Using Kanban to Improve Your Workflow

There are two ways to move parts along the production line in your manufacturing process. You can either push them or pull them. In the push method, you approximate your customers’ demands and the associated production required to meet those demands. While you can rely on historical and seasonal records about previous demands, one problem remains: Demands change.


Changing demands typically mean you either have a warehouse full of inventory because demand dropped unexpectedly or you have angry customers who aren’t getting their widgets because demand exceeded your expectations. The first scenario leads to cash tied up in inventory, large lots and a negative impact on your bottom line. The second leads to a scramble to fill orders, increased waste caused by attempts to expedite production, management by “putting out fires,” overall inefficiency and lost sales because you couldn’t fill the orders.


With the pull manufacturing approach, on the other hand, you allow consumption and demand to drive production. Of course, you have to have the right system in place to monitor consumption and demand. Enter Kanban – a Japanese term that translates to “visual card.” It works on the basis of requesting a restock of inventory from the preceding workstation or any workstation earlier in the process in order to continually fill demand.


On a grand scale, the store notifies the distribution center every time an item is sold, and in turn, the distribution center notifies the manufacturer who produces what’s needed to replenish the item that was sold. It’s supply chain 101, and Wal-Mart has perfected it.


On a simpler scale, let’s take widgets as an example. A finished widget requires a base, a gizmo, and a thingamabob. A gizmo is attached to the base and subsequently, the thingamabob is attached to the gizmo. When workers deplete their supplies of thingamabobs and gizmos and reach the prescribed reorder quantity, they send Kanban cards to the thingamabob and gizmo manufacturers requesting more.


Originally, the Kanban system used by Toyota employed red, physical cards to communicate depleted materials. A red card indicated a need for more parts. Another approach was to return empty pallets or bins as an indicator of depleted parts. And of course, in the digital age, there are numerous software applications that convey the same information and need for parts to meet just-in-time (JIT) demand.


No matter how the message for more parts is sent, there are rules to abide by in order to ensure the system works correctly:

  • No part may be withdrawn without a Kanban indicator (red card, empty bin or electronic request).
  • The subsequent (or downstream) process removes only the exact quantity needed.
  • The preceding (or upstream) process replenishes only the inventory that was removed.
  • Defective parts are never sent downstream.

 

In addition to reducing work-in-process inventory, the Kanban system makes bottlenecks more evident. When known, you can take the steps needed to reduce or eliminate these problems in your workflow. Additionally, with minimal inventory, you are well-positioned to make changes to meet changing customer demands. Using push manufacturing, you might have a warehouse full of widgets with gizmos and thingamabobs when your customers decide that widgets with doodads suit their needs better. Now what? You may lose those customers to a competitor or end up with a “fire sale” on the obsolete widgets.

Kanban is a tool for J.I.T methodology. Whether you implement an old-fashioned card system or adopt the latest technology, contact MPower to learn how we can provide the information you need to implement successfully.