2. Literature Review
2.1 Lean Manufacturing Lean means manufacturing without waste. Waste (“muda” in Japanese) has seven types: waste from overproduction, waste of waiting time, transportation waste, inventory waste, processing waste, waste of motion, and waste from product defects. Despite the wide knowledge and available resources, many companies are struggling to stay “lean” (Shahram, 2007). The goals of lean manufacturing are to reduce waste in human effort and inventory, reaching the market on time, and managing manufacturing stocks that are highly responsive to customer demand while producing quality products in the most efficient and economical manner (Bhim et al., 2010). The concept of Lean Thinking (LT) originated from Toyota Production System (TPS) that determined the value of any process by distinguishing value-added activities or steps from non-value-added activities or steps; and eliminating waste so that every step adds value to the process (Antony, 2011). Lean manufacturing focuses on efficiency, aiming to produce products and services at the lowest cost and as fast as possible. For lean manufacturing, Kanban serves as a tool to control the levels of buffer inventories in the production; in simpler terms to regulate production quantities. When a buffer reaches its preset maximum level, the upstream machine is directed to stop producing that part type. Hence, in the manufacturing environment, Kanban are signals used to replenish the inventory of items used repetitively within a facility (Balram, 2003).
2.2 Kanban Kanban system is one of the tools under lean manufacturing system that can achieve minimum inventory at any one time. Kanban system provides many advantages in managing operations and business in the organization. Using Kanban system is a strategic operational decision to be used in the production lines. It helps to improve the company’s productivity and at the same time minimize waste in production. The Kanban system requires production only when the demand of products is available. Manufacturing companies especially in Japan have implemented Kanban system successfully as this system originates from this country. However, it was found that not all companies in Malaysia, particularly, among the small and medium enterprises (SME) in manufacturing sector, are deploying the Kanban system. Even though there are small medium enterprises (SMEs) using the Kanban system, they are facing problems in making the system effective. Thus, understanding the Kanban system is crucial in lean manufacturing.