Logistionary: Kanban

Kanban is a visual scheduling system for lean manufacturing.

It all started in the early 1940s when the first Kanban system was developed by Taiichi Ohno for Toyota automotive in Japan. It was created as a simple planning system, the aim of which was to control and manage work and inventory at every stage of production optimally.

The Kanban method gets its name from the use of kanban, visual signalling mechanisms to control work in progress for intangible work products.

Kanban aligns inventory levels with actual consumption. A signal tells a supplier to produce and deliver a new shipment when a material is consumed. This signal is tracked through the replenishment cycle, bringing visibility to the supplier, consumer, and buyer.

In contexts where supply time is lengthy and demand is difficult to forecast, often the best one can do is to respond quickly to observed demand. This situation is exactly what a kanban system accomplishes, in that it is used as a demand signal that immediately travels through the supply chain.

Kanban cards are a key component of kanban, and they signal the need to move materials within a production facility or to move materials from an outside supplier into the production facility. The kanban card is, in effect, a message that signals a depletion of product, parts, or inventory. When received, the kanban triggers replenishment of that product, part, or inventory.

Three-bin system

An example of a simple kanban system implementation is a "three-bin system" for the supplied parts, where there is no in-house manufacturing. One bin is on the factory floor (the initial demand point), one bin is in the factory store (the inventory control point), and one bin is at the supplier. The bins usually have a removable card containing the product details and other relevant information, the classic kanban card.

When the bin on the factory floor is empty (because the parts in it were used up in a manufacturing process), the empty bin and its kanban card are returned to the factory store (the inventory control point). The factory store replaces the empty bin on the factory floor with the full bin from the factory store, which also contains a kanban card. The factory store sends the empty bin with its kanban card to the supplier. The supplier's full product bin, with its kanban card, is delivered to the factory store; the supplier keeps the empty bin. This is the final step in the process. Thus, the process never runs out of product, and could be described as a closed loop, in that it provides the exact amount required, with only one spare bin so there is never oversupply.

If all this is confusing, and you´re still not clear on how Kanban works, Im sure the next image will make everything fall into place! One image is indeed worth a thousand words as they say!

Kaizen: All you need to know

 

Kaizen is a business philosophy that focuses on continuous improvement across the entire organization. The pursue of the kaizen model is to help companies focus on gradually and consistently increasing efficiency and reducing waste within processes. That doesn't mean alterations happen slowly. The kaizen process simply recognizes that small changes now can have huge impacts in the future.

To achieve all this, kaizen encourages input from any employee, from the factory floor to the most senior management.

The kaizen method became popular in Japan, at manufacturers like Toyota. Kaizen can broadly be translated as means continuous improvement in Japanese.

There are five fundamental Kaizen principles that are embedded in every tool and behaviour:

1. Know your customer

2. Let it Flow

3. Go to Gemba

4. Empower People

5. Be Transparent

Traditionally, kaizen has been known for its events, usually a three- to five-day team workshop in which employees, managers, and sometimes C-suite executives make an actionable plan to improve an existing process. Kaizen events often follow Gemba Walks or the discovery of an inefficiency. We have spoken about Gemba Walks in the past, these are visits to workplaces where management teams can witness processes, talk to employees, gather insights, and identify any issues. You can read more about Gemba Walks in here.

After you’ve identified problems or bottlenecks in a process, start making small, continuous improvements. During the kaizen event, team members collaborate and think of solutions. The ideal outcome of these events is an actionable plan that is ready for implementation.

Kaizen events can take many forms to best serve their business application.

1. Focused-improvement kaizen. A focused-improvement event is a kaizen event centred on a single, known issue. Prioritize your most important losses and develop solutions to eliminate them.

2. Waste kaizen. This type of event focuses on eliminating waste in your processes, as opposed to improving systems that are currently working.

3. Error-proofing kaizen. Use this type of event to reduce human error by improving processes. This could be as simple as standardizing checklists, automating parts of a system or using Poka Yoke which we talked about here.

4. Lead-time kaizen. This kind of event is suitable when you realize one of your processes is taking too long. The event aims to reduce the amount of time it takes to complete a process, like the time from processing an order to the customer receiving their goods.

How to run a Kaizen event:

There is not a unique way to conduct a kaizen event but the plan-do-check-act (PDCA) framework is common and often recommended method.

1. Plan

The Gemba Walk, mapping your value stream, and identifying the problems in your processes are part of the planning stage in a PDCA cycle. Follow these steps to get started.

• Speak to employees. They’re the people who know the daily process better than anyone, so find out what problems or issues they're aware of.
• Define and analyse the problem. When you’ve decided which issue to tackle, break it down and find the bottleneck in the process.
• Establish the metrics you’ll use to measure success. Without this data it’s impossible to analyse the results after you’ve tested the solution.
• Decide on a goal. You should have one goal that is achievable within the event time frame.
• Work as a team to find solutions to the problem. There should be no limits on the kind of solutions encouraged. Allow employees to use their creativity. Choose one with potential to start with.

2. Do

Run a small-scale test of your chosen solution. Make sure every team member involved is aware of the change and let it run long enough to gather meaningful data and feedback.

3. Check

Collect data from your test and assess its success.

4. Act or adjust

If the test was a success, scale, implement your improved process company-wide or as a permanent update. However, if you found issues, or if the solution didn’t work, refine the process, and run further tests or choose a different solution and try again.

This should be a cyclical process. The kaizen event might be a one-time event but the process of improving never stops. To keep the continuous loop going, repeat the cycle. Find more processes to improve or try out other solutions.

Gemba walk

Another term coined in Japan, Gemba means "the actual place", and in operations specifically Gemba usually refers to the shop floor or where the service provider interacts directly with the customer.

This concept was popularised thank to the lean manufacturing methodology, with the idea that problems are mostly visible when going to the “Gemba”, and the best improvement ideas will come from spending time where the actual issue is.

In practical terms it means that whenever there is a problem, senior management and they key decision makers must go to where the problem is to understand its full impact, gathering data from all sources.

Only when the problem has been studied “in situ” the team can go away and start working on a solution.

This concept that may seem trivial and common sense is most times undervalued and decisions to problems are being drafted and executed from the head office and regardless of the specific constraints affecting the shop floor.

You cannot expect different results by sitting in your corner office and only attending KPI meetings., instead, you need to see where the real work happens. You need to do Gemba walks.

The Gemba walk, denote the action of going to see the actual process, understand the work, ask questions, and learn, and is an activity that takes staff to the front lines to look for opportunities and practical shop floor improvement.

There are 3 important elements of this lean manufacturing tool:

1.  Go and see. Take regular walks around the shop floor and be involved in finding wasteful activities.

     2. Ask why. The main objective of a Gemba walk is to explore the value stream in detail and locate its problematic parts through active communication.

     3. Respect people. Keep in mind that a Gemba walk is not a “boss walk” or a pointing fingers exercise. You are not there to judge you are there to collaborate with the team and find problems together.

There are 7 suggested steps to follow when you go to a Gemba walk:

1. Pick a theme. This will help you focus all your efforts and be effective. There are different themes you may want to explore, such as productivity, cost efficiency, safety and etc. In order to be as precise as possible, you will also need to prepare a list of questions you are going to ask.

2. Prepare your team. The team that will be observed should be prepared for what is going to happen and have a clear understanding that the Gemba walk is a common process where the final destination is continuous improvement and not an opportunity to excrutinise their job competencies.

3. Linked to the above, focus on the process, not on people. You need to remember that the main purpose is to observe, understand, and improve the process not to evaluate your teams performance.

4. Be where the value stream is. Following the value chain will give you the best opportunities to identify areas with a high potential for waste activities.

5. Record your observations. Write down everything that grabs your attention. In some cases, you will probably be tempted to offer a solution immediately, but this would be wrong. Leave the analysis for later. You will be much more precise after you have all the facts available.

6. An extra pair of eyes. It may be a good idea to invite a colleague from another department. Someone with totally different daily tasks. People who are less familiar with the processes usually have a fresh perspective and ask different questions that you may never ask.

7. Follow-up. Even if you don’t find anything significant during your Gemba walk, you need to share with the team what you have learned or seen. Otherwise, the team will only have the feeling of being watched. If you are going to take action after the walk, inform the team about the upcoming changes and why they are necessary.

As important as the Gemba walk itself it the post-walk analysis to close the loop. Before you take any actions based on your observations, you will need some time to organize your thoughts and notes.

Conduct a meeting after each Gemba walk that may include participants from different departments. The main purpose is to have as many different points of view as possible to make the best decision.

 

 

Continuous improvement - Improve 1% every day

The marginal gains philosophy is really easy to understand; it comes down to the idea that, if you just improve 1% each day, you're going to accumulate some pretty hefty results for minimal perceived effort.

However, who can get excited about a 1% daily improvement? Well, think that over a year, those daily 1% improvements will have stacked up to give a total improvement of over 3,700%!

Improving 1% each day can yield some BIG dividends, and the best example of that is probably the GB cycling Olympic team in London 2012 with Chris Brailsford at the helm.

The whole principle came from the idea that if you break down everything you could think of that goes into riding a bike, and then improved it by 1%, you will get a significant increase when you put them all together

No stone was left unturned; they even paid attention to things like always washing your hands thoroughly to help avoid getting sick or taking your own pillow when you travel so you're better rested.

Thanks to this "aggregation of marginal gains" the British cycling team dominated the competition.

However, this isn't just about professional athletes, the basic idea of accumulating small increments of progress can work for everything.

Healthcare, aviation, learning and even speed eating have benefited in the past by this philosophy, so…what can you do right now to improve by just 1%?

Logistionary: Kaizen

Kaizen is a Japanese word that means “change ofr better” but it´s also a philosophy that refere to continuously improve; instead of encouraging large, radical changes to achieve desired goals, Kaizen philosophy recommends that organizations introduce small improvements, preferably ones that could be implemented on the same day.

In Supply Chain Kaizen is an on going process and its purpose goes beyond simple productivity improvement. It is also a process that, when done correctly, humanizes the workplace and teaches people how to eliminate waste.

While Kaizen usually delivers small improvements, the culture of continual small improvements and standardization yields large results in terms of overall improvement in productivity.

The following video, although in Spanish compliments the abobe information in an easier and approachable way!