Kanban

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Karen Abeyasekere, U.S. Air Force

 

Kanban (看板) (signboard or billboard in Japanese) is a scheduling system for lean manufacturing and just-in-time manufacturing (JIT). Taiichi Ohno, an industrial engineer at Toyota, developed kanban to improve manufacturing efficiency. Kanban is one method to achieve JIT. The system takes its name from the cards that track production within a factory. For many in the automotive sector, kanban is known as the “Toyota nameplate system” and as such the term is not used by some other automakers.[clarification needed]

Kanban became an effective tool to support running a production system as a whole, and an excellent way to promote improvement. Problem areas are highlighted by measuring lead time and cycle time of the full process and process steps.[clarification needed] One of the main benefits of kanban is to establish an upper limit to work in process inventory to avoid overcapacity. Other systems with similar effect exist, for example CONWIP. A systematic study of various configurations of kanban systems, of which CONWIP is an important special case, can be found in Tayur (1993), among other papers.

A goal of the kanban system is to limit the buildup of excess inventory at any point in production. Limits on the number of items waiting at supply points are established and then reduced as inefficiencies are identified and removed. Whenever a limit is exceeded, this points to an inefficiency that should be addressed.

The system originates from the simplest visual stock replenishment signaling system, an empty box. This was first developed in the UK factories producing Spitfires during the Second World War, and was known as the “two bin system.” In the late 1940s, Toyota started studying supermarkets with the idea of applying shelf-stocking techniques to the factory floor. In a supermarket, customers generally retrieve what they need at the required time—no more, no less. Furthermore, the supermarket stocks only what it expects to sell in a given time, and customers take only what they need, because future supply is assured. This observation led Toyota to view a process as being a customer of one or more preceding processes and to view the preceding processes as a kind of store.

Kanban aligns inventory levels with actual consumption. A signal tells a supplier to produce and deliver a new shipment when a material is consumed. This signal is tracked through the replenishment cycle, bringing visibility to the supplier, consumer, and buyer.

Kanban uses the rate of demand to control the rate of production, passing demand from the end customer up through the chain of customer-store processes. In 1953, Toyota applied this logic in their main plant machine shop.

A key indicator of the success of production scheduling based on demand, pushing, is the ability of the demand-forecast to create such a push. Kanban, by contrast, is part of an approach where the pull comes from demand and products are made to order. Re-supply or production is determined according to customer orders.

In contexts where supply time is lengthy and demand is difficult to forecast, often the best one can do is to respond quickly to observed demand. This situation is exactly what a kanban system accomplishes, in that it is used as a demand signal that immediately travels through the supply chain. This ensures that intermediate stock held in the supply chain are better managed, and are usually smaller. Where the supply response is not quick enough to meet actual demand fluctuations, thereby causing potential lost sales, a stock building may be deemed more appropriate and is achieved by placing more kanban in the system.

Taiichi Ohno stated that to be effective, kanban must follow strict rules of use. Toyota, for example, has six simple rules, and close monitoring of these rules is a never-ending task, thereby ensuring that the kanban does what is required.

Toyota has formulated six rules for the application of kanban:

Kanban cards are a key component of kanban and they signal the need to move materials within a production facility or to move materials from an outside supplier into the production facility. The kanban card is, in effect, a message that signals a depletion of product, parts, or inventory. When received, the kanban triggers replenishment of that product, part, or inventory. Consumption, therefore, drives demand for more production, and the kanban card signals demand for more product—so kanban cards help create a demand-driven system.

It is widely held by proponents of lean production and manufacturing that demand-driven systems lead to faster turnarounds in production and lower inventory levels, helping companies implementing such systems be more competitive.

In the last few years, systems sending kanban signals electronically have become more widespread. While this trend is leading to a reduction in the use of kanban cards in aggregate, it is still common in modern lean production facilities to find the use of kanban cards. In various software systems, kanban is used for signalling demand to suppliers through email notifications. When stock of a particular component is depleted by the quantity assigned on kanban card, a “kanban trigger” is created (which may be manual or automatic), a purchase order is released with predefined quantity for the supplier defined on the card, and the supplier is expected to dispatch material within a specified lead-time.

Kanban cards, in keeping with the principles of kanban, simply convey the need for more materials. A red card lying in an empty parts cart conveys that more parts are needed.

An example of a simple kanban system implementation is a “three-bin system” for the supplied parts, where there is no in-house manufacturing. One bin is on the factory floor (the initial demand point), one bin is in the factory store (the inventory control point), and one bin is at the supplier. The bins usually have a removable card containing the product details and other relevant information, the classic kanban card.

When the bin on the factory floor is empty (because the parts in it were used up in a manufacturing process), the empty bin and its kanban card are returned to the factory store (the inventory control point). The factory store replaces the empty bin on the factory floor with the full bin from the factory store, which also contains a kanban card. The factory store sends the empty bin with its kanban card to the supplier. The supplier’s full product bin, with its kanban card, is delivered to the factory store; the supplier keeps the empty bin. This is the final step in the process. Thus, the process never runs out of product—and could be described as a closed loop, in that it provides the exact amount required, with only one spare bin so there is never oversupply. This ‘spare’ bin allows for uncertainties in supply, use, and transport in the inventory system. A good kanban system calculates just enough kanban cards for each product. Most factories that use kanban use the colored board system (heijunka box).

Many manufacturers have implemented electronic kanban (sometimes referred to as e-kanban) systems. These help to eliminate common problems such as manual entry errors and lost cards. E-kanban systems can be integrated into enterprise resource planning (ERP) systems, enabling real-time demand signaling across the supply chain and improved visibility. Data pulled from E-kanban systems can be used to optimize inventory levels by better tracking supplier lead and replenishment times.

E-kanban is a signaling system that uses a mix of technology to trigger the movement of materials within a manufacturing or production facility. Electronic Kanban differs from traditional kanban in using technology to replace traditional elements like kanban cards with barcodes and electronic messages like email or Electronic data interchange.

A typical electronic kanban system marks inventory with barcodes, which workers scan at various stages of the manufacturing process to signal usage. The scans relay messages to internal/external stores to ensure the restocking of products. Electronic kanban often uses the internet as a method of routing messages to external suppliers and as a means to allow a real-time view of inventory, via a portal, throughout the supply chain.

Organizations like the Ford Motor Company and Bombardier Aerospace have used electronic kanban systems to improve processes. Systems are now widespread from single solutions or bolt on modules to ERP systems.

In a kanban system, adjacent upstream and downstream workstations communicate with each other through their cards, where each container has a kanban associated with it. Economic Order Quantity is important. The
two most important types of kanbans are:

The Kanban philosophy and Task Boards are also used in Agile project management to coordinate tasks in project teams. An online demonstration can be seen in an Agile Simulator.

Implementation of Kanban can be described in the following manner:

Kanban (development)

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Kanban (Japanese 看板, signboard or billboard) is a lean method to manage and improve work across human systems. This approach aims to manage work by balancing demands with available capacity, and by improving the handling of system-level bottlenecks.

Work items are visualized to give participants a view of progress and process, from start to finish—usually via a Kanban board. Work is pulled as capacity permits, rather than work being pushed into the process when requested.

In knowledge work and in software development, the aim is to provide a visual process management system which aids decision-making about what, when, and how much to produce. The underlying Kanban method originated in lean manufacturing, which was inspired by the Toyota Production System. Kanban is commonly used in software development in combination with other methods and frameworks such as Scrum.

David Anderson’s 2010 book, Kanban, describes an evolution of the approach from a 2004 project at Microsoft using a theory of constraints approach and incorporating a drum-buffer-rope (which is comparable to the kanban pull system), to a 2006-2007 project at Corbis in which the kanban method was identified. In 2009, Don Reinertsen published a book on second-generation lean product development which describes the adoption of the kanban system and the use of data collection and an economic model for management decision-making. Another early contribution came from Corey Ladas, whose 2008 book Scrumban suggested that kanban could improve Scrum for software development. Ladas saw Scrumban as the transition from Scrum to Kanban. Jim Benson and Tonianne DeMaria Barry published Personal Kanban, applying Kanban to individuals and small teams, in 2011. In Kanban from the Inside (2014), Mike Burrows explained kanban’s principles, practices and underlying values and related them to earlier theories and models. In Agile Project Management with Kanban (2015), Eric Brechner provides an overview of Kanban in practice at Microsoft and Xbox. Kanban Change Leadership (2015), by Klaus Leopold and Siegfried Kaltenecker, explained the method from the perspective of change management and provided guidance to change initiatives. A condensed guide to the method was published in 2016, incorporating improvements and extensions from the early kanban projects.

The diagram here shows a software development workflow on a Kanban board. Kanban boards, designed for the context in which they are used, vary considerably and may show work item types (“features” and “user stories” here), columns delineating workflow activities, explicit policies, and swimlanes (rows crossing several columns, used for grouping user stories by feature here). The aim is to make the general workflow and the progress of individual items clear to participants and stakeholders.

As described in books on Kanban for software development, the two primary practices of Kanban are:

Four additional general practices of Kanban listed in Essential Kanban Condensed, are:

The Kanban board in the diagram above highlights the first three general practices of Kanban.

Kanban manages workflow directly on the Kanban board. The WIP limits for development steps provide development teams immediate feedback on common workflow issues.

For example on the Kanban board shown above, the “Deployment” step has a WIP limit of five (5) and there are currently five epics shown in that step. No more work items can move into deployment until one or more epics complete that step (moving to “Delivered”). This prevents the “Deployment” step from being overwhelmed. Team members working on “Feature Acceptance” (the previous step) might get stuck because they can’t deploy new epics. They can see why immediately on the board and help with the current epic deployments.

Once the five epics in the “Deployment” step are delivered, the two epics from the “Ready” sub-column of “Feature Acceptance” (the previous step) can be moved to the “Deployment” column. When those two epics are delivered, no other epics can be deployed (assuming no new epics are ready). Now, team members working on deployment are stuck. They can see why immediately and help with feature acceptance.

This workflow control works similarly for every step. Problems are visual and evident immediately, and re-planning can be done continuously. The work management is made possible by limiting work in progress in a way team members can see and track at all times.

Although it is usually used for software development and software teams, the kanban method has been applied to other aspects of knowledge work.. Business functions which have used kanban include: