1. Historical Background of Toyota’s Production System
Kanban System was found by the Vice-President of Toyota Motor Company Taiichi Ohno in the middle of the 20th century. The idea behind Kanban System came from US supermarkets and this system is about producing only the necessary products, at the necessary time, in necessary quantity (Sugimori et al., 1977).
The starting point of Kanban was the recognition of diversity of Japan’s features and the idea is developed by considering the two distinct characteristics of this culture : (1) lack of resources in Japan, (2) Japanese working culture (Sugimori et al., 1977).
After World War II, Japan was affected excessively - insufficient and unproductive land for agriculture - and this lead …show more content…
Stage i-1 Stage i+1 Stage i

Material flow
Kanban box
Dispatching board

Kanban flow
Figure 2.1. General overview of Kanban system: (1) Demand from stage i+1 originate, kanbans are withdrawn and placed on dispatching board. (2) Production starts and demand is sent to stage i-1 when demand exists at stage i. (3) Finished parts and kanbans are sent to stage i+1.
First of all, when parts are processed and demand from stage i+1 occurs in stage i, the production Kanban is removed from a container and then it is placed on stage i’s dispatching board which shows production schedule. Next, transport kanban from stage i+1 takes the place of the production kanban and container. This container and transport kanban are sent to stage i+1 for further processing.
At that time, in stage i, the produciton activity starts when production kanban and container with transport kanban are available. Production kanban takes the place of transport kanban which is sent back to stage i-1 to start production at stage i-1. This creates a production chain (Huang C. & Kusiak A., 1996).
In addition, there are other kanban cards using in production : (1) Supply kanban works between storage or warehouse to production plant, (2) procurement kanban travels from outside of a company to receiving area, (3) subcontract kanban travels between