What is Kanban System? Kanban system examples

How do you control the expenses and your monthly groceries need at your home. Is it simple or complex? Do you need a control system in place to avoid extra groceries and at the same time shop only the requested and required groceries from the market? How do you manage the inventories at home and work? If you want to know more than you are reading the right blog.

You first do the calculation in your mind about all the things mentioned above to save cost and optimize inventories at home and ensure the home is suitable for living with eating food, cleaning utensils, washing clothes and cleaning the rooms, etc. This is not easy when you are entrusted this for the first time, it takes enormous practice and hard work to do this. Think about similar situations in the manufacturing plant or software industries. You need to save costs, save time, and reduce wastes. 

This is where the Kanban system comes into the picture. It is the methodology to control and optimize the inventory, save time, save costs, and reduce waste. To explore more, register for the Kanban training at StarAgile click on the link.

What is Kanban

Kanban is the Just in time methodology for the inventory management and supply chain management to save costs and time by way of considering the entire processes of getting the customer order to the products or services delivery and collecting the cash.

The Kanban is the system developed by a Japanese Industrial Engineer named Taiichi Ohno in the organization called Toyota to improve the efficiency of the processes. This system is applicable for the entire supply chain and all the processes of the organization from the start that is when the raw material is procured to finished goods or services when the goods or services are sent to the customer.

For example -When you go to a supermarket for the purchases you purchase for a single month or single week and then supermarket records the sales and then replenish the goods in the supermarket so that it is ready for the next supplies.

In this, each process is dependent on the predecessor processes for raw materials or semi-finished goods.

Kanban system ensures you have just sufficient inventory for the next processes and it replenishes the supply just in time to ensure that the processes are smooth. That is there is no overstocking or understocking of goods; it happens automatically through the pull systems of Kanban. That is there is no over inventory which is the waste of money and there is no need for under inventory which stops the production. Through the Kanban system, the inventory is kept at the optimum level. StarAgile provides Kanban system Design 1 (KMP1 certification) to the candidates who want to learn the fundamentals of the Kanban system.

Kanban system examples

1. Kanban cards

 The Kanban system was developed even before computers came into the picture. So the natural way to do so is by the way of using the Cards. Each card system had the specification of sequence and quantities. 

The system was to change the processes from the traditional push to the pull system where the cards would demand the quantities from the predecessor processes in a controlled and sequential way. So the pull system of Kanban cards was used. Getting the right balance is a must for the Kanban so that overstocking or limit of understocking where specified. 

There were rules laid downed by the Taiichi Ohno for the Kanban system to be effective and efficient.

The rules are as follows,

• Kanban cards pull system would determine the processes to issue the raw materials or semi-finished goods or the goods itself. 
• Without the Kanban cards, there will be no supply or order of any items
• Kanban Cards will indicate both the quantity and sequence.
• To address the quality control the goods will not pass if there are defects in the goods or services.
• For the goods or items to go from one processes to another they must have Kanban
• The processes are demand sensitive and efficient if there are fewer Kanban cards

The Kanban Management Professional certification (KMP certification) can be obtained from the StarAgile institute that is a reputed institute offering KMP 1 and KMP 2 certifications.

2. Computers

The cards were used in the 1940's and later at the end of the 20th century, the cards gave way to the flash system in the computers in various ERP and Inventory Management package.

Instead of cards, the reminder would be sent through the computer to the preceding processes in the way of reminder to replenish the stocks in exact sequence and quantities. This made the Kanban system much easier and made way from the rigmarole of using physical cards.

For example - This is successfully used by Wal-Mart a retail giant company in the USA. Whenever the stocks in the retail supermarket get supplied to the customers there is a direct indication to the company to replenish the stock again, thus immediately the socks get added to the retail supermarket store. Everything is calculated based on the lead time, quantity of purchase, the type of purchase, and transportation time.

3. Digital Kanban

The processes of the Kanban system are as follows, there are 3 bins of Kanban cards 1 is on the factory floor and 2 in the store, and the third bin with the suppliers. The red cards indicate the need for the supply, so the production floor uses up all the red cards and then supply the empty bin to the stores. The stores replenish the materials and issues Kanban cards to the production floor. Now the stock is empty the empty bin is then moved to the suppliers who issue the spare parts and the raw materials and then move the cards to the stocks. Remember there is only 1 empty bin which gets transported to various departments.

The piece of cards is transported which makes way for errors and the cards may be lost or spoiled or there will be missing information and it may cause a large scale production to stop abruptly. Then came the Electronic Kanban system. 

Now there is no need for physical cards or a piece of paper no more missing information or reminder to act on. Everything is done in the system automatically with the click of a button and the simple processes. 

For Example, these types of systems are followed in Ford Motor Company and Bombardier Aerospace. To understand more on the live examples register for the Kanban course with StarAgile institute

What is Kanban Process

The simple process of making a Kanban system is very easy to do and is shown in the steps below,

1. Step 1: Create the Kanban system in the whiteboard by dividing the board into the three columns

2. Step 2: Now create the "To Do" list on the left side of the column in the form of post-it notes or sticky notes.

3. Step 3: Move the worked items from left to the right side of the columns

4. Step 4: When you require more work then add it to the "To Do" list

5. Step 5: Keep repeating the steps until all the works for the day are completed.

6. Step 6: Add more items on the "To Do" list every day and as you work keep the items moving to the right columns. The steps are as shown in the diagram below for the SDLC scenario,

The above example shows how easy it is to work on the real-time scenarios and for more examples connect with StarAgile’s Kanban training online.

Also Read: Kanban Inventory Management

Conclusion – Benefits of Kanban

The benefits of Kanban are as follows,

• Greater Predictability
• Enhanced Collaboration
• Enhanced company culture
• Reduction in Waste
• Greater Flexibility
• Greater Visibility
• Enhanced productivity
• Increase in Efficiency
• Enhanced Team Focus
• Smooth processes and no team overburden

Finally, we recommend you to go for the 2 courses in Kanban certifications offered by StarAgile as Kanban Management Professional 1 and Kanban Management professional 2. Both the courses are available online and training is provided by experienced consultants with industrial experiences and industry certifications.