When a business is reflecting on its operational performance, clearly the turnover and profit plays an important part in how successful the company is. Some companies may decide to hire some experts from outside the company to try and help direct it in the right way. Taking risks and thinking outside the box can play an important part in this however with every risk decision, it is crucial that you balance out the pros and cons to ensure that you get the balance right and have a back-up plan if things go wrong.
One of the concepts that the experts may advise you try out is Kanban. This is a Japanese originated concept that has been around for many decades but it only really seems to be in recent years that business has caught onto it. It is particularly relevant in manufacturing environments however it can also be used in places such as supermarkets. The concept is all based on a pull system and allows you to align your inventory to exactly the needs of the customer. Tied up inventory is cash in your business therefore the lower the inventory, clearly has a lot of benefits.
What is needed to implement Kanban?
It may be a good point to get advice from a Kanban expert however the concept is not that difficult to understand and you can get a lot of information from companies that have tried this online. There are case studies all over the place which will give you some crucial points as to the learning points as if not executed correctly, the full project can fall apart and actually cause you some wider problems due to lack of inventory. Kanbanize are one provider of Kanban boards and they have a useful guide where you can learn more about Kanban here.
One of the main things that is needed for a successful Kanban rollout is a visual management system such as a Kanban Board. You can invest a lot of money in this if you like however you can either make one yourself or but a simple one from many retailers. The board should be designed in such a way where the customer demand is visible and all the operational steps leading to delivery of the product or service is clear. As soon as there is customer demand then the pull system will begin and the material should be lunched through the process. The accountable people for each operation would then update the board as the product moves through the process. At a glance anyone can then tell what is going through the manufacturing process and the inventory at a glance.
There is also some more complex digital versions of Kanban management that could be considered. In some areas where there are a larger number of operations to be completed, there may be bar scanning in place where on the batch card or router, the operation is scanned. This then gives immediate traceability as to where things are. These can be connected to TV screens and replace any old style boards. Implementing an IT solution like this could be quite costly.
People Engagement
It sounds really basic however if you don’t have the engagement of the people involved in this, it will fall at the first hurdle. This is clearly a very different way of working for some people therefore will need to get the full teams buy in. If there is just one set of people, maybe a specific operation, that do not buy into this concept then the boards will not be updated and the component will not be pulled through the system as efficiently as it should be. This will then just create unhappy customers and potentially even create a bottleneck in the value stream.
The key to this is to not only get all of the people together at the kick off to explain why this is required but also to make sure they are aware of the benefits to them and the company by implementing this. You may even want to initiate some sort of compliance checking to ensure that once everyone has shook hands that they will do this, that you check somehow for compliance.
Yield Rates
If you do not have a good yield rate or Right First Time rate, then this will definitely cause you problems. In order for this to be effective your quality performance must be high as you are effectively only launching what is needed. You are not launching extra parts of creating a buffer stock. Make sure that you look at this for each operation before kicking off this initiative and if there any areas or operations of hazard, you take immediate corrective action to either improve the process or to relax tolerances etc.
