September 20, 2019

Kanban Benefits: 3 of them explained

Do you want to understand the “Kanban Benefits”?

In this post, I will treat just 3 of them but once the Kanban System is implemented you will experience more benefits than expected.

Implementing Kanban has at least 3 benefits.

Kanban Benefits 1 – Permits to reduce stock massively.

Normally we have bottlenecks* in a production process,

and in every bottleneck, we have stock that must be processed.

Using Kanban, our stock before the machines are reduced to one or two lots,

depending on the processing speed.

These lots are produced according to kanban maximum or minimum quantity.

* To make it simple the bottleneck is the slowest operation in the manufacturing process.

Benefits of Kanban

Let me explain with an example:

Imagine you have a machine that can process 1 piece every 10 minutes.

Theoretically, in 8 hours of work, you can produce 48 pieces if everything goes smoothly.

Typically, if the machine is the bottleneck it is considered critical,

and everybody wants to PUSH material there to avoid the machine stops.

As a result, you could have 200 pieces or more in a queue, waiting to be processed.

Now,

If you start with a Kanban System between the “bottleneck machine” and “supplier” you could set for example a maximum level of 100 pieces (that is more than 2 days of work!).

Only when the supplier has the “Kanban” (alias the signal) can produce and move parts to the “bottleneck machine.”

In other words, the inventory is fixed and limited to 100 pieces.

To calculate the right number of Kanban Cards you can search for Kanban Software free.

Kanban Benefits 2 – Permits to have visual control of production

Semaphor

We can see immediately if we have enough stock or not produce.

Then, according to the colored code, you will have a great Kanban Scheduling,

we know if we are short of stock.

What we typically use is the color code:

Red

Yellow

Green

If we are in the red area, you are in a short of stock.

Then, if we are in the yellow area, you are in a safe zone.

Finally, if you are in the green area you are OK, but you have not to overcome the maximum limit.

Coming back to the example we are using to explain the benefits of Kanban, let us imagine:

Maximum Level at bottleneck = 100 pieces

Minimum Level at bottleneck = 50 pieces

I will set the color this way:

Red = 0-50 pieces

Yellow = 51 – 75 pieces

Green = 76 – 100 pieces

In other words, I always want between 1 and 2 days of production, and if I go under 1 day, I see the red and I have to react and ask why.

Let us go now the last of the benefits of Kanban described here.

Kanban Benefits 3 – Limits overproduction (1 of the 7 wastes)

Kanban permits to stop producing, as no parts will be processed unless there is a kanban signal upstream requesting so.

This reduces a typical mass production waste that is overproduction.

Again to the example.

If at the “bottleneck machine” we are in the green area (for example 80 pieces) this means that the supplier should have in its hand 20 “kanban cards”.

This means that the supplier can produce only 20 pieces … no more!

This lead to reduce to zero the overproduction.

One video on the rules for Kanban

We produced a video that explains the 8 rules you have to follow for a successful Kanban System.

Conclusions

In this post, we highlighted the benefits of Kanban.

The real benefits are more than the 3 described here,

but you will experience it only after implementation.

To make it simple, the major 3 kanban benefits are:

  • 1 – Kanban permits to reduce stock massively.
  • 2 – Kanban permits to have visual control of production
  • 3 – Kanban limits overproduction (1 of the 7 wastes)

Read our post on Kanban System to understand how to implement.

See this Kanban Video that explains the 3 types of Kanban.

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