Kanban Process – Understanding the Steps for Better Efficiency

Kanban A to Z

kanban-boardKanban is one of the older Lean tools or strategies tracing its origins back to (where else) Toyota. Kanban itself is system that helps companies sort through their potentially hectic operations and come out on the other side with the most efficient way possible to cope with their own supply and demand. Kanban, however, so its purpose of creating simplicity and efficiency, is a fairly complex tool to master.

For this reason, I’m going to try and cover every little thing I can think of in this post, to try and answer any questions before you might have them. We’re going to discuss the background and philosophy of the concept, the basics of implementation, and also advanced variations and tips for how to approach your own Kanban system to make it work for you.

Background

Back in the 1940’s, Toyota looked to an interesting role model for its supply and demand models. In hindsight, it makes perfect sense and one wonders how manufacturers didn’t make the connection sooner. What I’m talking about, and what Toyota was interested in, was the efficiency of grocery stores. Even today, where preservatives and modern packaging techniques ensure foods last longer and longer on supermarket shelves, grocery stores still have to be keenly aware of how much they’re stocking.

To avoid having fresh fruits and vegetables rot on the shelves, stores have a good idea of how much of an item they can sell in a given time period. In short, they have their finger on the pulse of customer demand. If they know they’ll sell 50 apples per day, for example, they aren’t going to bring in 100 per day from their suppliers and wait for half of their stock to rot.

Toyota took note of how grocery stores approached this problem, and began to think about how their own warehouses and factories could be improved using a similar approach. What Toyota was hedging their way into, here, was just-in-time production. Just-in-time, or JIT, production is a production process in which projects are completed just as required by demand. It is widely known about today, and helps to perpetuate the primary Lean objective of minimizing, or eliminating, waste.

More than anything, achieving JIT production is about knowing your market. On the other hand, while it’s always preferable to know your market inside and out, Kanban management can help to make sure you can work efficiently within new or unknown market conditions right away. Because the nature of Kanban is that your production comes strictly from what’s already been demanded, those who have short lead times on their product creation and distribution cycles will likely find it easiest to implement. That said, those with long lead times still benefit, especially if those times are associated with increased cost.

A great example of a Kanban in a long lead time industry is aircraft production. Airplane manufacturers like Boeing and Airbus would never spend the tens to hundreds of millions of dollars required to build an aircraft without a standing order from an airline. The airlines, in turn take lead times into considerations when projecting their own needs. To them, the manufacturers are suppliers, and they have their own Kanban that tells them that when the number of planes they own starts to be unable to accommodate the amount of passengers and routes they service or seek to service, they will put in an order for more aircraft.

In all likelihood, your business is not one which operates on lead times that on the scale of airlines and airplane makers. Luckily, Kanban is a very adaptable concept and can be applied to just about any size and complexity of operation.

Kanban’s Split Personality

One of the biggest and most frustrating problems of Kanban for me early on was the fact that the very concept itself is fragment. What’s worse, is nobody ever seems to address it. What I mean by this is that various different books, blogs, and more tend to give varying amounts of weight to different aspects of Kanban. When the focus is entirely on one angle, someone studying from that source could have a completely different idea of what actions they have to take to be implementing Kanban in their workplace.

One of the biggest issues is that Kanban, while also an overarching concept, is also used as a noun (sometimes as a stand-in for ‘Kanban cards’ and markers). Let’s take a look at all of the different things Kanban can be, or rather, the various elements that make up Kanban.

Kanban Is A Visual Organization System

Kanban Board Showing Lead Measures. Special Thanks to business901.com for sharing their photo.

One of the most common things to see when researching Kanban is a chart, usually divided into columns and setup a bit like a To-Do list. In this setup, each column represents a process within the supply chain. Such a format allows you to map out your entire chain in a simple, visual way. Within these columns, either written on a whiteboard or represented with sticky notes or magnets, every item currently in your supply chain is represented and placed in the column which corresponds to its real life location or status.

Sometimes tasks are represented as well, drawing an even closer parallel to a To-Do list. A maintenance schedule, for example, might be represented by show which machine is currently being serviced and moving its marker as that changes. Regardless of whether you follow this format closely or not, it is generally understood that the ability to visually track overall production is an important element of Kanban. In most large operations these days, this often means the use of special software designed for those tracking Kanban, amongst other Lean metrics (like takt time, for example).

To some, it becomes apparent that they’ve been taught that Kanban is simply this visual map, but most professionals will agree that’s simply incorrect. Having said that, one of the main principles, rules even, of Kanban is to visualize your workflow. Regardless of the complexity or simplicity of your operations, and important first step will probably be to make a Kanban board that gives you a bird’s eye view of all the important stuff.

Kanban Is A “Pull System”

free-kanban-guide-th-211x221Probably the most commonly used ‘catch all’ definition for Kanban is the idea of a system in which one process “pulls” from another. In other words, it’s system in which one part of production cues another to begin stocking, producing, shipping, etc. If the Kanban board or visualization are the skin of the Kanban body, then the concept of processes pulling their cues for *just the right amount* of work from other stages of production would make up the internal organs – they keep the Kanban principles alive, and are ultimately what get you closer to your JIT production goals.

In practice, here’s what a simple Kanban system might look like. Let’s say you receive an order for 17 rubber ducks. Assuming the bath time market is tough to predict, you decide to only produce rubber ducks as they are ordered. When the order is placed, your supplier is signaled to send the necessary materials for 17 ducks. This signals your workers to prepare the workspace with exactly the number of tools and accessories needed to make 17 ducks, no more, no less, when the main supplies arrive. As the ducks are put together, a Kanban is triggered to begin one cooling bar – just enough for the number of ducks being ordered. After the ducks are molded and solidified, exactly 17 ducks (you wouldn’t send a client more or less than they ordered, would you?) are shipped out to the customer. With no Kanban signaling more to the order, you shut down the machinery used until it’s required again. Please note: I have no idea how rubber ducks are made.

The important part in this silly example is that no stage of production was engaged without an exact plan, which was signaled by the step in front of it. The easiest illustration of Kanban in the whole example comes from the final stage in which the ducks are shipped out. No matter what is ordered from you, you’re probably going to send exactly that amount. You don’t want to send too few and have disappointed customers, and you don’t want to lose money by giving away too many freebies, so what you send is exactly what the order form specifies. The order form is a Kanban. All you’re really doing, is making every step of your process and “order form” for the one following it. I like that definition. I’m going to use it more. I wish I’d thought of it a long time ago (oh well).

Kanban Is A Card

Kanban Card Example – Thanks to leanvalley.eu for providing the example.

Another element of Kanban is the Kanban card. While a simple concept, it’s complicated a little bit by the fact that there are two types. First, there are cards which are placed on your Kanban board. These cards generally indicate an order amount, item type, and any other relevant specifics, and are moved from column to column as the order progresses.

The other type of Kanban card, and perhaps most true to that name, can be physically attached to orders or placed at the process in which an order currently resides. One of the big ideas behind Kanban is, whether tracked digitally, physically, or mentally – which I would never recommend, especially if you handle any sort of volume – that an order/product/group of products is never moved unless accompanied by a Kanban.

Adhering to this rule ensures that everyone involved will always know what an order is for, how far along it is, etc. These tags are generally fairly detailed, here are a few particulars you might want to include:

  • Item type
  • Item quantity
  • Who the order is for
  • When it is due/supposed to be finished by
  • Any special considerations or requests (both from you or the buyer)
  • Any safety concerns workers should be aware of while handling or completing the order
  • An order number that’s trackable by any digital system you employ

Options When Approaching Work In Progress

As you can probably imagine, a large part of effective Kanban is managing your work in progress. In most businesses who keep inventory and have a more traditional method of conducting their operations, many items will likely be in production at once, even if not all of them have been specifically called for by demand. Proper use of Kanban will help you avoid this, but you have to be able to implement it in a practical way in order to keep your business running smoothly in the meantime while you find your sweet spot.

There are two ways of using estimation to find the amount of objects in progress you should start at each day/week, etc. The first, says that you should conservatively low, to immediately limit production and ensure you don’t produce unwanted items. If you estimate needing 50-100 units created weekly to meet demand, then you would probably choose 50-75 as your starting point, and produce more if the actual demand turns out to be higher. Conversely, you could start out picking a number in the upper register, between 75 and 100 based upon the same calculations. If you’ve overproduced, you will reduce production from week to week until you’re reached perfect parity.

Both of these strategies achieve the same goal in the ends, though each one has certain implications that may sway a business to choose it over the other. While this may be specific to your operations, there are also some universally general truths about each.

For starters, setting a low work in progress limit right off of the bat is generally a quicker way to get to you precise number because workers are focusing on a smaller number of tasks. This translates to less defects, less administrative woes, and a clearer picture of where you are vs. where you want to be. The downside to starting low is that is can end up kind of painful if you have an unexpected influx that you aren’t ready to handle – clients may have to wait slightly longer than usual.

On the other hand, starting with a higher-than-expected volume of work in progress and then just lowering it over time can be more wasteful/create excess stock, but there are pluses as well. For one, having too many items on hand is going to be less stressful to workers than having too few. Second, having inventory will allow you to better accommodate your original best guess not being perfectly spot on, and is fine as long as you adjust to phase it out over time.

No matter which approach you choose, one of the most important things you can do is cultivate buy-in amongst your employees for your plan. One of the best ways to do this is to involve everyone, or a representative from every department if your worker count is especially high, in the planning process. If your workers understand where you’re coming from and how using Kanban techniques can eventually make their life easier and lead to savings in the business, they’re more likely to be on board. Benefits to communicate include potentially shorter work days or the ability to focus on other projects, and a lack of defects (one rule of Kanban is that orders don’t proceed with any defective products) so time doesn’t have to be wasted going back and redoing something that didn’t happen quite right the first time around. Plus, it’s less stressful to have to product 1,000 units a week because that’s exactly what you need than scramble to make 1,500 because you “might” need them or want a stockpile.

Part of switching your employees over to using Kanban means that they need to be well-trained on whatever system you’re using to track Kanbans; this ranges from the physical Kanban board, to a digital management system, to Kanban cards attaching to product orders – or any combination of the three. A smooth running Kanban system can quickly become confusing and ineffective if someone breaks the rules and forgets to keep Kanbans attached to works in progress at all times, and then to track that movement on any visual organizers as well.

bottleneck

On Bottlenecks

Finally, it is true that not every problem that could arise through the implementation of Kanban is directly the result of an employee being improperly trained, or even by your own misjudging demand. Bottlenecks in your production process often become painfully clear when it’s all mapped out in the way a Kanban board does, which may force you to confront some underlying problems.

When you do discover parts of your process that are limiting you, don’t be afraid to correct them first before hopping back on the Kanban train, even if you’re derailed a bit in the process, it will be worth it in the long run.

I hope you’ve found this dig into some of the finer points of Kanban to be not only helpful theoretically helpful, but also a platform you can build off of when implementing or tweaking such a system yourself in the near future.

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