What Is Kanban?

What Is Kanban?

Let me tell you about Kanban—it's an inventory control system designed for just-in-time (JIT) manufacturing. Developed by Taiichi Ohno, an industrial engineer at Toyota, it gets its name from the colored cards that track production and signal when to order new parts or materials as they deplete. The word Kanban is Japanese for 'visual card,' so essentially, you're using visual cues to trigger the actions needed to keep your processes running smoothly.

Key Takeaways

You should know that Kanban serves as an inventory control system in JIT manufacturing to monitor production and order new shipments of parts and materials. It relies on visual cues to prompt the necessary actions for maintaining process flow. One primary goal is to prevent the accumulation of excess inventory at any stage in the production line. Kanban also works to reduce bottlenecks by encouraging communication and information sharing across individuals and departments. When implemented successfully, it can lead to lower expenses, higher customer satisfaction, more efficient processes, and reduced risks from unexpected issues.

Understanding the Kanban System

Think of the Kanban system as a signal and response mechanism. When an item runs low at a workstation, a visual cue indicates how much to order from the supply. The person using the parts places the order for the exact quantity specified by the Kanban, and the supplier delivers precisely that amount.

For instance, if a worker is bagging products on a conveyor belt, you might place a Kanban card in the stack above the last 10 bags. When the worker reaches that card, they hand it to a runner to fetch more bags. A station farther from the supply might have the card at 15 bags, while a closer one at five. You adjust the flow of bags and card placements to ensure no station runs out while the belt is operating.

This system works well within a factory, but you can also apply it to purchasing from external suppliers. Kanban provides exceptional visibility to both suppliers and buyers. Its main aim is to curb excess inventory buildup on the production line. You set limits on items waiting at supply points and reduce them as you identify and eliminate inefficiencies. If inventory exceeds a limit, it signals an inefficiency that you need to address.

As containers of parts or materials empty, cards appear, color-coded by priority, to allow production and delivery of more before shortages occur. Often, a two-card system is used: transportation cards (T-kanban) authorize moving containers to the next workstation, while production cards (P-kanban) permit the workstation to produce a fixed amount and order parts once they're used or sold.

Remember, Kanban requires company-wide commitment to be effective. Every department must perform their tasks on time to hand off to the next. Without this buy-in, Kanban methods won't work.

Kanban Core Practices

The Kanban method follows several core principles that guide how processes run and how team members participate.

Visualize Workflows

At its core, Kanban demands that you visually depict the process. Whether using physical cards or software, show each step with clear visual cues that identify tasks. This way, you see what each step involves, what expectations are, and who handles what.

Traditional methods used sticky notes for tasks, colored differently for work types, placed in swim lanes to group related tasks for better organization. Today, you typically use inventory management software for Kanban processes.

Limit WIP

Since Kanban focuses on efficiency, you aim to minimize work in progress (WIP). Encourage teams to finish current tasks before starting new ones. This allows dependencies to begin sooner and prevents resources like staff from waiting idly.

You need to assess internally the right WIP amount for your process, often linked to the number of workers; fewer workers mean lower WIP limits. This also reminds other teams to be mindful of their requests, as each group has working constraints.

Manage Workflows

As you undertake a process, identify strengths and weaknesses in the workflow. If limits aren't met or goals missed, manage the flow and address deficiencies.

A key part is spotting and eliminating bottlenecks before they happen, including forecasting production and resource use. As processes become predictable, you can make reliable commitments to customers and scale back unused resources for more efficiency.

Clearly Define Policies

Along with visualizing workflows, clearly define processes. Departments understand expectations, and Kanban cards assign responsibilities. This ensures workers know what's expected, checklist criteria for completion, and transitions between steps.

Implement Feedback Loops

With Kanban, gather information, analyze process flow, and make changes for improvement. Feedback loops enable continuous, incremental improvements that are easy to adapt. They help spot failures early and adjust before issues grow.

Improve Collaboration

Kanban breaks tasks into small cards, so individuals often rely on each other. Team members from different areas collaborate on transitions, resolve issues quickly, and communicate changes broadly, as adjustments in one area can affect others.

Kanban Board

Kanban uses boards to organize processes, with three main elements: boards, lists, and cards.

Boards provide the big picture, organizing broad workflow aspects. For example, you might have separate boards for departments like finance or marketing, gathering related processes in one workspace.

Lists are the to-do items within boards, such as manufacturing stages. They represent production phases and often flow sequentially.

Cards reside in lists as detailed action items needed to complete them. For a manufacturer, this could include contacting suppliers, confirming materials, ordering, receiving, and starting production—each potentially broken into mini-projects.

Electronic Kanban Systems

Electronic Kanban systems are common for real-time demand signaling across supply chains, integrated into ERP systems. They use digital boards, lists, and cards to communicate status across departments.

Companies like Toyota, Ford, and Bombardier use these, providing visual signals while automating tasks like transport or purchase orders.

Scrum vs. Kanban

Both Scrum and Kanban help companies operate efficiently, but they differ in approach. Scrum sets fixed timeframes for changes, while Kanban makes continuous adjustments.

Scrum divides tasks into sprints with defined periods and execution rules, no deviations allowed, overseen by a product owner or scrum master, measured by velocity.

Kanban is adaptive, analyzing past work for ongoing changes, with teams setting their own cycles, measured by cycle time, throughput, and WIP.

Benefits of Kanban

Kanban offers benefits from internal efficiencies to customer impacts. It visualizes task flows for greater transparency, helping participants understand sequences and interrelations.

Companies using Kanban often see faster turnaround in manufacturing, packaging, and delivery, reducing carrying costs and turning over capital quicker.

It provides predictability by outlining steps, allowing preemptive planning against risks and roadblocks.

Ultimately, Kanban aims for better customer service through efficient processes, lower prices, faster delivery, and quicker resolutions.

Disadvantages of Kanban

For some companies, Kanban isn't feasible. It requires stable, predictable processes; in dynamic environments, it can be hard to apply.

Kanban ties to other methodologies like JIT or Scrum, so partial adoption might miss full benefits, like unnecessary inventory costs without JIT.

It needs consistent updates; unmarked tasks can mislead teams, and without timing assessments, workers must track allocations and deadlines.

What Are the Rules of Kanban?

Kanban requires continuous improvement, feedback loops, and resource efficiency. You must visually depict processes, assign tasks to swim lanes, and ensure communication of changes across the project.

Why Do We Use Kanban?

We use Kanban to save time, money, and resources by minimizing downtime between tasks and targeting bottlenecks in advance to prevent idle work.

Is Kanban Agile or Lean?

Kanban connects agile and lean frameworks. It's agile in visualizing processes for advance changes and lean as a pull system ensuring just enough inventory moves through without pileups.

The Bottom Line

Kanban is a methodology to minimize waste, downtime, inefficiencies, and bottlenecks in workflows. You depict projects using boards, lists, and cards showing responsibilities. When done right, it cuts manufacturing expenses, uses labor efficiently, improves customer service, and shortens delivery times.