Key Points

• Kanban uses real-time visual workflow to let teams know exactly how something is progressing.
• Implementing a pull system for your materials is a fantastic way of reducing storage overhead and ordering what you need when you need it.
• Kanban boards can help to optimize flow by reducing the number of items being worked on at a time, allowing for greater focus and exposing pain points in the process.

Kanban finds its origins in Toyota, developed as a means to achieve equal production and productivity that the 1940s American automotive industry was achieving. While Toyota didn’t become a force to be reckoned with overnight, the use of the first Kanban cards set the stage for a manufacturing revolution.

Beyond manufacturing, Kanban is readily applied to just about any facet of a business you can think of. When looking at something like optimized supply chain flow, it can be daunting at first glance. You’ve got to deal with present inventory, ordering needed materials, and so forth. If you aren’t making use of Kanban boards in your supply chain management, now is the perfect time to get started.

Today, we’ll be looking at how to implement this for your supply chain, using practical strategies and the tools provided by Kanban.

Visual Workflow

Any Kanban board is going to be highly visual. Organized into distinct columns, you’ll see the start of projects, what’s in progress, and completed work items. This can be a boon for many facets of a business, especially when it comes to things like development, design, and manufacturing.

When applied in the hopes of an optimized supply chain, you’ve got the makings of something fairly powerful. If you’re looking to integrate Kanban for logistics, your first step will be to create boards for every stage of the supply chain. This might seem tedious, but stick with it, and you’ll see exactly why.

This will cover areas like raw materials, manufacturing, warehousing, distribution, and even customer delivery, depending on your industry. Compartmentalizing these Kanban boards at the start is a fantastic means of providing transparency throughout your entire organization, along with some other net benefits.

Real-Time Status

One of the biggest things to keep in mind with any Kanban board is that you’re creating a visual means of seeing how far something is progressing. A stakeholder, team leader, or even front-line worker can glance at the board and understand immediately what is happening at each stage of your supply chain. Cards move across columns, indicating their exact status. You aren’t in a lurch waiting for someone in another department to tell you what’s happening, you know, in a matter of seconds.

Just-In-Time

There is only so much space in a warehouse. Typically, we rely on things like demand forecasts to see what materials need ordering. Instead, you’ll want to implement a pull system, integrating JIT principles into your supply chain.

This reduces inventory substantially, along with space requirements and carrying costs. Further, you don’t need to order buffer stocks of materials to try and weather uncertain market conditions. Surplus inventory runs the risk of obsolescence and shifting market trends, and you don’t want to get caught holding the bag.

Demand-Driven Ordering

JIT principles dictate that you’re purchasing materials when needed. In Kanban, you’re essentially pulling necessary materials as circumstances allow. When a work item triggers the need, you’ll place orders, but until there is proven demand, you’re able to keep your warehouse nice and tidy.

Limiting WIP

One of the great benefits of Kanban is its visual workflow. Along with showing the status of work items, it can also help to point out where things are slowing down. You’ll want to establish clear policies on the number of items to be works in progress early on. This might seem counterintuitive, but multitasking leads to reduced focus. When you’re banking on increasing customer satisfaction, that can quickly turn into a nightmare when defects start slipping in.

Limiting WIP items allows team members to give their undivided focus to a given task. When you consider how costly mistakes in an unoptimized supply chain are, those mistakes add up quickly. You’ve got the added benefit of preventing an overwhelming amount of work from mounting. Items have a clear progression from start to finish, with hangups and pain points leading directly to my next point.

Limit the work, and you’ll see productivity soar.

Identifying Bottlenecks and Constraints

It doesn’t take much time at all to see where problem areas develop in your supply chain with Kanban. When work items pile up in a given board, you’re able to readily see what the problem is. While process improvement is a core function of any Kanban implementation, this allows any member of management to quickly assess the problem and develop a remediation of some sort.

There are plenty of ways that things go wrong in supply chains, but using Kanban will give you actionable data on what to do when it happens. You aren’t simply looking at the likes of Lead Time or Cycle Time, although those are impacted,

Communication

Any project lives or dies by communication, especially when it comes to vital matters like your supply chain. While a visual medium doesn’t necessarily prompt communication, it does aid in it. Process ownership is a must in Kanban, and will lead to a clear and concrete understanding of what is happening at every stage of the supply chain. Further, it aids in a few other benefits, namely in how we communicate with our suppliers.

Suppliers and Problem-Solving

When using digital systems, like a software Kanban board, you’ve got the opportunity to get your suppliers fully on board and in the loop with your supply chain. This has some notable benefits, as you’re getting the ability to have orders shipped without having to fire off an email or dial the phone.

Further, this allows you to quickly communicate when it comes to solving problems. As mentioned earlier, bottlenecks are all too easy to see in a Kanban board. By fostering an environment centered around communication, you’ve got the means to directly involve your team in the process improvement cycle. This helps not only with engagement but with giving a sense of purpose to your team when problems do arise.

Continuous Improvement

Kanban naturally generates quite a bit of data as you go through the motions. You aren’t just seeing what is completed, but you’re also gathering vital metrics like lead times, cycle times, and throughput. When placed into analytics, you’ve got the means to start developing process improvements on an iterative basis, either through the use of tools like DMAIC or by holding Kaizen events for your logistical departments.

Flexibility

Constant monitoring means you aren’t going to be caught flatfooted when something does go wrong. Kanban boards providing a constant stream of data means you’ve got everything you need to right the ship and adapt if materials aren’t readily available. Additionally, this flexibility means you can readily adapt to shifting market trends or the introduction of new products from the design stage.

Reducing Waste

It wouldn’t be a Lean tool without a mention of reducing waste. Kanban boards are a fantastic way of mitigating waste, as you’re keeping the team on task. This helps to reduce wait times, maintain consistent flow, and reduce transportation errors. While there are people at the heart of these processes, you’re taking some of the guesswork out of how to proceed.

Overproduction and Defects

Beyond general waste reduction measures, Kanban boards in supply chains also prevent overproduction. You aren’t just looking to keep producing until raw materials are expended. Instead, you’re looking to produce what is profitable as it is needed.

You’re also preventing defects, as any errors are going to be caught early on, especially given how compartmentalized your work items should be.

Other Useful Tools and Concepts

Looking to start your workday off right? You might want to see how Kanban applies to software development. When coupled with Agile principles, you’ve got a highly effective means of delivering software while reducing the time needed for testing and getting a handle on scope creep.

Additionally, you might want to look at how to build a Lean culture that lasts. Lean is a valuable methodology that has effective uses beyond manufacturing. Incorporating those teachings and making them part of your corporate culture is a way to get a competitive edge in a highly volatile market.

Conclusion

Kanban for supply chains is a powerful way of controlling the flow of materials, reducing defects, and fostering an environment of accountability and communication. It does take some work to get going, but you’ll be glad you did.