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Make Your Business Better with the (Physical) Kanban Method

Lessons from lean manufacturing can make your life easier.

By
Stever Robbins,
Episode #514
image of towels using kanban method

Today we’re going to learn how to make sure you never run out of anything ever again by using Kanban, a system that comes from the Lean Manufacturing movement. Let's set the scene...

It’s not easy running a daycare center. And Grandma Cuddles, of Grandma Cuddles Daycare, should know. The lilies of the field may not toil or spin, but Grandma knows that an honest day’s labor is just the thing to instill a good work ethic in her youngsters.

And business is booming! She’s teaching her tiny charges handwriting, an extremely marketable skill. She gives them samples of famous people’s handwriting—CEOs, heads of state, and so on. They develop dexterity learning to imitate that handwriting exactly! Cuddles even gives them cute little tax forms, bank checks, contracts, and other realistic pieces of paper to practice their writing skills in real-world situations. 

But with the growth comes growing pains. So Grandma has hired a new Chief Financial Officer to examine the company’s systems. Straight from the World Poker championship, he’s known simply as "Chip." He swears that he never cheated, ever, so Cuddles knew he was the right person for the job.

Things In a Business Flow

Chip’s first action (other than putting on his monocle) was to review operations. The theoretical maximum output of Granda Cuddles Signature Paperwork Division, given the speed, dexterity, and joint flexibility of spry little hands, is 15 signed defense contracts per hour. But only five were being produced. He investigated.

Cuddles recently started feeding the kiddies a full day’s complement of calories. They’re writing twice as fast as before! So why was output so low?

Because the little tykes were so productive. Take little Jordan, for example. Jordan can sign Vladimir Putin’s signature 15 times in ten minutes. That empties out the entire stack of realistic-looking defense contracts! Jordan ends up sitting idle until more realistic-looking documents came in. Chip and Cuddles agree that idle hands are the Devil’s plaything. So in addition to eliminating bathroom breaks, he’s using lean manufacturing to keep little Jordan working at peak efficiency.

What Is the Kanban Method?

Businesses used to forecast what was needed and when. They would then arrange for materials to be there when needed. Cuddles would estimate that 20 contracts should be sent to Jordan, and those would be routed. But one forecasting error would either overwhelm Jordan with too much to handle, or leave Jordan with nothing to do but idly twiddle thumbs. Then Taiichi Ohno at Toyota invented an easier way called Kanban.

Rather than using forecasting, Kanban is when actual printed cards are added to the flow of materials. Those cards let the people who are dealing with materials know what to do next, and give enough information so they can immediately do what it takes to keep things moving.

Towards the bottom of the stack of incoming papers, Chip puts a card saying "Send more documents!" When Jordan reaches the card, they give the card to the supervisor who forwards it to the curriculum design and foreign affairs department, which prepares the next set of realistic-looking documents for Jordan to practice signing. New documents are only ordered as Jordan finishes old ones, rather than relying on forecasts. This way, the learning can continue nonstop.

In recent years, the word Kanban has also been used to describe a project management tool where project phases are tracked by moving cards along a series of vertical boards. We'll deal with that in a future episode. Today, we're talking about physical Kanban.

Take Lead Times Into Account

Deciding where to put the Kanban card depends on how long it will take to refill the stack. It takes the Foreign Affairs department time to prepare realistic-looking documents. If Chip puts the Kanban card at the bottom of Jordan’s pile, Jordan will sit idle while new documents are prepared. Instead, the card is positioned a few documents from the bottom, so there’s time to prepare the next batch while Jordan is finishing the current stack.

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