iSixSigma

Kanban

Definition of Kanban:

« Back to Glossary Index

Do your processes have excessive work in process (WIP)? Would you like more visibility, transparency, and accountability across your workflow? If so, maybe you should use Kanban as a way to manage your processes and reduce your waste, increase your productivity and improve efficiency.

Overview: What is Kanban?

Kanban is a scheduling system for lean manufacturing also known as Just In Time (JIT) manufacturing. Taiichi Ohno, an industrial engineer at Toyota, developed Kanban, as part of the Toyota Production System (TPS)  to improve manufacturing efficiency.The system takes its name from the cards that track production within a factory.

Ohno identified and characterized the 7 wastes of lean with Overproduction being one of the key ones. Overproduction was a waste because customer demands may change leaving the organization with a large inventory of raw materials. The solution required keeping the inventory to a minimum while maintaining a high flow of work through the whole process. The question was how to signal a new product is required and how to send this signal back to the line and eventually to the raw material suppliers?

Ōno visited the United States in 1956, and was impressed how the supermarket chain, Piggly Wiggly, was able to keep the shelves stocked with just the right amount of product and minimal inventories. After coming back to Japan, Ohno began to use paper cards for signaling and tracking demand in his factory, and named the new system Kanban.

Kanban cards are attached to every finished product, and once sold, the cards move back to the production line. Operators only work on a new item as the card signaling a demand moves back to them. Every material used during production also had its own Kanban card attached. This demand signal should ultimately flow upstream to the entire production chain, ending with a signal for external suppliers to produce or ship more.

Below is a graphic of the basic Kanban flow of To Do, Doing and Done. There is also an example of a more complex one often used in Agile and software development.

3 benefits of Kanban

There are numerous benefits to using Kanban. Here are just a few.

1. Eliminates waste in the form of excess inventory, storage costs, and excessive handling

By using a pull rather than a push system, you will minimize the amount of work in progress resulting in reduced inventories of both in process as well as finished goods.

2. Better visibility of the process

Using the Kanban board, everyone can see how the work is moving through the process. The simplicity of its visual presentation lets you see where and when bottlenecks are forming.

3. More flexibility to respond to customer changes

Sometimes customers may change their requirements and expect you to respond in a very timely manner. Responding quickly to demand changes is crucial to building a sustainable competitive advantage.

Why is Kanban important to understand?

The use of Kanban may require you and your organization to think differently about how your processes should be managed. Here are some reasons you need to understand Kanban.

Critical need for detailed as-is process mapping

The first step in using Kanban is to map the existing process. Don’t make any changes until you fully understand what is currently going on in your process flow.

WIP is not a good thing

It will be an adjustment for several organizational functions if you now work to minimize inventories. Salespeople love having inventory so they can respond to any customer demand for products even if done infrequently. Manufacturing loves to do long runs of product which builds up WIP and finished goods inventories. In many cases, this results in obsolescence, shrink, and additional need for storage.

Incremental not radical change

Kanban is a great tool for creating incremental but continuous changes in your process flow. This has a side benefit of reducing resistance to change so improvements can be implemented faster.

An industry example of Kanban

An IT team needed to do some debugging of a newly implemented software program in Finance. To make sure the work was done smoothly without any delays, a Kanban Board was developed to allow everyone to visualize the flow, minimize in-process bottlenecks and keep track of progress. The photo below shows what the board looked like.

kanban board

3 best practices when thinking about Kanban

Here are a few tips on how to effectively use Kanban to manage the flow of  your processes.

1. Map the process

Kanban is a very visual tool, so it is important for you to map your process in appropriate detail. The use of Value Stream Maps will give you a detailed view of both material and information flows.

2. Minimize your WIP

Assuming your customer demand profiles and process flows are reasonably steady, keeping your product and process inventories or WIP at minimal levels should be achievable.

3. Make decisions based on data

During your process mapping and analysis, collect data so your decisions are not solely based on intuition or guesses.

Frequently Asked Questions (FAQ) about Kanban

1. What is Kanban?

Kanban, loosely translated, is the Japanese word for sign or card. The Kanban system simply means you use visual cues, such as cards, to trigger the action needed to keep a process flowing.

2. What are the basic elements of a Kanban board?

A basic Kanban board displays the work flow into three categories: To Do, In Progress, and Done.

3. What are the core principles of Kanban?

The four core principles of Kanban are:

  1. Visualize work
  2. Limit work-in-progress
  3. Focus on flow
  4. Continuous improvement

Kanban conclusion and summary

Kanban is a system for visually managing workflow as it moves through your process. The goal of Kanban is to identify potential bottlenecks and eliminate them so work can flow through quickly and without a buildup of WIP.

A Kanban system is intended to send signals to the entire value chain from the supplier to the end consumer. It helps avoid supply disruption, overproduction and excess inventory at various stages of the manufacturing process. Although originally intended for manufacturing, Kanban is now used in many non manufacturing applications especially in software development.

« Back to Dictionary Index