What does Kanban refer to in inventory management?

Kanban refers to a visual scheduling system that is used to manage material flows and optimize inventory management. This approach helps organizations maintain an efficient workflow by visualizing the status of inventory and production processes. It uses visual signals, often in the form of cards or boards, to indicate when new materials are needed, thereby reducing excess inventory and minimizing waste. This system promotes a pull-based approach, where inventory is replenished only as needed, fostering better responsiveness to demand changes.

The concept is rooted in lean manufacturing, aiming to improve efficiency and reduce lead times by making inventory levels more manageable and transparent. By using visually distinct signals, employees at various stages of production can easily communicate the status of items, leading to better coordination and reduced bottlenecks in the supply chain.

In contrast, the other options describe different aspects of inventory management that do not align with the core principles of Kanban. For example, techniques for cluster purchasing focus on aggregating orders to gain cost efficiency but don’t utilize visual signals for material flow management. Electronic inventory tracking involves using technology to monitor stock levels and movements but lacks the visual, systematic approach characteristic of Kanban. Lastly, strategies for long-term storage of surplus inventory prioritize holding excess stock rather than optimizing flow and responsiveness to demand,