Tool of the Week
Today, we’re talking Kanban Cards and how they create a pull
system instead of a push system.
First, a definition. A Kanban ( kahn bahn) is a visual signal that
indicates it’s time to do something. When do you put gas in your
car? When the gauge shows a low fuel level. If you’re a risk taker,
you may wait until the light comes on indicating a near zero fuel
level. Either way, that gauge is a visual representation of a need for
more fuel.
Kanban is a Japanese words meaning Visual (kan) Card (ban).
They took off in popularity at Toyota in the mid 1900’s but were first
inspired by grocery stores. Taiichi Ohno, an Industrial Engineer who
spent his career at Toyota, noticed that in a grocery store a shelf is
only stocked with additional resources after some had been
removed. There is rarely an excessive amount of any one product
on a shelf at the grocery store. Seeing a limited amount of supply
caused Ohno to second guess the traditional manufacturing
model. Traditional manufacturing optimized for lowering the cost of
a part by producing as many as possible with no consideration for
the demand for those parts. The byproduct was huge stocks of
inventory that might not ever be purchased.
To combat that wasteful manufacturing, Ohno copied the grocery
store model – only producing a new part after one had been sold
already. In practice, a machine operator, for example, would only
be authorized to make a particular part when the last one they
made had sold. Customer demand pulled parts out of a factory. The
factory did not push parts onto the customer (or into storage). In
1940’s and 50’s Japan, Toyota was using literal pieces of paper to
represent a part. When a part was sold, a card with the part number
and specifications was then brought to a machine operator, telling
them what to make. As a result, there was no excess
inventory. This 90 second video is a good example of how a
kanban system is used in a manufacturing setting. The lessons
extend far beyond a manufacturing line, though.
A kanban could be any visual signal that a particular type of work is
needed. A light, a small bin, an empty pallet, or even a half full jug
of orange juice. When an individual has an issue at the self check
out station, a light on top indicates to a store employee that help is
needed. In small electronics manufacturing, an empty yellow bin on
your desk signals that however many yellow parts fit in the bin are
needed. In a wholesale department, an empty pallet is a sign that
however many boxes fit on a pallet are needed. When your
significant other leaves a tiny bit of juice in the container, it’s a
signal of incompetence. Just kidding – it’s actually a kanban
because it’s a signal that it is time to buy more.
In modern work environments, kanbans take the form of electronic
signals more and more frequently. Emails asking for report updates.
A digital project management board that assigns work tasks via
cards. A red-lined contract that highlights friction points. All digital
signals that a particular thing is needed.
So what value do they have? Great question!
Kanbans make it easy to know what work is most pressing. Maybe
another way to phrase it – kanbans make it easy to focus on the
work that is closest to the money. By producing what is needed
based on customer demand, it’s more likely the thing being
produced will create revenue for the business. The traditional
manufacturing model outlined above pushed out mass amounts of
inventory because it reduced the cost per part. With no guaranteed
revenue for the product, though, that business model proved to be
more expensive in the long run.
Other benefits of a kanban system are immediate insights into
quality problems and early warning signs of changing demand. On
the quality side, if a business manufactured 1,000 of the same thing
during a day and discovered a defect on number 976, it’s not
obvious how many of the total batch are bad. Nor is it obvious what
the source of the defect is. When you make what is needed, you’ll
know right away if a single piece is bad. The other benefit is that
when orders for a particular thing stop coming in, it’s clear that
demand has changed. A kanban won’t tell you why demand
changed, but it can certainly point it out. Noticing it is the first step
to fixing it.
What are the risks? Another great question!
Using a pull based system is great when you have control over
supplies. Most businesses have outside business partners that are
relied on for delivering certain supplies, though. If you only make an
order when the exact number of supplies is needed, and there is a
hiccup at all, the downstream effect can be huge. As a response,
most businesses keep a small amount of inventory (just like a
grocery store) that can keep their output flowing when a small
hiccup hits the supply chain.
Another risk with a kanban based system is that a large variety in
demand can cause a situation where a business is slow to respond
to it all, due to limited number of resources on hand. With two day
turn around times expected on nearly everything (thanks, Amazon),
being slow to respond can kill your customer service. Again, a small
amount of inventory plus an intelligent work force can combat this
risk.
As humans, visual information is much more easy to digest than
technical writing or instructions. There are certainly costs and
downsides to a kanban system, but the upside is a smoother
running system that produces products that are closest to the
money.
Do you use a push or pull system at work? Let me know on
Twitter: @Quinn_Hanson22
Now, the fun stuff
Podcast of the Week
Axios’ Re:cap podcast stepped up big time this week by publishing
a dozen podcasts that followed the Presidential Election and voting
stories. All of them just a short 5- 10 minutes, but full of insight into
what was happening in different states.
For a quick bite of content packed with a ton of information, this
podcast is pure gold.
Quote of the Week
“This is a misfortune, but to bear this worthily is a good fortune.” –
Marcus Aurelius
Things happen and will continue to happen for the duration of our
lives. Good, bad, whatever. It doesn’t really matter. If we can find a
way to bear a bad situation worthily, we can make the best of
it. What that really means in practice will differ from person to
person. My interpretation is that if you can learn from a bad
experience and make sure you don’t make the same mistake twice,
you’ll be better in the long run. And that’s what makes a bad
situation worth something .
Tweet of the Week
Gary Vee might be a cheesy social media presence at times, but
this is a great take. You’re not behind. This is an excellent reminder
that comparing yourself to someone else is not the goal
Article of the Week
This week I’m sharing a website written by Blas Moros called The
Rabbit Hole. It’s not a single article, rather an entire library. Moros
is on a quest to read as many books and articles as possible and
he summarizes everything he reads on his website. And it’s free. In
grade school, I was always told not to read summaries or spark
notes of books. Now, though, it’s one of the most helpful tools I use
because it streamlines a my decision process. A book costs money
to buy and time to read. If I can read a good summary for free
before deciding on a full commitment, I’m going to.
One of my favorite summations on his website is of the book
Genius (The Life and Science of Richard Feynman) . Feynman was
a Nobel prize winning theoretical physicist who contributed a
significant amount of work to quantum dynamics and quantum
electrodynamics. In plain English, he was really smart.
Some of my favorite notes:
– Nature uses only the longest threads to weave her patterns, so
each small piece of her fabric reveals the organization of the
entire tapestry
– He was a true Renaissance man – having had breakthroughs
in physics and mathematics and enjoyed playing the drums,
picking up women, learning languages, breaking into safes,
and more. He was playful, idiosyncratic, independent, and had
a chaotic streak in him
– If, in some cataclysm, all of scientific knowledge were to be
destroyed, and only one sentence passed on to the next
generation of creatures, what statement would contain the
most information in the fewest words? I believe it is the atomic
hypothesis that all things are made of atoms — little particles
that move around in perpetual motion, attracting each other
when they are a little distance apart, but repelling upon being
squeezed into one another. In that one sentence, you will see,
there is an enormous amount of information about the world, if
just a little imagination and thinking are applied.
– Our knowledge of things is inextricably linked to our language
and analogies. Words and phrases that we use cannot be
decoupled from our knowledge
Thanks for tuning in this week! If you found value in this, please
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