Kanban Inventory

One system shines above when used for manufacturing management purposes. Can you guess it? That's right, it's Kanban. Initially, this is where it has been applied, to industries where inventory must be managed. A study by Apreutesei 2010 has found Kanban's efficiency to be extremely effective in inventory management.

Why Does It Work?

The 6 Rules of Kanban, Source

Apreutesei excludes the 6 essential rules of Kanban that must be followed in order to set the gears in motion for Kanban

Basically, due to the visuality that the Kanban system allows you are able to see who is working on what. This enables you to be in control of the workflow and gives you an opportunity to allocate resources strategically.

A Kanban card is an essential element of the Kanban system used for managing physical inventory. Serving as a visual indicator, each card corresponds to a specific Kanban inventory item. These cards can be either physical or digital and are mainly utilized to monitor the movement and status of inventory items through different stages of the supply chain. As items progress from ordering to delivery and stocking, their corresponding Kanban cards are moved along the board, visually representing their current status in the inventory cycle.

Kanban board example with Kanban cards

You might think "This is so simple" and you wouldn't be wrong, it really is. Kanban's simplicity is exactly its superpower. By preventing overproduction and overworking, you are able to focus solely on providing quality results in an effective manner.

Kanban Prioritization

Another reason why Kanban works is the ingrained system of Kanban's prioritization. In fact, it works so well that according to a survey by LeanKit, organizations using Kanban experienced a 200% increase in productivity and a 50% reduction in lead time.

How does it even work? This is again mostly due to its visual component and WIP limits. While the visuality has been discussed, let's take a look at the WIP limits.

WIP limits allow your team's Kanban prioritization to flourish. But before WIP limits, be sure to define and establish your priority categories. You can use whatever works for you but I'll be kind and give you some established examples:

Categorical priorities :

• Critical: Tasks must be done immediately to meet deadlines or deal with urgent matters.
• High: Important tasks that help keep the project on schedule but aren’t as urgent.
• Medium: Necessary tasks that do not have immediate deadlines but are essential for project completion.
• Low: Tasks that need to be done but have the least impact on the project timeline. This approach promotes a balanced workflow. Critical tasks receive the necessary resources and attention while still progressing on less urgent tasks.

For WIP limits, use Kanban board's top indicator of how many tasks is currently being worked on. You are able to set the limit yourself.

Examples of WIP limits on a Kanban board

Kanban Inventory Management System

While it is possible to make up your own Kanban board in the physical world, it can be hard to work around this if your team needs to be online (which, usually is the case, as it's best to be updated in a second, what's happening in your inventory).

For this reason, I would recommend picking the right Kanban inventory management software. There are myriad choices which you can make so pick wisely. Be sure to do your research beforehand on what you need and what you expect this system should do. Some software do not have all the capabilities your industry might need.

Wrap Up

All in all, Kanban works great as a pull system that gives immense flexibility for you and your team to workaround the challenges of inventory management. In my humble opinion, the Kanban system remains undefeated in this area of expertise. You and your team should definitely give it a try if you've never experienced the greatness that is a Kanban system.