Kanban is a Japanese word that literally means “visual card”. Kanban cards were originally used in Toyota to limit the amount of inventory tied up in “work in progress” on a manufacturing floor. Kanban not only reduces excess inventory waste, but also the time spent in producing it. In addition, all of the resources and time freed by the implementation of a Kanban system can be used for future expansions or new opportunities. The original author of Kanban was Taiichi Ohno.
Kanban term came into existence using the flavors of “visual card,” “signboard,” or “billboard”, “signaling system” to indicate a workflow that limits Work In Progress (WIP). Kanban has been used in Lean Production for over `half-century.
The core concept of Kanban includes −
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.
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.
This concept of Kanban is a direct implementation of a Lean Pull Scheduling System. An item can move to the next segment / state only when it obtains a slot in there.
The implementation of Kanban, as well as other Lean Manufacturing Methods, such as Kaizen, can have significant benefits for almost any type of work. Kanban is more effective because it visually indicates when the production should start and stop. It is faster, more efficient, and saves significant money over most other production models. It is also far more directly responsive to customer demand.
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.
In agile, if values are combined with Kanban characteristics, the outcome would be Agile Kanban. This practice is gaining popularity in Software Development wherein the Agile iteration approach and Kanban value stream focus are combined.