What is KANBAN? - Part 1.

When you ask what KANBAN is, most people would answer that it is a board with only ballots or an IT board / "dashboard" which shows the status of the realization of tasks. If the Toyota that developed it used it that way, it would never be the most efficient company in the world. However, KANBAN are leaflets, but also much more than leaflets and plates. If we are going to split the plate, then the question is whether it is more correct to call the plate ANDON than KANBAN plate.

Anyway, let's not get stuck in the form and names, which is more or less irrelevant, let's return to the essence of what KANBAN is. Purpose The KANBAN system achieves "Just In Time" production / delivery of a product or service. This means that the amount of stock (backlog) before, during and after the production and / or delivery of the service is minimal. "Just In Time" in free translation means the required product or service in the required quantity in the required time interval. To achieve this, three prerequisites are required:

(1) Standardize products and / or services

(2) standardization of the duration process in relation to the available standardized product or service,

(3) ORCHESTRA (integrated) procedures according to the principle of minimum stocks.

Without the first two prerequisites, don't even start building a KANBAN system.

The first prerequisite is "Standardize products and / or services". Already at this step, most of those who want to implement KANBAN give up or fall and end up only on a board / dashboard called KANBAN or tiles with yellow leaves that quickly stop using. The reason for that, as they say, is that the tasks they do are specific. This means that the result of their work, ie product or service cannot be standardized. My personal experience as an electronics and electrician on platforms, ships, and sometimes machinists in various other plants, construction, management and / or participation in numerous projects, last 8 years as a consultant, I can say that everything can be standardized! I will support my thinking with a very "old" example. The TV signal was analog. The photos were analog. After standardization (or approximation of the analog signal) they became digital. So, you can do it whenever you want and know how.

In what way is not the subject of this article. I can be contacted by anyone who is interested.

The second prerequisite is the standardization of the duration of the process, which logically follows the standardization of deliveries. And for this standardization, many say it is not possible. However, there is a contradiction with themselves. For example, in construction, an investor asks for a project completion deadline. To achieve this we need to know the deadlines for completion of each phase of the project, and to achieve this we need to know how long the excavation, masonry, formwork, concreting,… And now, if we know the duration of each service individually per unit of measure, we are not able define a standard service or product. To recognize variations and losses, Toyota Just In Time predicts three durations: (1) Time / Processing Time (usually the theoretical duration of a piece or a single service delivery) when doing just that, (2) Cycle Time to deliver the same piece or service and (3) Lead Time - the time seen by the user (buyer) of the product or service. All of these times will always vary in plus or minus for a variety of reasons. Therefore, we determine the tolerances that cover most of the exceptions. If the number of exceptions that go beyond the tolerance framework is too much, then we have failed in the standardization of products and services (under 1).

The third prerequisite is the orchestration of the process. I do not intentionally use the word integration here, because it is an IT term, and may or may not be part of orchestration. Orchestration in terms of achieving the "Just In Time" principle means that all processes involved in the value chain are so time-arranged that they provide a minimum stock of each individual process in the value chain to the user. This is possible only if we have standardized the product and services and their delivery / production duration. These at Toyota are certainly not so stupid that they did not anticipate delays, problems or, as we like to say, "inconsistencies". For that purpose, they introduce supervision or control over processes. How to monitor, control and manage a value chain to the customer is a whole story that cannot fit in this article.

Once you have managed to meet all three prerequisites and defined in the third the impact of individual processes on other processes, you can implement the KANBAN system. The funniest are those who are trying to compensate standardization with variation of processes. Some of them, after some time and a huge money spent realize that they miss standardization, and some of them unfortunately still spending money for nothing…

KANBAN is a system of ordering and withdrawing (PULL) products or services from the previous one in the value chain. The system is fundamentally simple and logical. If I have ordered something from someone and asked them to deliver it to me in a given order and with a predetermined delivery time, then it is enough to take the first next piece from stock and that piece must match the sequence as I ordered. If all the processes are coordinated (orchestrated) then all the pieces needed to put together the final product will fit for that product without thinking about whether I took the right part for that product. The same goes for sequencing / scheduling in any industry.

Logistics is a service industry. Their job is to bring parts and materials to the location and fill my pre-defined shelves for individual products according to my orders and sequences. That way, I can routinely take a piece and without looking be sure it’s just right for some final product I’m just working on. If the system is well orchestrated, the same logistics will be received at the supplier's warehouse by parts arranged in the exact way written in the order (KANBAN cards), and they will pull the load without much loss of time on control and boarding. As the customer and the supplier usually do not have the same application system, the KANBAN card is a specification for the INTEGRATION of two systems in real time.

The problem with the application of scheduling / sequencing is that in the west it is done by central dispatchers, and in the Just In Time system it is done by KANBAN automation based on the first two prerequisites. Or by the field technician in the service industry for example.

In this first article on the KANBAN method, the goal was to explain what KANBAN is in a simple way and what are the prerequisites for the introduction of the KANBAN system. In the following articles, I will deal specifically with KANBAN for IT, for field service for production and for projects. Introducing KANBAN is by no means an easy task. It can take several years depending on the size of the organization, the relationship with suppliers and subcontractors, and the way the company is managed in general. It is also possible much faster if the company accepts certain rules and is willing to change the way it is managed. However, right implemented KANBAN system may improve productivity and reduce stock more then 3 times in short period of time.

That is why I have decided in the following articles to present the main determinants of the application of the Just In Time / TPS KANBAN system in different industries.