What is Kanban?

Kanban is a visual system for managing work as it moves through a process. Kanban visualizes both the process (the workflow) and the actual work passing through that process. The goal of Kanban is to identify potential bottlenecks in your process and fix them so work can flow through it cost-effectively at an optimal speed or throughput.

Kanban, also spelt “kamban” in Japanese, translates to “Billboard” (“signboard” in Chinese) that indicates “available capacity (to work)”. Kanban is a concept related to lean and just-in-time (JIT) production, where it is used as a scheduling system that tells you what to produce, when to produce it, and how much to produce. 

It all started in the early 1940s. The first Kanban system was developed by Taiichi Ohno(Industrial Engineer and Businessman) for Toyota automotive in Japan. It was created as a simple planning system, the aim of which was to control and manage work and inventory at every stage of production optimally.

Kanban system ideally controls the entire value chain from the supplier to the end consumer. In this way, it helps avoid supply disruption and overstocking of goods at various stages of the manufacturing process. Kanban requires continuous monitoring of the process. Particular attention needs to be given to avoid bottlenecks that could slow down the production process. The aim is to achieve higher throughput with lower delivery lead times. Over time, Kanban has become an efficient way in a variety of production systems.

it is David J. Anderson who was the first to apply the concept to IT, Software development and knowledge work in general in the year 2004. David built on the works by Taiichi Ohno, Eli Goldratt, Edward Demmings, Peter Drucker and others to define the Kanban Method, with concepts such as pull systems, queuing theory and flow. His first book on Kanban – “Kanban: Successfully Evolutionary Change for your Technology Business”, published in 2010, is the most comprehensive definition of the Kanban Method for knowledge work.

The Kanban Method is a process to gradually improve whatever you do – whether it is software development, IT/ Ops, Staffing, Recruitment, Marketing and Sales, Procurement etc.

The four foundational principles and six Core Practices of the Kanban Methodology are provided below:

Foundational Principles

  • Start with what you are doing now: The Kanban Method (hereafter referred to as just Kanban) strongly emphasizes not making any change to your existing setup/ process right away. Kanban must be applied directly to current workflow. Any changes needed can occur gradually over a period of time at a pace the team is comfortable with.
  • Agree to pursue incremental, evolutionary change: Kanban encourages you to make small incremental changes rather than making radical changes that might lead to resistance within the team and organization.
  • Initially, respect current roles, responsibilities and job-titles: Unlike other methods, Kanban does not impose any organizational changes by itself. So, it is not necessary to make changes to your existing roles and functions which may be performing well. The team will collaboratively identify and implement any changes needed. These three principles help the organizations overcome the typical emotional resistance and the fear of change that usually accompany any change initiatives in an organization.
  • Encourage acts of leadership at all levels: Kanban encourages continuous improvement at all the levels of the organization and it says that leadership acts don’t have to originate from senior managers only. People at all levels can provide ideas and show leadership to implement changes to continually improve the way they deliver their products and services.

6 Core Practices of the Kanban Method

  • Visualize the flow of work: This is the fundamental first step to adopting and implementing the Kanban Method. You need to visualize – either on a physical board or an electronic Kanban Board, the process steps that you currently use to deliver your work or your services. Depending on the complexity of your process and your work-mix (the different types of work items that you work on and deliver), your Kanban board can be very simple to very elaborate. Once you visualize your process, then you can visualize the current work that you and your team are doing.

This can be in the form of stickies or cards with different colors to signify either different classes of service or could be simply the different type of work items. (In SwiftKanban, the colors signify the different work item types!)If you think it may be useful, your Kanban board can have different Swim Lanes, one for each class of service or for each work item type. However, initially, to keep things simple, you could also just have a single swimlane to manage all your work – and do any board redesign later.

  • Limit WIP (Work in Progress): Limiting work-in-progress (WIP) is fundamental to implementing Kanban – a ‘Pull-system’. By limiting WIP, you encourage your team to complete work at hand first before taking up new work. Thus, work currently in progress must be completed and marked done. This creates capacity in the system, so new work can be pulled in by the team. Initially, it may not be easy to decide what your WIP limits should be. In fact, you may start with no WIP limits. The great Don Reinertsen suggests (he did so at one of the Lean Kanban conferences) that you can start with no WIP limits and simply observe the initial work in progress as your team starts to use Kanban. Once you have sufficient data, define WIP limits for each stage of the workflow (each column of your Kanban board) as being equal to half the average WIP.

Typically, many teams start with a WIP Limit of 1 to 1.5 times the number of people working in a specific stage. Limiting WIP and putting the WIP limits on each column of the board not only helps the team members first finish what they are doing before taking up new stuff – but also communicates to the customer and other stakeholders that there is limited capacity to do work for any team – and they need to plan carefully what work they ask the team to do.

“An interesting side effect of pull systems is that they limit work-in-progress (WIP) to some agreed-upon quantity” – David J. Anderson

  • Manage Flow: Managing and improving flow is the crux of your Kanban system after you have implemented the first 2 practices. A Kanban system helps you manage flow by highlighting the various stages of the workflow and the status of work in each stage. Depending on how well the workflow is defined and WIP Limits are set, you will observe either a smooth flow within WIP limits or work piling up as something gets held up and starts to hold up capacity. All of this affects how quickly work traverses from start to the end of the workflow (some people call it value stream). Kanban helps your team analyze the system and make adjustments to improve flow so as to reduce the time it takes to complete each piece of work.

A key aspect of this process of observing your work and resolving/ eliminating bottlenecks is to look at the intermediate wait stages (the intermediate Done stages) and see how long work items stay in these “handoff stages”. As you will learn, reducing the time spent in these wait stages is key to reducing Cycle Time. As you improve flow, your team’s delivery of work becomes smoother and more predictable. As it becomes more predictable, it becomes easier for you to make reliable commitments to your customer about when you will get done with any work you are doing for them. Improving your ability to forecast completion times reliably is a big part of implementing a Kanban system!

  • Make Process Policies Explicit: As part of visualizing your process, it makes sense to also define and visualize explicitly, your policies (process rules or guidelines) for how you do the work you do. By formulating explicit process guidelines, you create a common basis for all participants to understand how to do any type of work in the system. The policies can be at the board level, at a swim lane level and for each column. They can be a checklist of steps to be done for each work item-type, entry-exit criteria for each column, or anything at all that helps team members manage the flow of work on the board well. Examples of explicit policies include the definition of when a task is completed, the description of individual lanes or columns, who pulls when, etc. The policies must be defined explicitly and visualized usually on the top of the board and on each lane and column.
  • Implement Feedback Loops: Feedback loops are an integral part of any good system. The Kanban Method encourages and helps you implement feedback loops of various kinds – review stages in your Kanban board workflow, metrics and reports and a range of visual cues that provide you continuous feedback on work progress – or the lack of it – in your system. While the mantra of “Fail fast! Fail often!” may not be intuitively understood by many teams, the idea of getting feedback early, especially if you are on the wrong track with your work, is crucial to ultimately delivering the right work, the right product or service to the customer in the shortest possible time. Feedback loops are critical for ensuring that.
  • Improve Collaboratively, Evolve Experimentally (using the scientific method): The Kanban Method is an evolutionary improvement process. It helps you adopt small changes and improve gradually at a pace and size that your team can handle easily. It encourages the use of the scientific method – you form a hypothesis; you test it and you make changes depending on the outcome of your test. As a team implementing Lean/ Agile principles, your key task is to evaluate your process constantly and improve continuously as needed and as possible.

The impact of each change that you make can be observed and measured using the various signals your Kanban system provides you. Using these signals, you can evaluate whether a change is helping you improve or not, and decide whether to keep it or try something else. Kanban systems help you collect a lot of your system’s performance data – either manually, if you use a physical board, or automatically, if you use a tool such as SwiftKanban. Using this data, and the metrics it helps you generate, you can easily evaluate whether your performance is improving or dropping – and tweak your system as needed.

Application software and tech product development teams have adopted Kanban as a way to implement Lean and Agile principles. The Kanban Method provides technology teams a great set of principles for visualizing their work, delivering products and services continuously and getting customer feedback more often and with greater speed. Consequently, it is helping teams get to market faster with greater fidelity to what the customers want from those products and services.

As effective as kanban systems are for helping structure your inventory management efforts, there are some common pitfalls to avoid.

Kanban systems only work when teams follow the rules consistently. If rules are followed sporadically, there will almost certainly be parts shortages.

Material with no kanban card attached, cards lying around, and past due cards without any action are all abnormal conditions and indicators of problems.

  • Don’t cheat the system.

People like to hedge. If there’s a secret stash, the kanban system won’t work to highlight problems.

  • Don’t blame kanban for other problems.

Kanban systems work like beacons. When suppliers are unreliable, parts quality is poor, or lead times are too long, kanban systems make the problems very noticeable. Don’t discard the kanban system—fix the problems.

  • Don’t stick with the same quantity forever.

When demand changes, the kanban quantities will have to change as well. For demand spikes a single special order, often called a ‘white card’ can be placed. For permanent changes, the quantity should be adjusted. Microsoft Excel and Word work together nicely to print cards quickly (merge functions) when demand changes.

Different style cards can signal different things. Triangle cards may be internal. Suppliers may be color-coded. Parts racks can themselves be kanbans. Use kaizen to improve the kanban process.

  • Kanbansare signals to take an action to get more material.
  • By themselves, kanbansdon’t reduce inventory. They need kaizento go along with them to bring quantities down.
  • Kanbansystems require industrial discipline. Most companies have a set of kanbanrules to follow.

The 6 Core Properties:

  1. Visualize
  2. Limit work-in-process
  3. Manage Flow
  4. Make Process Policies Explicit
  5. Implement Feedback Loops
  6. Improve collaboratively, evolve experimentally

The core concept of Kanban includes:

  • Visualize Workflow
  • Split the entire work into defined segments or states, visualized as named columns on a wall.
  • Write each item on a card and put in a column to indicate where the item is in the workflow.

 

  • Limit WIP
  • Assign explicit limits to how many items can be in progress at each workflow segment / state. i.e., Work in Progress (WIP) is limited in each workflow state.

 

  • Measure the Lead Time
  • Lead Time, also known as cycle time is the average time to complete one item. Measure the Lead Time and optimize the process to make the Lead Time as small and predictable as possible.

 

Principles

  1. Start with what you do now
  2. Agree to pursue incremental, evolutionary change
  3. Respect the current process, roles, responsibilities & titles
  4. Leadership at all levels

 

Kanban – Benefits

Kanban has the following commonly observed benefits –

  • Bottlenecks become clearly visible in real-time. This leads people to collaborate to optimize the whole value chain rather than just their part.

 

  • Useful for situations where operations and support teams have a high rate of uncertainty and variability.

 

  • Tends to spread throughout the organization naturally, including sales and management. This increases visibility of everything that is going on at the company.

 

  • Reduces inventory in the range of 25%-75%, thereby reducing company costs.

 

  • Since all segments/states in the workflow are visually organized, the required items, reducing the wait times and ensuring speed, continually support all the tasks in the workflow.

 

  • Overproduction of inventory is avoided, thereby saving resources and time as well. This is termed as eliminating waste.

 

Switching to kanban can be a chore (lots of cutting and laminating and Velcro), and it can be unnerving to see your safety net of inventory go away, but most people soon see the benefit.  Be careful—a kanban system, as robust as they can be, will fail if the process is ignored.