Kanban System

From the diagram above, we can summarize that we use the “pulls” concept in Kanban system. Hup Seng only produces and delivers their biscuit when it needed customers. When the inventory at Sundry Shops is at a certain level, it will give a signal to Hup Seng to ask for more. Then, Hup Seng will send more inventory to the Sundry Shops in order to meet the customers demand.

Diagram above is a Kanban System. When customers ask for demand, the inventory in the buffer will reduce. When it goes to a certain quantity, it will give a signal to the Sundry Shops. Then the Sundry Shops will ask Hup seng to send more. When the demand is asking from Sundry Shops and Hup Seng warehouse’s inventory will utilize then it will give a signal to Hup Seng factory to produce more to make sure that the inventory is always enough when customers demanded.