There are dozens of tools and techniques used by organizations to support their continuous improvement efforts. The most successful companies pick a few methodologies that work well for them and execute them consistently. If improvement work slows down or a new challenge arises, they experiment with another technique. Whether you are just getting started with structured improvement or if your practice is mature, you might consider adding a tool known as the Kanban methodology. This post will cover the meaning of Kanban and a few of its key advantages.
What is Kanban?
We tend to think of just-in-time manufacturing as a relatively new concept. Dell builds your PC when you order it but does it quickly, so you are satisfied with the speed of delivery. Plus, Dell never has excess PC inventory on its hands. However, the idea is not new at all. In the 1940s, Toyota began applying the principle to its production lines after taking a lesson from an unexpected place: the grocery store.
The word kanban means signboard or billboard in Japanese.
When you go to the grocery store, it's rare to find an empty shelf. (Pandemic-related supply chain disruption, notwithstanding.) If you do find items missing, the shelves don’t stay empty for long. The reason is that the store has both the inventory on the shelf and some inventory in their own on-site warehouse.
While shopkeepers know that the store will lose money if they are out of an item that a customer wants to buy, they don’t want to stock more of a commodity than will be sold in a short enough time to ensure that the items are fresh. They also don’t want to tie up capital in inventory that is just sitting around. So, when a shelf is depleted, it is refilled from the on-site inventory, and only then are new items ordered from the manufacturer to replace the warehouse products.
Toyota realized that the same management technique would work for items needed on its manufacturing floor. They further enhanced the idea by adding Kanban cards, which served as a visual signal of the state of inventory. The approach can be applied to any business process with work in progress, so its use is not limited to the manufacturing of hard goods.
The Principles of Kanban
Principle #1 – Visualize Workflow
Given the origin of the word, it isn’t surprising that the first principle of Kanban is about visualization. Unlike some business process approaches, Kanban doesn’t proscribe a workflow; it only requires that work in progress be managed in a way that can easily be visualized. To begin a Kanban improvement, it is important to visually map the process as it currently exists. Only then will opportunities for improvement become obvious. Visualization continues once Kanban is implemented and communicates the state of projects, processes, and inventory.
Principle #2 – Limit Work in Progress
The goal of Kanban is to move every bit of work efficiently from beginning to end with as little waste and lag as possible. This requires limiting the amount of work in the pipeline to what can reasonably be managed at a given time. Like in the grocery store, inventory is pulled from the backroom to the shelf only when customer demand makes space for it. The Kanban approach moves work from one stage to the next only when it is pulled through by “customer” demand. Work is never pushed forward, so bottlenecks are avoided.
Principle #3 – Focus on Flow
When the first two principles of Kanban are in place, workflows freely and just feels easy. Your attention, therefore, should be focused on any interruptions in flow, which represent opportunities for additional visualization and process improvement.
Principle #4 – Continuous Improvement
Kanban isn’t something that is ever “finished.” The approach requires constant monitoring and analysis to look for the next best way to improve. Conditions, resources, and customer demands change over time, so it is essential to assess flow and look for blockers or friction teams can remove.
Benefits of the Kanban Methodology
With this kanban definition in mind, the benefits of the technique become clear. Including:
Get Quick Insight – People comprehend visual information much faster than they process text. You only need to look at a Kanban board or card for an instant to understand the current state of work in progress.
Identify Blockers – It might help to think about work as going in one end of a pipe and coming out the other. It goes in one state and comes out as something with more value. However, if you keep stuffing things into the pipe and nothing comes out, you’ve got a problem. Kanban boards and cards help avoid this problem by making it obvious when and where work is getting stuck and enabling managers to take the steps necessary to solve the problem.
Predict Results – Managers who have reasonable control over work in progress can quickly and accurately predict when projects will be completed. They know in advance if there is any reason to fear that deadlines will be missed. The Kanban method helps improve predictability by maximizing and visualizing flow.
Even if you don’t manufacture hard goods, the Kanban philosophy can be applied to whatever products you deliver, be it software, healthcare, or professional services. Creating a smooth, visualized flow from each work process to the next will help you decrease costs and increase value to your customers.