a lean manufacturing tool - australian printing systems · 2019-03-01 · kanban cards are...

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KanbanA Lean Manufacturing Tool

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contents

IntroductIon .................................................................................... pg 1

Brief History

Kanban Basics

Small Inventories

BenefIts ..............................................................................................pg 3

Improving Production

Reducing Inventory

Meeting Customer Demand

BasIc Methods.................................................................................pg 5

Kanban Cards

Explanation of the System

Examples

Kanban Queues

IMpleMentatIon .............................................................................pg 7

Kanban Basics

Universal Customer

Kanban Preparation

Kanban Design

data collectIon.............................................................................pg 9

Getting Started

Process Measurement

Data Interpretation & Application

sustaInIng .........................................................................................pg 12

Kanban Evolves

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Benefits of Kanban

Sustaining Kanban

pg 3

pg 12

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IntRoductIonMost facilities share two common business goals—decrease costs and increase production. How managers go about accomplishing these goals may vary, but most can be achieved with the aid of Kanban.

Brief HistoryKanban is one of the most popular efficiency improvement systems used in any size of facility. It was developed as an integral part of the Just In Time (JIT) production system, developed at Toyota, by Taiichi Ohno, and influenced by American economist W. Edward Deming. When implemented properly, Kanban uses a system through visual communication and inventory management to eliminate waste and reduce cost of over production. Kanban eliminates stock piling wasteful inventory, instead, supplying only what is needed based on demand.

Modern American business methods such as Training within Industry (TWI) and Total Quality Management (TQM), developed in the 1930s and 1940s, provided the foundation for Kanban. Japanese facility managers and leaders like Taiichi Ohno learned of these methods during the U.S.-backed reconstruction effort just after the war. Elements of TWI and TQM were shared with industrial managers, which led to many innovative Japanese methods and philosophies. The Japanese refer to this early industrial period as The Quality Movement. Several of these innovations are now popularly used in industrial facilities throughout the world.

Taiichi Ohno was specifically tasked with catching up the Toyota production process to American standards of production. After visiting the U.S. he publicly expressed how impressed he was by what he saw in American supermarkets. Consumers picked items off the shelves dictating demand, and inventory was replaced only when the items were removed. He realized that Toyota’s productivity could eliminate inefficiencies and wastefulness by implementing the same ideology. Let customers dictate demand by producing things on an as needed basis.

Kanban was happening in American stores and restaurants naturally based on consumerism, before it had a defined name. The Japanese recognized it as an efficient system translating it to manufacturing to improve assembly lines, warehouses and other similar industrial facility processes. Anywhere inventories are relied on for production, Kanban has a place. Where implemented properly, the system is proven to help facilities become more time and cost efficient. Worker safety, morale, and even sales are known to improve with Kanban.

Translated to English Kanban has several similar meanings. Translations include: instruction card, visible

record and signboard. All refer to a system where the status of production and inventory are clearly displayed using very simple methods of visual communication. As a result, processes are streamlined and problems identified and improved.

In this guide, several fundamental Kanban concepts are addressed to assist a facility in implementation. Keep in mind, not all ideas or methods described in this guide are suitable for all facilities. You must decide which elements are right for the processes you hope to improve.

With Kanban implemented, station operators find ways to be more efficient with the inventory on hand.

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Kanban BasicsIn industrial-method terms, Kanban is known as a pull system based on demand. This means facilities stock inventory determined by orders placed. The inventory is then pulled through each production segment purely by customer demand.

Kanban, offers greater efficiency than a traditional pull system due to its visual cues. Kanban relies on limited inventories and visual markers to help workers improve efficiency. Orders become easily tracked from start to finish.

Small InventoriesBefore Kanban was developed in Japan, many facilities were starved for space. Inventory-storage was difficult to find and very expensive. Facilities soon realized storing large inventories was not cost-effective.

To overcome this obstacle, Japanese managers began applying new methods to reduce inventories. Instead of stocking inventory based on projected demands, inventory was only stocked when customers demanded products. Many additional benefits were soon realized by these early implementations. As an example, facilities rarely overproduced because limited supplies naturally stop production when orders are met.

For many traditional Western facilities, maintaining small inventories may appear somewhat problematic. After all, large inventories are thought to keep a facility from running out of materials. With Kanban properly implemented, materials are always available to meet a facility’s production demands.

In addition to improving process flow, Kanban helps managers and workers control inventory size with strategically placed visual communication. These are generally colored markers placed near or under inventory stocks to help workers easily monitor levels and rapidly adjust to changes in customer demand.

IntRoductIon


BenefItSBy combining simple controls and methods, Kanban naturally creates a “check-and-balance” system. Workers will no longer be guided by facility-wide production goals. Instead, their goal is to ensure inventory stocks and individual production duties move along with customer order demands and don’t exceed them.

Improving ProductionOnce Kanban is properly implemented, workers operating assembly stations will naturally gauge their own work performance and adjust accordingly. As a result, workers become more focused on meeting upstream demands and less on individual achievements.

Common benefits include:

• Lowered overhead costs

• Standardized production goals

• Increased efficiency

• Reduced obsolete inventory

• More control for workers

• Improved flow

• Prevention of overproduction

• Progress reports for managers

• Improved responsiveness to changes in demand

To achieve a truly self-managed process, visual communication is used to help workers easily identify inventory levels at each step in a process. Strategically placed labels and signs give workers minute-by-minute production goals. In turn, processes have greater transparency—promoting efficiency.

Reducing InventoryOne of Kanban’s most celebrated benefits is its inherent ability to help processes function with very limited inventories. In fact, Kanban is known to reduce inventories by as much as 75%. Inventory reductions decrease overhead costs, increase efficiency and save money.

Since nothing in Kanban is ever produced until a customer’s order is placed, large stockpiles of inventory are unnecessary. Kanban helps facilities program processes so they are always supplied with what they actually need and shortages are eliminated. Station operators learn to work with smaller buffers and find ways to be more efficient with the inventory on hand.

Working with small buffers provides many benefits. One benefit is the system’s natural ability to expose inefficiencies in production. Inventory stocks are easy to monitor and issues are quickly identified, almost as they happen. Solutions can then be found, well before an entire process is affected. In Kanban, unnecessary overstocking

or obsolete items never take valuable storage space. These limits help workers focus on filling orders with greater efficiency.

Meeting customer demandSince station operators continually pull the supplies they need from proceeding stations, production goals are naturally established by customer demand. In Kanban, the production goal for each station operator is to always keep pace with a system’s continual pull. This eliminates wasted time and energy by focusing production on actual needs and not desired goals.

Kanban is designed to help implementation teams make precise adjustments to a process. Processes must be programmed to operate with tight buffers for adjustments to function properly. Use visual communication to help workers see when their station is behind or ahead of production. These visual cues provide immediate feedback to help workers rapidly adjust to ongoing changes in pull. Visual cue adjustments can be made at any step in a process to improve inventory flow.

Kanban promotes minimizing actions within a process. Actions involved in each step of a process should be boiled down to the least number of steps possible. This way, materials are never moved or stored twice in a single process. Goods immediately enter a process the moment they land on the loading dock.

Kanban is designed to help implementation teams make precise adjustments to a process.


BASIc MetHodSKanban Cards and Kanban Queues are two common methods that make Kanban successful.

Kanban cardsOne of the earliest forms of Kanban is a simple card-based system known as Kanban Cards.

Production and warehouse facilities use this system to track inventory and control production. Even today, Kanban cards are popularly used to track the status of unfinished units and provide production with special instructions.

explanation of the SystemA simple way to think of how Kanban works is a three-step visual process.

1. To do column: Order cards are placed in the “to do” column to indicate inventory supply needed.

2. Doing column: Order cards are pulled from the “to do column” and inventory is moved to the “doing” process for workers to assemble what is needed.

3. Done column: Order cards are pulled from the “doing” column to the “done” column and product is shipped out.

Once the “done” order cards are removed, this is a visual indication to workers to pull the order cards from the “doing” column to ship out more products. Workers responsible for the “doing” column then need to pull order cards from the “to do” column to get more inventory assembled. Workers in charge of inventory and the “to do” column will order more inventory based on orders coming in. This system continues to cycle and workers visually understand exactly what is required of them in the process of manufacturing.

examplesFollow the visual example in Fig 1. The first station operator attaches an issued Kanban card to the production unit’s storage container. The card remains attached to the container throughout production.

Once the production unit and its associated Kanban card arrive at the end of a process, the card is removed and returned to the hanging file (Fig 2). Empty slots in the hanging file visually communicate how many orders have been issued and how many more must be produced to fill all orders. Place the hanging file in a central location to give all workers access to the current production status.

Modern facilities may use more complex, multi-layered forms of the Kanban Card system. Cards may include carbon copies so each station or drop point within a process keeps a physical record of each unit they produce.

Other facilities have moved to a software based Kanban card. This system relies on barcoded labels and electronic databases to track production and inventory. Managers can track production from any network or WiFi location ─ providing greater control over a process.

Kanban cards are normally printed on a durable, industrial-grade material so they survive rough handling common to production processes. DuraLabel’s DuraTag™ and magnetic supplies are both made of industrial-grade materials ideal for use as Kanban cards. DuraLabel printers make it easy to design cards in-house so they look professional. With an in-house industrial printer, cards can be printed on-demand and custom designed with barcodes and special fields for improved tracking.

Fig 1

Fig 2


Kanban QueuesWarehouse floors are easily and economically marked to indicate proper locations for palletized or other large container storage. Kanban queues visually communicate dedicated storage locations to all workers. Floor markings can be used to help facilities organize inventory or finished products. This visual communication makes inventory easy to locate and identify so stocks are tightly controlled.

In Fig 3, additional inventory in the upstream queue at Station 1 alerts the operator at Station 2 to replenish their queue. Queues are restocked immediately so customer orders are filled on time.

When customer orders increase, production naturally adjusts to meet these new demands. To avoid shortages, program queues with a small, but necessary buffer. Extra inventory within a process provides flexibility so adjustments are seamless throughout a shift. Just remember not to overstock buffers. The system depends on limited inventories to function properly.

For rolling, or other moving inventories, colors can be designed into queues. Workers use these colors to help maintain accurate stocks and improve process flow. In Fig 4, queues are marked with stop-light coloring to help station operators react to pulls in demand as it happens.

With a properly programmed queue, time is never wasted calculating upstream or downstream demands. Needs are visually communicated as stocks are removed. Colors reveal downstream and upstream demands at a glance─eliminating guesswork and overproduction.

Fig 3

Fig 4

Replenishing Downstream Demands

Station 1

Station 1 Station 2 Station 3

Station 2

BASIc MetHodS


IMPLeMentAtIonTeach the basics of Kanban to all employees during facility-wide meetings. How it will be implemented in your facility should be understood by all to be truly successful.

Kanban BasicsKanban implementations can be as simple or complex as you make them. All require discipline and facility-wide support to be successful. This is why it’s critical for all employees to understand the benefits of Kanban prior to implementation.

Once management is prepared to implement Kanban, form an implementation team to develop and manage the system. Invite personnel from all facility levels to participate as members of this team. Having teams with varied perspectives invites more feedback for planning. For a truly successful implementation, teams should meet regularly so issues and concerns can be discussed and resolved.

universal customerIn a Kanban facility, workers are expected to treat coworkers and managers as customers. Each employee is asked to take it upon themselves to produce the best possible products and services for their many customers.

The philosophy benefits a process in many ways. For example, station operators in an assembly line consider a downstream station operator as a customer instead of just a coworker. They are motivated to provide quality goods and services downstream, which results in a higher quality product.

Satisfying the needs of coworkers and managers should be the goal of all employees. When a worker’s customers are happy, it reflects positively on them. Satisfying the needs of others helps workers take a personal interest in the job they do.

Treating coworkers and managers as customers has always been much more than just a business philosophy in Japan. It’s traditional cultural. Some claim Japan’s dedication to satisfying the customer is the main reason for their success.

Japanese employees are credited as the first to formally apply universal customer to industrial manufacturing and did so as early as the 1960s. Since then, employees at facilities around the world have applied similar philosophies to improve other Lean methods and systems.

Benefits of “Universal Customer”:

• Better communication

• Higher quality product

• Lower production costs

• Less wasted-time formulating ideas

• Reduced production lead times

Since Kanban helps workers focus on inventory and production efficiency, the system easily integrates with a number of popular Lean Manufacturing systems, processes and philosophies.

If your facility has not already implemented Lean, Kanban is an excellent first step. An implementation shows how basic efficiency improvements are made in Lean and the role visual communication plays. The system is often used to pave the way for more complex implementations like Lean.

Less time is spent sifting through inventory when color-coding is used for labeling products, components, and raw material.


Kanban PreparationKanban team leaders should begin researching and documenting facility process elements. Diagrams are one of the best ways to document a process and describe how unfinished products travel through a process. Good diagrams will continue to offer Kanban team leaders excellent reference.

Since diagrams help describe processes in simple and very visual terms, they expose inefficiencies more clearly. Once identified, team members can use process diagrams to develop and implement more effective Kanban techniques and examine individual process stages more closely.

The first stage in a Kanban process is a customer order and the last stage is delivery of a finished product. The assembly of each product type makes up an individual process.

For the life of a facility, processes should be viewed as imperfect. Team leaders should continuously look for new ways to reduce inefficiencies and work to combine related actions into single events. Streamlining a process into an uninterrupted flow of production is the ultimate goal.

Implementation team members research each action or step involved in a process and then consider alternative techniques and tools to see if steps can be streamlined into fewer actions. Whenever an unnecessary action is eliminated, costs are reduced and efficiency is improved.

Keep in mind, the path materials take should never represent a single process. As an example, manufacturing facilities often retool assembly equipment to produce different products. Different tools or equipment are generally required at some point when a different product must pass through the same assembly line. Identifying each process by a finished good ensures data accuracy.

Displaying a process diagram helps improve Kanban techniques.

Kanban designFor Kanban to provide the greatest return on investment, facility managers must be willing to make considerable changes to their operations. In some cases, this may actually require relocating a process or facility. Keep in mind, the goal of Kanban is to continuously strive for the most efficient processes possible. Finished products should provide the customer with the greatest possible quality and value.

Access to materials, utilities and other critical process resources should be continuously monitored by Kanban team members. Where costs exceed benefits, relocation may be required. Relocating a plant may dramatically improve facility efficiency and, in some cases, save facilities from becoming obsolete.

Just like an internal facility process, diagrams can be used to describe each stage in an external process. This is called value stream mapping. Diagrams are used to help expose external inefficiencies so team members can modify processes where necessary. As an example, delivery of a specific material would be described as an individual process and stages would be identified and indicate man-hours, time, and cost. This diagram would offer excellent reference when researching relocation sites.

Facility layout is another critical element to consider in Kanban. Process diagrams will likely expose bottlenecks and other process delays due to poor layout. Ensure materials flow uninterrupted through a process by modifying layout where possible. As an example, it may be beneficial to reorganize assembly stations so interruptions in flow are eliminated. Other considerations include workspace. Workers are often more efficient when provided with adequate space. Eliminate obstacles so routine tasks are performed efficiently and safely.

Well researched diagrams of all facility processes will be beneficial in helping your team streamline production and improve efficiency. Update your diagrams whenever facility layout changes are considered. The goal is to continually strive for maximum efficiency using the best data available.

IMPLeMentAtIon


SAMPLE

dAtA coLLectIonSample data from all stages within a process will maximize process efficiency. Complete and reliable data results in more accurate changes to processes.

Getting StartedImplementation teams should develop a disciplined schedule for data collection. Longer periods will provide more accuracy, but may be unrealistic for many processes.

In large facilities, with multiple processes, team members should collect data from processes they are most familiar with. Refer to previously diagramed process steps to help with data collection research.

In Kanban, data is collected regularly from each individual stage in a process. This generally provides data collectors with measurable events occurring at each step.

Data collections should sample production times, maintenance times, downtimes, and retooling times. In manufacturing, and some warehouse processes, units produced and rejects are generally sampled for the collection period.

Collections must be regularly scheduled and occur over an established sampling period. Depending on the accuracy required, a collection period could be a week, several months or longer. Since Kanban works to streamline processes, data collectors will find it much easier to take accurate samplings once Kanban is fully implemented.

To ensure the data is as accurate as possible, a calendar of collection days should be created and provided to Kanban team leaders. Collections must always fall within established sampling periods, but occur randomly. For example, one collection may occur at the start of a shift and another may start at the end of a shift. Mix these times up so data contains a good cross section of all shifts. Extenuating factors, such as power outages or equipment failures, are known to skew data. Document these occurrences so their effects are factored in.

From this point forward, data collections should be a regularly occurring activity for Kanban team leaders and continue for the life of a process. Create data collection guidelines to ensure accuracy.

The following list describes several examples of common facility data collection guidelines:

• Processes should be divided by individual finished products. Changeovers create separate processes.

• Data collectors should have access to computers to store data electronically. Fig 5 shows process data stored in a Microsoft® Excel spreadsheet.

• Videotaping the production of a single unit through a complete production process offers valuable information.

• To increase data collection efficiency, all production units and related components or materials should be assigned a reference number.

BLEACHED FLOUR PROCESSSTATION 3 (Avg. per week)

Product Number 75Q-211

Product Name Bleached

Production Rate 1498

Production Order Demand 1500

Time Per Drum 35 sec.

Batch Size 1

Retooling Time 15 min.

Preventative Maintenance 10 min.

Downtime 15 min.

Reject Rate 5

Fig 5


SAMPLE

Process MeasurementKanban data collection should focus on measuring the routine elements of a process. These are generally measurements of time and production. As an example, the assembly of a single component by a station might be one measurement.

Once team members define what data will be collected, build a collection checklist for Kanban team leaders to reference. Having a checklist ensures the same process elements are always sampled. The goal should always be to collect reliable data so process modifications or adjustments are always accurate and improve efficiency.

The following measurement examples are commonly used in manufacturing processes. Implementation teams will need to research whether these measurements apply, or develop a more applicable set of measurements.

• Batch Size – The smallest number of units a station produces in one production run. As an example, the batch size for canned beverage packaging is commonly six. Automated tools generally determine batch sizes in modern production facilities. Handmade items normally have a batch size of one.

• Station Production Rate – The average number of batches a station produces during the established sampling period.

• Production Order Demand – The average number of orders demanded. This will help you calculate production requirements. As an example, a production order demand of 100 finished units might require 100 man hours to produce.

• Retooling Times – This is the average time it takes for process tools to be changed over to produce a different product. Lost time for shut-downs, clean-ups and start-ups are factored in.

• Downtime – Any unscheduled stop in production. This includes any unscheduled repair, employee emergency, etc. Lunches, breaks and scheduled maintenance periods are not factored in.

• Reject Rate – All finished products and materials removed from a process.

dAtA coLLectIon


dAtA coLLectIon

data Interpretation & ApplicationAs your implementation team compiles data, better comparisons will be possible and trends more apparent. Comparisons may occasionally show unusual data. Never hesitate to retake a collection when this occurs. Incorrect data diminishes Kanban’s effectiveness and can even harm a process. This is why it is always better for data collection to be accurate, than fast.

Setting guidelines can help Kanban team leaders avoid common shortcuts and focus on consistency and accuracy. As part of the guidelines, encourage team leaders to research what’s really happening in a process. Document any unusual activities or discoveries as a routine part of their collections. Data collectors will be the ears and eyes of the process.

Once complete, data should be transferred into an electronic spreadsheet. Format the spreadsheet to display each process individually. Breaking data up by process helps organize data into useful and accessible groups. Convert the spreadsheet into graphs and charts to provide a more complete picture of a process. Highlight improvements and issues.

To make the most of your team’s data, develop a set of simple formulas to help gauge efficiency for all facility processes. This figure will be your Kanban Score and can be calculated by averaging all process scores within a facility. Track Kanban Scores on a chart and share them with facility employees by displaying them on posters (Fig 6).

Depending on process type, many popular efficiency formulas can be used to calculate the efficiency of process elements.

In manufacturing, popular supply chain management formulas are used to calculate the Reject Rate, Production Unit, Production Time, Scheduled Production Time, Scheduled Retooling Time and Buffer Quantity. Once Kanban team leaders select a formula for each, facility improvements can be tracked and displayed as a single facility Kanban Score.

As your team begins to record Kanban Scores, use the results of these calculations as your team’s basis for process redesigns. As an example, converting raw material and component storage to Kanban queues will likely decrease lengthy production times. Support team members’ creativity and ingenuity. They will be important assets as you and your team tackle a redesign.

Over time, buffers used to ensure sufficient station inventory should be fine-tuned. Research shipping terms, production lead times, vendor lead times and a facility’s own level of comfort to set buffers. As adjustments are made, Kanban Scores should always improve. Help this to occur by keeping workers focused on meeting customer orders and eliminating over production.

Process stations generally find their optimum buffer quantity through trial and error. For example, a very small inventory buffer may result in stock shortages at one station seven-days-a-year. By raising this level slightly, a station may completely eliminate shortages and, in turn, improve their Kanban Score.

Consultants and books are often valuable resources. Both can provide detailed directions on how to apply specific Kanban methods. One of the more popular Kanban books is Kanban Made Simple by John M. Gross and Kennith R. McInnis. The book contains many useful process formulas to help your team tailor the right system for your specific process type.

Display facility Kanban achievement scores on posters at strategic locations. Visible scores provide workers with the feedback they need to improve. In this example, a facility has chosen to display the status of a "Kanban Score". A score is often calculated using a set of custom formulas based on production time, supply efficiency and several other key process measurements.

Fig 6


SuStAInInGEnsure Kanban continues to benefit the processes it’s applied to. Use the following tips to help sustain Kanban for the long run.

Kanban evolvesSince processes are so different, there are many Kanban methods and techniques not discussed in this guide. Only general applications are covered for basic implementations. Over time, Kanban teams should consider developing custom methods and techniques to improve data collection and efficiency. Kanban should continually change to improve efficiency. This is especially true as new technology becomes available and facility needs change. Keep Kanban flexible so methods and techniques are adaptable to changes. Processes must always be operating at their optimum efficiency.

Program the processes in your facility to rely on the most efficient level of inventory. Do this by limiting inventory stocks so they never exceed customer demands.

Keep in mind, Kanban relies on facility-wide participation to improve existing implementations. Feedback should be

encouraged from all employees. Their unique perspectives will help guide your implementation team to more accurate solutions and foster continued support for Kanban’s sustained use.

Kanban is best implemented alongside other popularly used “Lean Manufacturing” systems and philosophies. Two of these are 5S and Kaizen. The two go hand-in-hand with most Kanban implementations. Having both in place paves the way for a more successful Lean Manufacturing implementation.

Make sure to share your Kanban success stories. Show reductions in cost and resulting profits by displaying these successes on highly visible banners. This helps employees see the fruit of their labor and encourages improvement. In time, using these techniques will help Kanban become an accepted practice and integral element of a facility’s overall operations.

The cooperation of all employees to continually improve facility-wide process will help to ensure the success of Kanban.

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a lean manufacturing tool - australian printing systems · 2019-03-01 · kanban cards are...

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