Kanban System: How to Implement Easily

Do you want to understand what is a Kanban System and the benefits
before and after the implementation?

This is the right page.

Firstly, we are proud to say that is the first multimedia page that will explain to you how to start implementing a Kanban system.

What Is a Kanban System and Why Use It

First of all, let’s see this video with the Kanban definition (plus others).

 

So,

the first important information is that:

KANBAN is not equal to CARDS!

Kanban is a signal and the Kanban Card in a Kanban System can be one of the multiple ways to give the signal!

Now,

if you have not read yet our page on what is lean, I suggest you do it, in particular, the part of Toyota’s house.

If you know look and the Toyota’s house, one of the two pillars is the Just in Time, and the Kanban System is a way to realize the Just in Time.

So,

coming back to the scope of this page:

Question: What is Kanban System?

Answer: A tool to realize one of the 2 pillars of Toyota’s House that is the JUST IN TIME.

Once we have clarified this let’s move to the second questions.

Why Use a Kanban System?

From my personal experience, you can decide to implement a Kanban System when you are facing these 2 kinds of problems:

Problem n°1: Often I have to stop the line because something is missing!

Problem n°2: I have too much inventory of something.

Is it Clear?

Let me explain with an example of the problem n°1.

You are a supervisor of the area of the painting.

When you have to change the color you have to change the nozzles.

When the moment comes…

AAAAAAHHHHHHH!

You have not the nozzle on the shelf, you have to call people, the line is stopped, time runs and money fly.

Sound familiar?

In this case, you should set up a kanban system for consumables.

Then,

one example of the Problem n°2 (excess of inventory).

Typically, a company is not aware of this problem but if you are reading this page perhaps you understood that the excess of the inventory leads to:

1. No Cash for other things
2. Less space to use
3. Is one of the 7 wastes

So,

firstly you should understand which is the right inventory to let the material flow, and then implement a kanban system for inventory management.

Look:

If you have to start with a Kanban System implementation, I strongly suggest finding some SKU where often you have the Problem n°1 (for example SKU 123456 often is missing).

Believe me!

This is the fastest and most useful way to have the buy-in and let understand the company why use a KANBAN.

So,

coming back again to the scope of this page:

Question: Why use a Kanban?

Answer: It is possible to have the material always available with the right inventory in the company.

 

How to Implement a Kanban System

OK … Implementing Kanban …

now we have a problem to solve; the SKU 123456 is often missing, and we lose time and money.

How to solve it with Kanban?

Continue reading, and I will give you a real step by step example.

Rule Zero!

Start with 1 SKU no more.

Right!

Keep it simple!

!!! Important !!!

Basically, we will speak in this example of the simplest case of a withdrawal Kanban between shop floor and warehouse. The other kind of Kanban will be treated in other pages

 

# Step n°1 – Do a 5S with labels and photo!

Imagine SKU 123456, do pictures, put the code with an explicit label.

Make it ordered, make it visual.

See this picture for kanban cards for inventory management.

Look:

I think you understand which kind of component is in the box even if you do not work in this company.

Right!?

 

# Step n°2 – Estimate the daily consumption.

Look,

the word estimate is not casual!

At this stage of the process is not important to be accurate.

Keep it simple!

I do not think you need a Kanban Calculator.

If you a SAP or Oracle or another system do some research then my PURE GOLD suggestion is:

ASK people that work there!

Again,

Keep it simple!

Let’s us guess that from the system you have for SKU 123456 an average of daily consumption of 35 pieces.

Then,

from the interview, you get 40 pieces/day on average.

Keep it simple and consider 60 pieces/day.

Do not worry!

You will have time to improve your Kanban System and inventory.

Firstly, you want not to stop the line again!

Here the table:

 

# Step n°3 – What to use a signal (cards, colors, space, containers or digital)

It is time to chose!

How to decide?

Here the rule is simple and is COMMON SENSE.

Is your first experience? Digital is not the choice!

The SKU is big and heavy? The container is not the choice!

If you have followed me up to know, you should have just 1 SKU under investigation, hence, decide and try.

Decide with common sense and try!

Try!

Do not hesitate! You have only 1 SKU to try.

Try!

 

# Step n° 4 – How to calculate the Kanban Quantity

We did a survey to understand the major problem in Kanban Implementation and on the Top 5 was the Kanban Calculation (Kanban stock to have into the circuit)

Let us start with the Kanban formula:

N° of Kanban = Daily Q.ty * Lead Time [Days] * (1 + SS) / (Q.ty in the container)

Then,

Let’s go into details of each member of the formula:

# N° of Kanban

If we go to Kanban Cards, this number is how many cards we have in the loop between user and supplier.

In the opposite, if we go to Kanban Containers this number is the number of containers we need in the loop.

# Daily Q.ty [pcs used/day]

This is the average number we decided by #Step 2 and in our example is 60 pieces/day.

# Lead Time [Days]

Attention here!

“Lead Time” is the time from the user to give the signal to the moment to be replenished.

Firstly, be conservative of this number and remember the scope of this Kanban Implementation: We have never to stop the line again for this SKU!

Let’s give me an example:

The worker put the Kanban Card in the designated place to give the signal on Monday at 11:00 am

Then, the person accountable to collect the cards pass on Tuesday at 9.00 am. (I will explain better later)

Then, the person collects the SKU from the warehouse and bring it to the user on Wednesday at 11:00 am.

What is the Lead Time here?

Someone could say 2 days, and someone could say 3 days.

The reality is that if this is your first KANBAN experience you have to set to 4-5 days to be safe.

Remember!

We would like not to stop the line again for this SKU.

Then, you will have time to improve the kanban card system for inventory management.

# 1 + SS

SS means Safety Stock and in this formula has to be set in the format of 10% = 0,1 or 15% = 0,15.

Before we go further let’s see the calculation so far:

N° of Kanban = 60 pcs/day * 4 days * (1 + 0,15) / (Q.ty in the container)

Hence,

N° of Kanban = 60 pcs/day * 4 days * (1 + 0,15) / (Q.ty in the container)

N° of Kanban = 276 / (Q.ty in the container)

I hope it is clear far!

Yes?

Let’s go further …

# Q.ty in the container

Here there is another point that sometimes gives a headache!

I do not understand why but they asked me a lot on that.

My suggestion is again –> Common Sense!

If your supplier gives you the SKU 123456 in boxes of 15 stays with this at the beginning!

On the other hand, if the box is of 1000 and your daily consumption is 60 you have to KAIZEN the situation.

As a general rule, I would like to suggest the quantity in the container has to range from around 1/2 day to
3-5 days of consumption at the beginning.

Honestly, it depends on many many factors as the Lead time of replenishment and the nature of the SKU under investigation, but keep it simple, and you will refine later.

So,

if we imagine Q.ty in the container = 15 pcs.

The calculation is:

N° of Kanban = 276 /15 = 18,4 Kanban

The general rule is to round up to 19 but again:

Do not be so precise at the beginning and go for 20 Kanban!

In this example, we agreed for cards –> 20 Kanban Cards!

 

# Step n° 5 – Let’s Start! Who does what?

OK!

Here is where often the problems arise!

Nobody wants to do more job!

Let’s explain the roles in the Kanban systems

and then the sentence I typically use to convince them to start.

# Role 1 – The users

You should have someone who regularly uses the SKU you selected.

Probably you get in touch with him/her during the interview in step 2.

What he/she has to do?

1. Be informed of the upcoming Kanban implementation test
2. Agree with the average daily consumption
3. Inform you if there is any variation in daily consumption
4. Put the signal (cards in this example) in the designated place
5. Participate in the meeting before and after the test

# Role 2 – The waterspider

The waterspider is a Key figure of the Lean Production and will be treated in a separate page.

Now,

To make it simple:

1. Who will collect the cards and will bring to the warehouse? –> The waterspider
2. Who will bring the SKU from the warehouse to the users? –> The waterspider

Materials and information do not walk with their feet!

Do you agree?

So,

the waterspider has to:

1. to collect the signal kanban (cards)
2. bring to the warehouse
3. collect the SKU with the cards stuck on the box
4. bring the SKU to the users
5. re-start the cycle

Pay attention here!

The cycle has to be done with a STANDARD and the keyword here is STANDARD!

Clear?

STANDARD!

 

Firstly, you have to set a standard time for the waterspider to collect the cards and could be every day at 9:00!

Secondly, you have to remember that, according to the example, the waterspider has 4 days to bring the card back to the user, stuck to the box with the SKU they need.

Finally, any variation to the standard has to be highlighted.

# Role 3 – The warehouse

Basically,

the warehouse people have to be informed and involved

Then,

they have to know that once the Kanban Card is given to them, they have to collect the box with the SKU from their shelves and stick the kanban on it.

Finally,

they have to know how many days they can have to this job!

# Role 4 – The KANBAN Lean facilitator

You need someone who organizes and facilitates this cycle at the beginning.

Probably, because you are reading this page, you have some interest in implementing the Kanban System.

Are you a supervisor or a production manager?

 

Could be you a Six Sigma or Lean Engineer to improve the process?

Now,

or if you are directly interested or if you have to improve the process you have to be the reference person for at least 1 month.

Whaaaaaattttt!

Yes,

If you want to be successful, you have to be present and be the reference person for any problem and continuous training.

Believe me!

In the beginning, you will be called 2-3 time a day for problems and support, but at the end of the implementation, you will work much much better!

Your role is also to set meetings to explain why and how.

Kanban Examples

Here in the LeanVlog, you will find a lot of videos with Kanban Examples.

I will list the video below:

1. Kanban at Lean Office
   An application of the Kanban Methodology applied to an office.
   It works for any kind of materials.
   –
2. Kanban Cards at a Bakery
   In this bakery, you can see a lot of Kanban System Examples really applied.
   –
3. Electronic Kanban
   An application made by Amazon.
   –
4. The 3 types of Kanban
   A 7-minute video that explains the difference between the Production,
   Withdrawal and Supplier Kanban

Conclusions

Kanban Meaning = Signal

To implement a Kanban System is not easy at all and it is not about the tools but:

Kanban System = Tools + People

A great way to engage people is explained in our page on Lean Management.

In this page, we tried to give you an easy way to implement.

What is Kanban? –> A tool to realize the just in time

Why use Kanban? –> Because we have a problem (for example SKU 123456 often is missing)

How to Implement Kanban?

Rule Zero = Start with 1 SKU at the beginning.

Then,

1. Do a 5S with Labels and Photo
2. Estimate the Daily Consumption
3. Select the proper signal
4. Calculate the Kanban Quantity
5. Define who does what

Once you have done all these steps, you will have an easier road to Kanban Implementation, and once you have set and understood for one SKU, you will quickly expand to others.

The benefits of Kanban:

for the SKU of this example, you will have:

• Fixed inventory (20 Kanban in the loop)
• People trained and more aware of the goal (do not stop the line for the SKU 123456)
• Everybody knows what to do and when to do.
• 99% you will have no more stock-out on the line for the SKU 123456)

Believe me!

It works!

Then, you could be interested in further reading here:
What is Kanban System explained in 4 simple points.
or
How I created a Lean Kanban System in 8 steps – A proven method.

Finally,

I will be very grateful if you could leave your comment below!