Every business suffers commitment issue whether it be in manufacturing or service sector. This leads to loss of customer and also the company reputation. The Kanban System is an Agile or Lean tool which helps every type of business to improve and maintain their workflow and meet customer demands on time.

In this article, you are going to learn about the fundamental principles of Kanban System. You will also learn about the Kanban Boards used by different types of businesses and the benefits of adapting kanban system in your industry.

Kanban 

The Kanban system is defined as the visual system of scheduling and managing the tasks. It is used as a lean manufacturing and agile development tool for real-time communication and full transparency of work. Moreover, it is a part of the Kaizen that can lead to higher productivity rate and increased profit. 

In other words, the Kanban system can be defined as a traffic signal that manages the flow of traffic and meets the real-time needs of customers by sending clear signals on when to start, slow down, and stop production. The only difference is that each Kanban signal carries valuable information about the volume and sequencing of the production.

History

During the 1940s, Taiichi Ohno an industrial designer at Toyota found out that the store clerks of a supermarket restocked a grocery item from their store's inventory. He also found out that the clerks only ordered their supplier when an item was near to sellout. This sparked Taiichi Ohna to rethink their method of inventory management and meet the customer demands on time. Thus, leading to the foundation of the Kanbansystem.  

The term Kanban is a Japanese word that means “card you can see”. The automotive company Toyota used these cards attached to different supply containers to communicate what materials in the production line are needed. The result is an efficient system where products are only refilled when they are consumed further downstream in the process.

The success of the Kanban system in manufacturing sector led to its implementation in software development sector. It was David J. Anderson, Jim Benson, and Corey Ladas who first applied this concept to IT, Software development and knowledge work in general in the year 2004.

Principles of Kanban

The Kanban system was created as a simple planning system that aims to control and manage the workflow and inventory at every stage of production in the most desired way. There are four fundamental principles of the Kanban System.

1. Visualize workflow

The first principle of implementing and implementing the Kanban system is to visualize the workflow. It is accomplished by creating a visual model of your workflow and processes. The visualization process can either be performed on a physical board or an electronic Kanban Board. Also, for better visualization different color sticky notes and cards are used for physical & electronic board respectively. The first principle help you to:-  

• Visualize the current workflow that you and your team are doing.

• Check blockers, bottlenecks, and queues.

• Signify different classes of service.

• Simplify different type of work items. 

• Increase communication and collaboration among the team.

2. Limit WIP

The second fundamental principle of the Kanban System is to limit Work in Progress. It is also known as the 'Pull System' that balances the workflow so that the team don't start and commit to too much work at once. Thus, work currently in progress must be completed and marked done before pulling a new work. The second principle help you to:-

• Reduce the time taken by an item to travel from inventory to product.

• Avoid problems caused by the switching of tasks.

• Reduce the need to constantly reprioritize items.

• Encourage the team to complete work at hand first before taking up new work. 

• Finish what you are doing before taking up new stuff.

• Communicate your capacity of doing work to your customer and stakeholders.

Of course, at the initial stages of the kanban system, it won't be easy to decide the WIP limits. In fact, Don Reinertsen suggests that one can start with no WIP limits and define it for each stage of workflow observe the sufficient data collected from the initial work in progress. However, many teams start with a WIP Limit of 1 to 1.5 times the number of people working in a specific stage.

3. Enhance\ Manage Flow 

Managing and enhancing the flow is the most important principle of the Kanban system. With the help of above two principles, you can optimize your Kanban system to manage and enhance the flow of work by highlighting the various stages of the workflow and the status of work in each stage. You can collect metrics to analyze flow, and achieve the following: -

• Resolve and eliminate bottlenecks at the intermediate wait stages (the intermediate Done stages).

• Reduce the time spent in the wait stages which leads to reduced Cycle Time.

• Leading indicators of future problems by analyzing the flow of work.

• Delivery of work becomes smoother and more predictable.

• Helps you to make reliable commitments to your customer as work becomes more predictable.

4. Continuous Improvement

Whether it be the 5S system or the Kanban system, continuous improvement is the cornerstone of the culture. In fact, the main goal of implementing Lean manufacturing / Agile development program is to evaluate your process constantly and improve continuously as required and as possible.

Kanban systems help you to measure the team and work effectiveness by tracking the workflow, quality, output, lead times and more of your system’s performance data. This can be accomplished either using a physical board or an electronic board such as SwiftKanban. These data and the metrics can be used to evaluate whether your performance is improving or dropping and decide whether to keep it or try something else.

Implementing the Kanban System

Many believe that the implementation of the Kanban System requires a Kanban board with columns. Of course, it can be implemented any time and at any part of the organization but one must remember these two points while implementing the kanban system or else it won't be a successful implementation.

1. Begin with small changes

The Kanban system is about improving and managing the existing setup or process rather than completely changing it right away. Any required changes can be done gradually over a period of time and at a pace that the team is comfortable with. In fact, the Kanban system aims at making small incremental changes rather than sudden big changes that might lead to resistance within the team and organization.

2. Encourage and respect current roles/responsibilities 

Do not make any changes to the existing roles and functions of your team which is performing well. The team itself will identify and implement any changes when needed. Always encourage continuous improvement at each level of the organization. In fact, people at each level can provide ideas and show leadership to implement changes to continually improve the way they deliver their products and services.

Kanban Board

The implementation procedure of the Kanban system is achieved by using a Kanban Board. It is a visualization tool that helps you to manage your work and improve predictability, quality, and time-to-market performance. Depending on the industry requirement the Kanban board can either be physical or electronic. Many businesses use a physical kanban board at the time of implementing the kanban system. However, an electronic kanban board is better as it uses electronic cards instead of sticky notes and can be manipulated easily. 

Simple Kanban Board

Initially, to keep things simple, you can have only a few columns to manage all your work. You can later redesign the board later as per your requirements. A simple kanban board consists of four columns namely backlogs, To Do, Ongoing & Done.

1. Backlog

This is the first column of a simple kanban board. The backlog column consists of all the tasks that are to be done by the business in coming future. In other words, it consists of all the work orders registered to the company.

2. To Do

This is the second column of the simple kanban board. The To Do column consists of all the tasks which are not yet started but are next up. These tasks are arranged as per the commitments made to the customer. 

3. Doing

This is the third column of the simple kanban board. The doing column consists of all the ongoing tasks. You can have multiple 'Doing' columns for all the stages of your workflow for better transparency and communications.

4. Done

This is the last column of the Kanban board. The done column consists of all the completed tasks. This column can be placed multiple times based on the number of stages in your workflow. The final done column can be highlighted uniquely.

** When something is finished, the next highest thing from the backlog is pulled into play **

Kanban Board for different Industries

The origin of the kanban system might be a manufacturing industry but nowadays it is used by every industry irrespective of their domain. In fact, the kanban system is also used for personal tasks management nowadays. Below are the few Kanban boards used by different types of industries.

1. Software Development Industry

It was Microsoft Corporation who used the Kanban system for software development in 2004. Since then every software company has started using it. The classical software development Kanban board consists of six columns namely backlog, To Do, Development, Testing, Deployment and Done. The two columns Development and Testing are further divided into two more columns namely Ongoing & Done. 

2. Recruitment Industry

Every recruitment company uses a Kanban board to make their recruitment procedure easy and transparent. The recruitment Kanban board consists of five columns namely Backlog, To Do, Face to Face, Technical Test and Offer accepted. Also, Face to Face and Technical test are further divided into two more columns namely Ongoing & Done.

3. Sales Industry

The Kanban board plays a very important role in the sales industry as watching over thousands of lead is a difficult job. The basic sales Kanban Board consists of four columns namely leads, Initial Communication, Negotiations and Closed. The initial communication column is further divided into interested and not interested lead columns.

Benefits of the Kanban System

The Kanban system is an evolutionary improvement process. It helps your organization to learn and grow continuously. There are several other benefits of implementing the Kanban system. 

It

• reduces the cycle time which in turn increases productivity.

• helps you implement small changes and improve gradually at a pace that your team can handle easily.

• increases the organization's responsiveness to change.

• also leads to continuous collaboration and active learning.

• helps you the prioritize the work to fulfill customer commitments.

• also balances demand against output so that most the customer-centric features are always being worked.

• eliminates Overproduction.

• reduces the risk of Inventory Obsolescence(Out of date).

• enhances quality control and self-discipline.

• helps to eliminate waste, streamline workflow, and reduce overhead.

• helps you to identify the potential bottlenecks and blockers in your processing system

• empowers the team to make more agile decisions that move projects forward with innovation and efficiency.

• helps team members and projects to move seamlessly across functions due to its versatility.

• also reduces waste and removes activities that don't add any value to the team/organization.

• improves the chances of having more motivated, empowered and higher-performing team members with the help of rapid feedback loops.