How to Calculate the Number of Kanban Cards
Anyone with a material or production management system based on kanban knows this: one of the key aspects for the proper functioning of the kanban system is to correctly calculate the number of kanban cards required for each component, a crucial parameter for balancing stock levels and material flow.
If the number of cards is too low, stockouts and production stoppages may occur. If it is too high, there is a risk of excess inventory, high storage costs, risks of obsolescence, and unnecessary capital immobilization.
In this article, we will explain:
- How to calculate the correct number of kanban cards
- The issues related to calculating kanban cards
- How to simplify the calculation of kanban cards through digitalization
Formula to Calculate the Number of Kanban Cards
The basic formula for calculating the number of kanban cards, is based on the standard deviation and is as follows:
- N (Number of Kanban): total number of cards
- D (Average Demand): average daily consumption of units
- LT (Lead Time): total replenishment time (production + transportation + waiting)
- C (Container Capacity): number of standard units in a single kanban container
- S (Safety Factor / Deviation): percentage of safety stock to cover demand variability
Example of Calculation
Imagine you work in a company that produces preassembled car parts and needs to calculate the number of kanban cards for a specific component. Here are the available data:
- D (average daily consumption): 100
- LT (Lead Time): 2
- C (container capacity): 20
- S (safety stock): 10%
In this case, the number of kanban cards needed to optimally manage the stock of the examined component is 11.
Note: in the case of non-integer numbers (e.g., 0.2), the numbers must be rounded up since cards cannot be fractional.
Factors to Consider in Calculating the Number of Kanban Cards
In addition to the basic formula, there are other factors that may influence the calculation of the number of kanban cards, including:
- Demand fluctuations: if material demand is seasonal or subject to fluctuations, it may be necessary to add extra stock or periodically review the number of kanban cards.
- Supplier reliability: if suppliers are not always on time, it may be necessary to increase the safety stock to cover unexpected delays.
- Product type: some products may require a different approach, such as items with long production times, high cost, or short shelf life.
Typical Problems with Calculating Kanban Cards
When calculating the number of kanban cards, there are several typical problems that companies encounter, making sizing more complicated than it appears at first glance:
1. Need to constantly update the number of cards due to fluctuating demand and lead times
Material demand and replenishment times can vary over time, and when these changes are frequent, the calculated number of kanban cards quickly becomes outdated. This requires continuous recalculations and adjustments to maintain system efficiency. This ongoing card update activity, called “kanban maintenance,” is crucial for the proper functioning of the system.
2. Inability to scale the manual process
In traditional kanban systems, recalculating cards requires manual activities such as updates, reprints, and replacements, which are time-consuming and prone to errors. If the number of components and materials managed is limited, maintenance is still manageable. However, as products and variables to be managed increase, the time required to maintain the kanban system grows exponentially. This makes the system difficult to scale, forcing companies to limit kanban management to only a part of the materials, despite the potential for broader and optimized management.
3. Lack of reliable data
An accurate calculation requires precise data on demand, lead times, and variability. Often, this data is not updated or collected systematically, leading the sizing to be based on rough estimates rather than concrete numbers. As a result, the risk of stockouts or excess inventory increases significantly, compromising efficiency and raising operational costs.
How to Simplify and Speed Up the Calculation of Kanban Cards through Digitalization
To overcome the challenges associated with manual kanban card management, more and more companies are digitizing their maintenance processes by implementing electronic kanban software.
These software solutions, once integrated into the company’s kanban system, offer numerous operational advantages.
In particular, with regard to calculating the number of cards and maintaining them, adopting electronic kanban software allows for the following benefits.
- Automatic collection and tracking of real consumption and lead time data, providing real data on which to base the automatic calculation and detect potential problems before they occur, such as consumption spikes above average or supply delays.
- Automatic calculation of optimal sizing: thanks to real consumption data, the system automatically calculates the optimal sizing for each part number in the system, suggesting whether to reduce or increase the number of cards. The Lean or Production/Purchasing manager can choose whether to accept the suggestion, considering any limitations (e.g., for bulky or expensive materials).
- Simplified physical card maintenance: after resizing the cards, there is no need to replace the existing cards with new updated versions (for example, to indicate that a card is “1 of 4” in circulation). If the number of cards needs to be increased, you can simply print the new cards using the template automatically generated by the system, which can be printed with a single click. If the number of cards needs to be reduced, you can allow the ‘extra’ cards to be depleted without the system requiring their replenishment. This process makes maintenance much simpler and faster.
How El.Co. Overcame Issues Related to Kanban Card Sizing
El.Co., a company specialized in manufacturing electrical components for industrial automation, had a non-digitalized kanban system, and its maintenance caused significant problems, leading the company to reduce the number of components managed by kanban to avoid dedicating too much time to their maintenance.
“As the number of kanban-managed lines increased, so did the time required for system maintenance. We were fortunate that the demand for our products didn’t change rapidly, but we reached our limit when my colleague and I found ourselves dedicating three days every two months to calculating and adding/removing kanban cards. It was an enormous task that took time away from other activities”.
Nicolò Zaffonato, Chief Operating Officer, Lean Manager and Board Member of Directors at El.Co. Srl
Having reached the breaking point, the company adopted KanbanBOX, an electronic kanban software that allowed them to significantly simplify and speed up the maintenance of kanban cards.
With KanbanBOX, the maintenance and sizing of kanban cards now takes only a few minutes each day. This has allowed us to finally extend kanban management to other lines and items, which were previously excluded to avoid further burdening the maintenance process.
Nicolò Zaffonato, Chief Operating Officer, Lean Manager, and Member of the Board of Directors at El.Co. Srl
Kanban Card Calculation: From a Tedious Manual Task to a Streamlined and Efficient Activity
Calculating the number of kanban cards is essential to ensure that the kanban system operates correctly and that production flows smoothly. The basic formula will help establish a balanced system, but it is important to consider the various factors that influence demand and supply.
If you want to simplify the calculation and management of kanban cards, adopting an electronic kanban system like KanbanBOX will be an important strategic choice. Thanks to its integration with the ERP and the automatic transmission of replenishment orders, you can gain full visibility and significantly reduce the risk of errors and excess inventory.
To learn more, contact us for a free demo
Case studies
Sacchi | Electrical Supply Distribution
Sacchi uses KanbanBOX to offer its customers a kanban-based sales service, ideal for recurring supplies and supports long-term customer loyalty
Oleodinamica Marchesini | Hydraulic valves
Oleodinamica Marchesini has optimized its production flow management by implementing multi-process kanban and pull production
Robopac | Packaging machines
With KanbanBOX, Robopac achieved a more integrated, responsive, and digitalized supply chain thanks to the integration with both external suppliers and SAP
BCS | Agricultural Mechanization
BCS moved from push to pull through E-kanban for suppliers, production, and internal flows. They now manage 6000 kanban loops across 3 plants
El.Co. | Industrial Electrical Automation
El.Co. has simplified the maintenance of kanbans with e-kanban, which was previously so onerous that the number of parts managed by kanban had to be limited
Orotig | Welding Industry
Orotig has implemented sequential pull in the company, optimizing multi-process production scheduling and supplier integration with KanbanBOX
Rossi SpA | Gearmotors and Electric Motors
Rossi Spa has digitalized the existing production and move kanban, then integrated it with its own ERP, with Oracle Sequencer and with suppliers
Aptiv | High-tech automotive systems
From the introduction of kanban to the transition to e-kanban. The Lean Improvement journey of the largest manufacturer of electronic interconnection systems for the automotive sector
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