In conventional MRP procedures, production quantities and dates are calculated in accordance with actual customer/planned independent requirements and the required quantity and dates of the components are calculated by exploding the bill of material. The production quantities can be compiled for various requirements. The creation of lot sizes is based on the selected lot sizing procedure. In each production level, the lots are usually produced completely before being passed on for further processing. The dates calculated in MRP are the results of a detailed planning run for the current production level even if it is not known exactly when the material is required for the subsequent production level at the time of the planning run. The material is pushed through production on the basis of these dates (PUSH PRINCIPLE). This often leads to queue times before production can be started or until the material can be processed further. These queue times are planned as increased lead times or floats in planning and are rarely undercut. This results in high inventory and longer lead times in production.
In KANBAN techniques, no separate, higher-level planning is used to control the material flow through production. Instead, the work center further down the line (demand source) requests material from the preceding work center (supply source) only when it is required (PULL PRINCIPLE). For this purpose, a control cycle is created - with a fixed number of kanbans (cards) - between the supply source and the demand source. Each kanban represents a specific material quantity and usually represents a container (however, this need not be the case). When the material quantity of a kanban has been consumed, it is given the status EMPTY and is sent to the supply source. The kanban is the signal for the supply source to go ahead and produce the quantity of material recorded on the kanban. Once production is complete, the material is delivered to the demand source which confirms the receipt of the material by setting the status back to FULL. The lot size is determined by the kanbans and this quantity is produced by the supply source in one run. The total production quantity is calculated by the total number of kanbans sent to the supply source within a predefined period. Replenishment frequency is based on actual consumption. This means that if more material is required, the kanbans simply circulate between the supply source and the demand source more quickly. If less material is required, the kanbans circulate more slowly. If no material is required, then all the kanbans will remain at the demand source with the material, meaning that all of the components required to start producing the corresponding assembly are available. There is never more material in circulation than is defined by the number of kanbans in the control cycle and all of the production levels that are controlled using KANBAN techniques are always in a position to start production.