What is Kanban?
With the help of the process management tool kanban, production may be managed from customer orders all the way back to the warehouse. Additionally, it offers a visual depiction of each job’s state as it appears on a company’s radar. The kanban system, which is commonly managed digitally in today’s world, offers a very open and transparent method of communicating the status of a project with the wider team. This method enables everyone on the team to always see where something is, who was most recently working on the task, and where it needs to go next. Kanban was developed by Toyota, the same company that was responsible for the broader principles of lean manufacturing. The basis of Toyota’s initial iteration of their system was kanban cards, which each department within the corporation would hand to their counterparts in order to communicate the demands of one department to another. After some time, this developed into the use of sticky notes on a board that displayed the entirety of a project at once. This eventually gave way to the use of virtual boards. However, physical cards can be used, and in many cases they still are. Before we dive into the examples of companies using kanban system, we need to know how does the kanban system work.
How does the Kanban system work?
Everyone has their own take on what a Kanban board should look like, but here are some guidelines for using Kanban that you could consider the “basics”:
- The columns on the Kanban board are used to keep track of the various stages of a project, such as “Requested,” “In Progress,” and “Done.”
- Each project is broken down into its constituent tasks, which are then entered into the Requested column in the form of “cards.” Each card stands for one individual piece of work. In the manufacturing industry, one card is typically equivalent to one order from a customer.
- The task is moved into the “In Progress” column as soon as a customer places an order for a product and it is put into production. Typically, the person’s name is also added to the card.
- As the task progresses, additional notes are added in order to communicate the current status of the task. If an online Kanban system is being used, screenshots, documentation, and other technical resources can be attached. The card can contain virtually all of the information that an individual ought to know regarding a task.
- When a task is finished, it is moved into the Done column after the column is updated. The order placed by the customer has been fulfilled.
Why Do Organizations Use Kanban?
Kanban is a framework for Agile development that offers a visual method for handling project management. It was first implemented by Toyota in Japan in the 1940s as a means of enhancing the company’s production procedures. Since that time, Kanban has developed to become applicable to a wide variety of projects and industries. To answer that question, why do companies use Kanban? The following are five reasons that contribute to the popularity of the methodology.
The heart of the Kanban system is the Kanban board. This board allows users to visualise the tasks associated with a project as cards that move through three columns labelled “To Do,” “Work in Progress,” and “Done.” Everyone on the team is able to get a quick glance at how far along the project is thanks to the Kanban board. By visualising the process, you will be able to identify areas of inefficiency and resolve problems as they arise.
Your team will be able to concentrate on the tasks at hand and become more productive as a result of your efforts to eradicate inefficiencies. Cycle time, or the amount of time it takes for a task to move through a process, and throughput are the two metrics that Kanban uses to evaluate productivity (the number of tasks completed in a certain period). If your team is able to move tasks through the process more quickly, then you will be able to finish more tasks.
Kanban is a type of Agile methodology that provides teams with the ability to respond rapidly to change, whether that change is brought about by new developments in your organisation or by new customer requirements. The Kanban board is a versatile instrument, as the cards on it can be moved around easily to accommodate varying deliverables, revised due dates, and reorganised resource allocations. Instead of adhering to a predetermined plan, members of the team are free to determine for themselves the most effective way to finish the project.
Better workload management
Limiting the quantity of work that is now being done is one of the most crucial Kanban principles. This ensures that there is neither an excessive nor an insufficient amount of work. This is accomplished through the utilisation of a system known as the “pull system,” in which additional work is “pulled” into the system only when the group has the capacity to deal with it. The members of the team do not need to deal with a number of tasks at the same time, which enables them to concentrate on the work at hand.
Kanban places an emphasis on never stopping to get better. Collaboration and innovative thinking are encouraged, but only under the condition that the team is able to reach a consensus on how to approach their work and how to handle any problems that may crop up. You can maximise the value you provide to both your customers and your employees by continually working to improve your workflows and processes.
Now, let’s take a look at how some of the world’s largest companies have successfully integrated Kanban into their day-to-day operations as well as their management culture:
8 Examples of Companies That Use Kanban System
Pixar is one of the examples of companies that uses kanban system. Pixar received a lot of influence from the original Kanban system used by the Toyota Production System. Except that the process, as it was carried out by Pixar, involved activities that were significantly more creative. It was extremely important for Edwin Catmull, the President of Pixar Animation Studios, to ensure that each film was created in the appropriate order. Which meant that once a process was finished, it was handed off to the following team, who would then hand it off to the team after them, and so on and so forth. In order to accomplish this goal, a Kanban board of an advanced level was utilised. Additionally, it provided a significant amount of visibility to all of the teams that were involved regarding what each person was doing at any given point in the process. In addition to this, it brought to their attention the impact that their work had on the other members of the team. Catmull was able to implement lean manufacturing techniques within his organisation as a result of this, as well as establish a culture in which anyone could “pull the cord” and “stop the line,” as he describes in his book entitled Creativity, Inc.
The adoption of Kanban was one of the most advantageous choices that could have been made by Spotify, the most successful subscription streaming music platform. After having a difficult time finding time to carry out their planned projects, Spotify decided to implement Kanban. The methodology utilised by Spotify was based on the straightforward implementation of a Kanban board that featured three horizontal columns labelled “To do,” “Doing,” and “Done.” There are also two horizontal lanes with tasks that are more hands-on, such as planning the migration of servers or designing databases, for example. The work that Spotify does can be broken down into three distinct categories. The size of these positions ranges from small to medium to large. It would take one day to finish a small job, a few days to finish a medium job, and one week to finish a large job. The Kanban board was seamlessly integrated with the smaller tasks, medium tasks, and large tasks that were created from the larger assignments. This helped ensure that all tasks, both tangible and intangible, were completed successfully.
Kanban methods have been put through their paces at Zara, the most successful clothing retailer in the world, for a number of years. Zara constantly updated its clothing collections and maintained low stock levels in order to remain competitive in the fashion industry. The store floor is where the operation of Kanban systems takes place. Kanbans are the responsibility of each company’s sales managers. In accordance with the most recent sales information, orders are transmitted to the headquarters twice every week. In addition, the items that have proven to be the most popular with repeat buyers are included on the list. These products are in high demand. The order is processed by the commercial team, who does so while keeping in mind the most current fashion trends. The order is updated with new clothing styles, and then it is processed and delivered to the retail location in just two business days.
Nike is renowned for having embraced a lean manufacturing strategy in reaction to negative press over the subpar working conditions in their factories. This is one of the company’s most famous achievements. To get started with this strategy, the leadership at Nike first went on a tour of their own factories and questioned employees to find out how they could most effectively address some of the most pressing concerns. They ultimately made the decision to try to standardise demand in order to stabilise the job, which necessitated cancelling past-due orders and avoiding abrupt changes in the material. This was done in order to achieve the desired results. Additionally, in an effort to reduce waste, they launched a programme called Nike Grind, which recycles materials from defunct products and turns them into surfaces that athletes can train on.
Although Toyota is typically mentioned when discussing Kanban, other automakers have also been interested in it since its start. One of these was Jaguar, which had the objective of significantly reducing the amount of time needed to bring newly designed products to market. Because of the new Kanban board, the organisation was able to make some necessary adjustments. Notably, Jaguar was having problems receiving feedback on designs and design concepts, with the company receiving feedback taking up to a year’s worth of time at times. This feedback loop was reduced from weeks to days as a result of switching to the concept of a minimum viable product (which involved only providing stakeholders with the information they required to make a decision, and nothing more) and reducing batch sizes through the use of Kanban. As it became clear that the Kanban system was going to be very beneficial for Jaguar, the design teams began making it the primary focus of their daily standup meetings. As a result of reducing delivery times while simultaneously improving product quality, Jaguar is now recognised as a true leader in lean manufacturing. Because it has been so successful, the group now gives tours of its plant in Halewood to visitors from other companies to demonstrate to them how they can profit from implementing lean manufacturing principles.
NextPhase Medical Devices was formerly known by its previous name, Phase 2, and it is a company that produces medical equipment. Following the successful execution of a number of business initiatives, the company discovered that it was in a precarious position; it did not have sufficient warehouse space to meet the growing demand for its products. The company’s leadership team came to the conclusion that the challenge was to satisfy customer demand without increasing the amount of available inventory space. The company decided to concentrate on improving workflows rather than signing a lease for a larger warehouse. However, the guidance that the team was receiving from their ERP system was suggesting that working in larger batches was preferable to working in smaller ones. This went against the advice that the team was receiving. NextPhase needed to find a middle ground between the preference of their ERP system for large batches and the continuous small-batch workflow that Kanban provides. They began holding a series of daily standups, during which the team would meet with a supply chain associate who could provide advice on the appropriate order placement for the work that needed to be done. This resulted in a 33% reduction in the storage requirements for NextPhase.
7. Seattle Children’s Hospital
Consumables shortages were causing staff at Seattle Children’s Hospital (SCH) to hide stockpiles of the items they needed on a day-to-day basis in order to ensure they would always have a supply. This is a problem that can be related to by any manufacturing company, despite the fact that hospitals may not seem immediately relevant to manufacturing. Because of this, there were a lot of issues with the inventory and wasted time as a result. As a result, SCH decided to implement Kanban’s two-bin system. After inventory managers had determined what optimal stock levels should look like based on real-world data collected over the course of a year’s worth of operations, they put the two bins into use. When the first bin is empty, it can be transported to the central supply office, where it will be inspected, and new supplies will be requested. In addition, to further ensure that the process is open and accessible to all parties involved, the Kanban board is made visible to employees at all times so that they are always aware of the state of their own supply chain. SHC discovered that they could reduce the size of their storage room and save money in the process. This is because perishable goods would no longer go bad and staff would no longer be held up due to a lack of consumables. The Kanban two-bin system was successfully implemented at Seattle Children’s Hospital in order to combat the issue of consumables running out before they could be used.
8. Dynisco’s inventory reduction using Kanban
Plastics extruder and sensor manufacturer Dynisco was experiencing difficulties with its inventory carrying costs and its lead times. The company went through several stages in order to address these issues. To begin, it put into practise industry-standard procedures for design for manufacturing and assembly. This enabled it to simplify new product designs and standardise costs, both of which are essential first steps on the path to implementing Kanban. The next step was to implement a manual Kanban system, which not only improved customer response times but also helped organise the flow of materials through their production process. Despite this, the company continued to hold an excessive amount of stock. Therefore, the third phase of this project consisted of automating their Kanban system. This began to provide the leaders of Dynisco with real-time data regarding their suppliers and inventories, and it easily integrated with the company’s already-in-place CRM and ERP systems. Dynisco was able to cut its active inventory across all of its facilities by forty percent thanks to the combination of three factors: the simplification and standardisation of processes, the uninterrupted flow of materials, and the rapid flow of data.
It is not an easy task to manage the day-to-day operations of a company or organisation. However, if it is approached in the appropriate manner and the appropriate tools are utilised, it is not rocket science either. Even the most basic implementation of Kanban can have a significant positive effect, as demonstrated by the examples provided previously. This translates to increasing the efficacy and productivity of an organisation, no matter how small or large it may be! Kanban should be the next logical step for any company that is struggling to bring in more transparency in their daily operations and get more visibility into what their teams are doing every day. This should be the case for any company that is currently using a system that is not Kanban. The examples show that businesses that use Kanban software have a better flow of executing jobs, which helps to solve problems and increases productivity. One advantage of using this programme is this. This is because it helps set expectations for what has to be done next and who will be in charge of carrying it out. Having the appropriate tools is also very important. Kanban enables every step of a process to be tracked, from the beginning to the end, using digital boards that bring transparency into processes, thereby making them more manageable and ensuring that teams remain focused on the most important tasks.
Lean tool of “Kanban” embraced at Pixar, Zara and Spotify !! (n.d.) Retrieved January 26, 2023, from https://www.linkedin.com/pulse/lean-tool-kanban-embraced-pixar-zara-spotify-dennis-lean-six-sigma
How (and why) Kanban is used by these 3 top companies | Blog | Boombirds – Industry agnostic workflow management software. (n.d.). How (and Why) Kanban Is Used by These 3 Top Companies | Blog | Boombirds – Industry Agnostic Workflow Management Software. Retrieved January 26, 2023, from https://boombirds.com/blog/tips-tricks/how-and-why-kanban-is-used-by-these-3-top-companies/
Why Do Organizations Use Kanban? | Wrike Kanban Guide. (n.d.). Why Do Organizations Use Kanban? | Wrike Kanban Guide. Retrieved January 26, 2023, from https://www.wrike.com/kanban-guide/faq/why-do-organizations-use-kanban/
Bland, A. (2022, March 3). 8 Examples of Kanban in Lean Manufacturing. Unleashed Software. Retrieved January 26, 2023, from https://www.unleashedsoftware.com/blog/8-examples-of-kanban-in-lean-manufacturing