing strategies and qualified replacement suppliers reduce this dependency, but require additional coordination.
System failures and technical faults
Digital Kanban systems are vulnerable to IT failures and cyberattacks. Redundant systems and manual backup procedures ensure security of supply even in the event of technical malfunctions.
- Regular data backup
- Manual emergency procedures
- cybersecurity measures
- Supplier backup plans
Fluctuations in demand and planning uncertainty
Extreme fluctuations in demand can overload Kanban systems and lead to stock shortages. Buffer stock and flexible Kanban parameters with automatic adjustment to consumption trends offer protection against unpredictable peaks in demand.
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Practical example
An automotive supplier implements electronic kanban for 2,500 C-parts in assembly. RFID tags in storage containers automatically send reorder signals to the ERP system when 20% of the minimum stock level is reached. Suppliers receive EDI call-offs and deliver directly to the point of consumption within 24 hours. The system reduces inventory levels by 35% and completely eliminates manual ordering processes.
- Automatic inventory monitoring using RFID technology
- Direct EDI connection to 15 main suppliers
- 70% reduction in transaction costs
Current developments and effects
Digitalization and artificial intelligence are revolutionizing traditional Kanban systems and creating new opportunities for intelligent procurement management.
AI-supported Kanban optimization
Artificial intelligence analyzes consumption patterns and automatically adjusts Kanban parameters to seasonal fluctuations and market changes. Machine learning algorithms improve forecast accuracy and reduce stockouts by up to 25%.
IoT integration and smart Kanban
Internet of Things sensors in storage containers measure fill levels in real time and automatically trigger reorders. These smart kanban systems eliminate human error and significantly speed up response times.
- Automatic level measurement
- Predictive maintenance for Kanban hardware
- Blockchain-based supplier transparency
Sustainability and Green Kanban
Environmentally conscious companies integrate sustainability criteria into Kanban decisions. CO2 footprint and supplier standards are taken into account as additional parameters in the automatic supplier selection process in order to determine optimal order quantities from a sustainability perspective.
Conclusion
Kanban revolutionizes procurement through demand-driven material supply and drastic inventory reduction. The integration of AI and IoT technologies makes Kanban systems even more intelligent and responsive. However, successful implementation requires careful supplier selection and continuous system optimization. Companies that use Kanban strategically achieve sustainable competitive advantages through leaner processes and greater cost efficiency.
FAQ
What distinguishes Kanban from conventional ordering systems?
Kanban operates according to the pull principle and only orders when there is actual consumption, whereas traditional MRP systems are based on forecasts. This significantly reduces excess inventory and improves responsiveness to fluctuations in demand.
For which materials is Kanban particularly suitable?
Kanban works best for items with regular, predictable consumption and short replenishment times. C-parts, standard parts, and consumables are ideal candidates, while expensive A-parts require individual procurement strategies.
How do you calculate the optimal number of Kanban cards?
The Kanban quantity is calculated using the following formula: (average consumption × replenishment time + safety stock) ÷ container size. Safety factors are also taken into account to account for fluctuations in consumption and uncertainties in delivery times.
What requirements must suppliers meet for Kanban?
Suppliers need reliable delivery performance, short response times, and EDI capability for automatic call-offs. Quality stability and geographical proximity are other important factors for successful Kanban partnerships in procurement.
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