--- title: "What Is Kanban in Inventory and Manufacturing?" url: https://www.uncap.com/glossary/kanban author: "Denis Dyli" published: 2026-10-28 updated: 2026-10-28 summary: "Kanban is a pull method of inventory and production control in which a kanban card authorizes making or moving parts only after parts have been used. Toyota describes the kanban as a tool that describes which and how many parts are used where and when, and says it made just-in-time production possible." --- # What Is Kanban in Inventory and Manufacturing? > Kanban is a pull method of inventory and production control in which a kanban card authorizes making or moving parts only after parts have been used. Toyota describes the kanban as a tool that describes which and how many parts are used where and when, and says it made just-in-time production possible. **Kanban**: Kanban is a pull method of inventory and production control in which a kanban card authorizes making or moving parts only after parts have been used. Toyota describes the kanban as a tool that describes which and how many parts are used where and when, and says it made just-in-time production possible. ## How it works Kanban inventory control replenishes parts only after they are used: the process that consumes parts pulls them from the process before it, and a kanban tells that earlier process what to make or move, and how many. This entry covers kanban in inventory and production control. Toyota calls this the pull system. Parts made in the preceding process are not delivered to the following process; the following process goes to the preceding process to pull the parts that have already been used, and the kanban card facilitates it. **The Toyota pull loop that kanban supports** ### 1. Store, Keep a minimum stock The preceding process keeps a store of finished products that the next process can pick up as it needs them. ### 2. Pull, Withdraw what was used The following process goes to the preceding process to pull the parts it has used, facilitated by a kanban card. ### 3. Replenish, Make what was taken The preceding process re-makes the parts that were picked up before the next pick-up. ### 4. Supplier, Pull from suppliers Kanban cards coordinate with the supplier so the required quantity arrives when needed. By producing parts according to the instructions on the kanban, Toyota says parts move between plants only in the volumes needed. Toyota adopted its kanban management system at all plants in 1963, and through 1965 extended kanban to retrieving parts from suppliers. ## Types of kanban rules in Dynamics 365 Microsoft's Dynamics 365 Supply Chain Management, which supports a lean pull system with kanbans, shows how one ERP models the method. In that product: - Manufacturing rules create process kanban jobs; withdrawal rules create transfer kanban jobs. - Fixed quantity: a constant number of kanbans. When all the products from a kanban are consumed and its handling units are manually emptied, a new kanban of the same type is created. - Scheduled: replenishes requirements calculated by master planning. - Event: replenishes requirements from sales order lines, production bill of materials lines, kanban lines or minimum inventory settings. ## Kanban vs. just-in-time [Just-in-time](/glossary/just-in-time-inventory) is one of the two pillars of the Toyota Production System: Toyota describes it as making only what is needed, when it is needed, and in the amount needed. Kanban is the tool Toyota introduced to reinforce that Just-in-Time production system. ## Example An assembly cell runs a fixed quantity rule with 4 kanbans of 25 units each. - Most stock in the loop: 4 x 25 = 100 units. - One container emptied: the cell uses all 25 units in a container, the container is manually emptied, and a new kanban of the same type is created for 25 more units. - What stays constant: the number of active kanbans is still 4, so the loop still holds at most 100 units. ## On Shopify In Dynamics 365, kanban rules, kanban jobs and kanban boards are part of the ERP's lean manufacturing features. On the Shopify side, replenishment shows up in inventory states: incoming inventory from transfers, purchase orders or apps isn't available to sell until it's been received at the location, and after you receive it from purchase orders or transfers its state automatically changes to Available. ## How Uncap helps Uncap's guide to [reorder and subscription workflows for consumables](/post/reorder-subscription-workflows-medical-supplies) covers par-level replenishment, which orders against a target stock level for accounts that manage inventory rather than orders: each cycle's order is whatever brings stock back to par. It all depends on the storefront and the ERP agreeing about stock in real time, which is the job Uncap Connect does in both directions. ## Related terms - Just-in-time inventory - Reorder point - Material requirements planning (MRP) - Safety stock - Wave picking ## Sources - Toyota: Kanban and the establishment of the Toyota Production System (75 Years of Toyota) - Toyota: Virtual Plant Tour, Toyota Production System - Microsoft Learn: Lean manufacturing overview (Dynamics 365 Supply Chain Management) ## Frequently asked questions ### What is a Kanban process? A kanban process replenishes parts only after they are used. The process that uses parts pulls them from the process before it, and a kanban card tells that process which parts to make or move and how many, so stock stays at the minimum needed. ### Where did Kanban originate? Kanban comes from the Toyota Production System. Toyota first tested kanban in the Honsha Plant Machining Division, adopted its kanban management system at all plants in 1963, and through 1965 extended kanban to retrieving parts from suppliers. ### Can you give me an example of Kanban? An assembly cell runs 4 kanbans of 25 units each, so at most 4 x 25 = 100 units sit in the loop. When the cell empties a container of 25, a new kanban of the same type is created for 25 more, and the number of active kanbans stays at 4.