Continuous improvement is such an important part of modern business that organizations and experts have developed numerous process methodologies, techniques, and tools to support such efforts. Of course, no company uses them all. Most pick several approaches that fit well with their structure and culture. One technique that is popular in a surprisingly wide array of business types is Kanban. In the simplest terms, Kanban is better communication through visual management.
A Brief History of Kanban
Like many of the most popular continuous improvement techniques, Kanban was brought to America from Japan. Kanban means signboard or billboard in Japanese. In the 1940’s, a Toyota executive noticed a few things about how grocery stores operate and applied the same thinking to automotive manufacturing.
Grocery stores face a certain dilemma. They need to have what the customer wants to buy on hand, or the customer will shop somewhere else. But it doesn’t make financial sense to keep a big inventory, especially of perishable products. To get the right balance, shopkeeper place some items on the shelves and store a small inventory in the back room. When they notice an empty shelf, they bring in the stored inventory and only then do they order more of the product. The empty shelf provides a visual clue that an inventory shift is needed.
The Toyota team reinvented this idea for manufacturing. Front line workers get the parts they need from bins, which are only refilled from the inventory on-site when needed. The backroom inventory is likewise only reordered when it runs low. The need for an inventory shift is indicated by a Kanban card which provides a visual signal that additional parts are needed.
Kanban Beyond Manufacturing
Manufacturers are not the only companies that can benefit from Kanban. In fact, today, the technique is used by software companies, hospitals, fulfillment centers, and many other kinds of organizations. Any process where work is moved from one stage to another can benefit from the visualization that Kanban provides.
The Guiding Principles
The Kanban ideal is a stream of work that flows smoothly from one phase to the next. This is achieved in four key ways.
- Work is visualized
- Work-in-progress (WIP) is limited
- Interruptions in flow are targeted for improvement
- Improvement is continuous
Why Kanban Works
Work is Visualized - Scientific research has proven that people understand visual information more than 60,000 times faster than text. A Kanban board or card conveys information about the state of work much more quickly than a report or even a quick email ever could.
Backlogs Become Obvious – When work is stalled at one point or another it is important for managers to act quickly to alleviate the problem. If they don’t many of the wastes that organizations work so hard to eliminate can occur. Kanban is one way to make a growing backlog obvious and help managers identify the business process that needs urgent attention.
Results are More Predictable – Leaders who can literally see into business processes are in a much better position to accurately predict whether goals will be met on time. They know early on if additional time or resources will be needed. This level of control stabilizes the entire business.
Kanban is an effective and simple way to visualize work and provide a structure for good flow. Organizations dealing with missed deadlines, uneven processes, or lack of visibility into the state of work should consider giving Kanban a try.