Designing Kanban Systems
Designing Kanban Systems within Lean Controls and Process Management
In the realm of Lean Six Sigma, the focus on minimizing waste and optimizing efficiency is paramount. Among the numerous tools and methodologies that support this goal, Kanban systems stand out for their simplicity and effectiveness, especially within the subdomain of Lean Control in Process Management. This article delves into the intricacies of designing Kanban systems, offering insights into how they can be tailored to enhance process management and control.
Introduction to Kanban
Kanban is a visual management system that aims to signal the need to move materials within a manufacturing or production process. It originated in the Japanese manufacturing sector, with its roots deeply embedded in the Toyota Production System (TPS). The core principle of Kanban is to manage work by balancing demands with available capacity and improving the handling of system-level bottlenecks.
Principles of Kanban
The design and implementation of a Kanban system are guided by four foundational principles:
Visualize Work: By making the workflow and its various stages visible, team members can better understand the process and identify areas of congestion or waste.
Limit Work in Progress (WIP): Setting limits on the number of tasks or items in each stage of the workflow helps prevent overproduction and focuses efforts on completing existing work before taking on new tasks.
Manage Flow: Monitoring and optimizing the flow of work through the system improves efficiency and reduces cycle times.
Continuous Improvement: Kanban encourages ongoing efforts to improve processes and reduce waste, fostering a culture of efficiency and adaptability.
Designing a Kanban System
Designing an effective Kanban system involves several key steps tailored to the unique requirements of a process or organization:
1. Identify Value Streams
Start by mapping out the value stream for your product or service. This involves identifying each step in your process, from raw materials to finished goods, and understanding how value is added at each stage.
2. Define Work Stages and WIP Limits
Break down the workflow into distinct stages, each with its own specific tasks and responsibilities. Establish clear WIP limits for each stage to ensure that work flows smoothly without bottlenecks.
3. Choose the Right Kanban Signals
Kanban can be implemented using physical cards, electronic signals, or a combination of both. Decide on the signaling mechanism that best fits your environment, ensuring it is easily understood and actionable.
4. Implement Visual Management Tools
Use boards or digital dashboards to display Kanban signals, providing a real-time overview of the workflow. This visibility helps teams quickly identify issues and adjust as needed.
5. Train and Engage the Team
Success with Kanban requires buy-in from all team members. Provide training on the Kanban system, emphasizing its benefits and how it contributes to process improvements. Encourage team members to actively participate in managing the flow of work and identifying opportunities for improvement.
6. Monitor and Optimize
Regularly review the performance of your Kanban system, using metrics such as lead time, cycle time, and throughput to gauge efficiency. Engage the team in discussions about what's working and where adjustments are needed, fostering a culture of continuous improvement.
Formulas 1. Basic Kanban Formula:
D (Demand per unit of time): The average demand for the item in a specified time period.
T (Lead Time): The time it takes to replenish an item after an order is placed.
x (Buffer or Safety Factor): A multiplier to account for variability in demand or lead time.
C (Container Capacity): The number of items a container can hold.
Example: A manufacturing company produces widgets with consistent demand. The company wants to ensure it has enough widgets in process to meet demand without overstocking, using Kanban to maintain an efficient production flow.
From below information, how many Kanban cards or bins do they need?
Demand per unit of time (D): 100 units per day
Lead Time (T): 2 days
Buffer or Safety Factor (x): 20% (0.2)
Container Capacity (C): 50 units
Rounding up, you would need 5 Kanban cards or bins.
2. Extended Kanban Formula with Safety Stock:
DD (Daily Demand): The average number of items demanded per day.
LT (Lead Time): Time from ordering to receiving the item.
SS (Safety Stock): Additional stock to prevent stockouts.
KBS (Kanban Bin Size): The quantity of items a Kanban represents.
Example:
A pharmacy wants to manage its stock of a specific medication effectively, considering daily demand, delivery lead times, and safety stock to ensure availability for patients. From below information, how many Kanban cards or bins do they need?
Daily Demand (DD): 150 units
Lead Time (LT): 3 days
Safety Stock (SS): 50 units
Kanban Bin Size (KBS): 100 units
Calculation: Number of Kanban=80
3. Statistical Approach to Kanban Calculation:
AD (Average Daily Demand): The average demand over a period.
RT (Replenishment Time): Time needed to replenish stock.
SF (Safety Factor, Z factor): Statistical factor for desired confidence level (e.g., 1.645 for 95% confidence).
SD (Demand Standard Deviation): Measures variability in demand.
SCQ (Standard Container Quantity): Quantity per Kanban bin.
Example:
An electronics manufacturer needs to manage parts inventory for assembly lines. The demand for components varies, so they use a statistical approach to determine the number of Kanban cards needed.From below information, how many Kanban cards or bins do they need?
Calculation:Number of Kanban=21
4. Comprehensive Kanban Formula with Safety Stock and Replenishment Intervals:
DD (Daily Demand): Demand per day.
LT (Lead Time): Time to replenish an item.
SS (Safety Stock): Stock kept as a buffer against variability.
SQRT: Square root function.
TB (Time Bucket): The period over which safety stock data is collected.
KB (Kanban Bin Size): Number of items per Kanban.
EPEI (Every Part Every Interval): The replenishment interval from suppliers.
Example:
An automotive parts supplier wants to optimize inventory levels for high-demand items, considering daily demand, lead time, safety stock, and supplier replenishment intervals.From below information, how many Kanban cards or bins do they need?
Daily Demand (DD): 120 units
Lead Time (LT): 4 days
Safety Stock (SS): 100 units
Kanban Bin Size (KB): 60 units
Every Part Every Interval (EPEI): 1 day
Number of Kanban=10
5. Simplified Kanban Formula:
D (Demand per hour): Average hourly demand.
L (Lead Time in hours): Lead time to replenish stock in hours.
S (Safety): Safety stock to account for variability.
C (Container Quantity): Number of items per container.
Example:
A café uses Kanban to manage the stock of coffee beans. They want to ensure a continuous supply without overstocking, considering average demand and delivery lead times.From below information, how many Kanban cards or bins do they need?
Demand per hour (D): 10 units
Lead time in hours (L): 8 hours
Safety (S): 20 units
Container Quantity (C): 40 units
Rounding up, you would need 3 Kanban cards or bins.
6. Kanban Calculation with Constant Factor:
Cont (Contents per Kanban): Quantity of items each Kanban is to cover.
RT (Replenishment Time per Kanban): Time to replenish a Kanban.
AC (Average Consumption): Consumption rate of items.
SF (Safety Factor): Buffer to account for variability.
C (Constant): A fixed number, often set to 1, to ensure at least one Kanban is always in circulation.
Example:
A software development team uses Kanban to manage the deployment of updates. They want to optimize the flow of work items through the deployment pipeline, considering the average consumption of development tasks and the replenishment time for completing these tasks.From below information, how many Kanban cards or bins do they need?
Contents per Kanban (Cont): 30 tasks
Replenishment Time per Kanban (RT): 2 days
Average Consumption (AC): 90 tasks per day
Safety Factor (SF): 10% (0.1)
Constant (C): 1
Rounding up, the development team needs 7 Kanban cards to manage the flow of deployment tasks efficiently, ensuring a smooth and continuous delivery process while accounting for variability in task completion rates.
Conclusion
Designing and implementing a Kanban system is a powerful way to enhance Lean Control in Process Management. By making work visible, limiting WIP, managing flow, and fostering a culture of continuous improvement, organizations can achieve significant gains in efficiency and productivity. As with any Lean Six Sigma tool, the key to success lies in customization and adaptability, ensuring the Kanban system is tailored to meet the unique needs and challenges of the organization.