Kanban is Dead

Now that I have your attention, no, Kanban is not dead. There has been, however, a sea-change in the way that the Lean community thinks about Kanban, and there is a growing openness to other material delivery options. Before I dive into that topic, however, a few words of introduction are offered, for those who need a quick Kanban refresher.

Kanban is a Japanese word for sign, billboard or more generally “signal”. In manufacturing the word is used to refer to a material delivery method that replenishes material based on a signal, usually a card, empty bin or an empty space. The beauty of the Kanban method is that material is delivered based on actual need, and the fact that previous material has already been consumed. This allows plants to control inventory tightly, achieve a high level of inventory turns, and virtually eliminate shortages. The Lean Mythology tells us that the method in manufacturing was inspired by American supermarkets, where small quantities of product are replenished based on actual sales. This did not escape the notice of visiting executives from Toyota in the 1950’s, and much of the original Kanban development is attributed to Toyota.

If you started your Lean journey in the 1990’s, Kanban was regarded as the material delivery method of choice in virtually every situation. For repetitive manufacturing companies (like Toyota) the method worked well. Other industries, like Aerospace or machine shops, struggled with the method, and instead used kitting and pick-list systems to deliver material to their consuming processes. A Lean consultant feels uncomfortable recommending kitting, since it seems to be a throw-back to an earlier, inefficient time. That way of thinking has started to change, however, even for companies like Toyota.

Keep in mind that all material handling is muda or waste. There is no such thing as value-adding material handling, since the handling by itself does not advance the product forward. You need to identify the most efficient methods for this necessary but non-value-adding work, both for the material handlers and also for the operators who are consuming the material. Here are five conditions under which a Kanban system may not be the most effective system for material delivery:

  1. The material on the line is not in front of the operator. If the operator has to turn around, or walk some distance to retrieve needed parts, that is adding waste to his/her work.
  2. There is a risk of error in selecting parts. It’s never a good thing to select the wrong part, but if items are indistinguishable with the naked eye, like different sized shims, then some countermeasure will need to be introduced to avoid selecting the wrong part. Multiple this opportunity to make a mistake across an entire line, and an error is just a matter of time.
  3. The takt time is short. The shorter the takt time, the higher the percentage of the total time consumed by selecting parts, even if they are conveniently located.
  4. High mix, Low Volume. If you are not consuming the same material consistently, your Kanban bins will remain full and unused, using both space and money.
  5. Traceability Requirements. While it is possible to maintain lot control with a Kanban system, it is more complicated, since mixing loose parts from different lots in the same bin would not be permitted. Documentation would also be needed, to record the lot actually used.

What are the options other than Kanban? We have been conditioned as Lean practitioners to consider kitting as a dirty term, so we can’t use that word. How about the term “Kanban Sets” as an alternate phrase? In this method parts would be selected (not picked!) in accordance with the sequence of products being built. They would be delivered to the line via a cart or even an AGV, in small quantities on a Kanban Set Tray. This method can still be considered a pull system, since the signal to create a Kanban Set would be the arrival of an empty tray. It would not be necessary to have one set per product; the parts could be selected in small quantities to reduce the number of moves and the amount of handling needed. Line side material could be largely eliminated, freeing up significant space on the production line itself. The Kanban Set cell could be located logically in order to reduce the handling of incoming material. Pick to light systems, if desired, could be much more efficiently utilized, instead of using them on every workstation on the line.

The bottom line: under the right conditions a Kanban system is the material delivery method of choice. Under the wrong conditions, as listed above, a Kanban system can be a major contributor to inefficiency in labor, space utilization and quality. There may be a Kanban Set system in your future!

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