E-Kanban - application, advantages and tools

In the last newsletter, we gave a brief overview of the control of the production process or the material flow through Kanban systems in general, and the possibility of digitising Kanban in particular. In the following Part 2 on Kanban, we shall gain further insight on these points and show the clear differences between manual Kanban and digital E-Kanban.

The background and trigger of Kanban is the avoidance of waste through the consistent application of the pull principle in the control system. The pull principle works according to consumption and thus reacts immediately to reduced or lack of consumption. This is namely because, without consumption, there is no longer any replenishment in the form of production or transport. Stocks are predetermined, there is no overproduction and unnecessary transports are avoided. With Kanban 3, seven types of waste can be avoided at once.

These advantages of the production process control through Kanban were recognised decades ago and successfully used in practice. At the time, IT systems networking and digitisation were still in its infancy and only manual tools were used.

The flow of material between a source or supplier and a sink or customer can be controlled with a Kanban circuit or loop. The source and sink can also be located within an organisation; for example, when the material is transported from the central warehouse to a production workstation. The information flow takes place in the opposite direction to the material flow, signaling to the supplier that the customer needs additional material. Further to a transport/material removal Kanban, there is also a production Kanban, whereby the article is produced at the supplier's as the customer reports a need via the information flow.

Image 1: Kanban cycle, consisting of material/information flow between source and sink

The most important instrument as a signal for the flow of information in Kanban is the Kanban card, which holds all relevant article information. These are: a) Article designation with article number, b) Number of parts in the Kanban container, c) Type of container for the article, d) the source, e) the sink and f) the Kanban card number and the total number of cards for this loop.

Image 2: Kanban card with all relevant data

To implement a manual Kanban cycle, various dealers have extensive aids such as Kanban boards for collecting and visualising the supplier's production program.

Image 3: manual Kanban board

When implementing a manual Kanban cycle, rules for handling Kanban cards must be drawn up and all those involved must strictly follow them. In practice, it is not uncommon for Kanban cards to vanish during transport from the customer to the supplier, during which they are simply put down and then forgotten - for example in a logistics staff's trouser pocket. As a result, Kanban cards are missing in the cycle and the information about a replenishment can no longer be transmitted. In the worst case, there is an interruption of the cycle and shortages at the customer site. While it is not uncommon for this interruption and the consequences thereof to be attributed to the principle of Kanban, it is often the case that no rules have been drawn up, the staff has not been adequately trained, or has ignored the rules altogether.

To avoid this, IMIG offers an audit checklist for its Kanban projects, with the help of which the complete Kanban process is evaluated based on 80 assessment criteria. Measures can be derived from the assessment result while regular audits provide monthly KPIs.

With the advent of digitisation, there were some approaches to integrate the Kanban process into an ERP or to offer it as an independent program. The term e-Kanban has established itself for these programs, and IMIG has looked around the provider market and carried out a short market research on six different providers. The possibilities around the Kanban process are almost endless, and we managed to get a very good overview through trial access and a training program at KanbanBox (www.kanbanbox.com).

The KanbanBox is a web-based software that helps everyone involved in the process control the respective Kanban process. An app for iOS and Android is even available as a simpler input option or monitoring of a Kanban cycle. Besides a PC with Internet access, a scanner and a printer, no other hardware components are required. The interface is intuitive and easy to learn, and the implementation and ongoing costs are manageable.

Image 4: Overview of the Kanban circuits and Kanban types with different status

The functions and possibilities of KanbanBox are:

• Master data management: article, partner (customer, supplier), container. External suppliers and customers can also be easily integrated into the process.
  Existing master data can be transferred using an import function.
• There are four types of Kanban circuits implemented: a) production Kanban, b) orders from external suppliers, c) deliveries to external customers and d) transport Kanban.
• Creation and adaptation of Kanban circuits incl. Calculation of the number of Kanban cards from past consumption or future forecasts.

Image 5: Options for Kanban cycles along the supply chain

• Extensive status options of the Kanban cards can be individually adapted to the application.

Image 6: possible states of the Kanban card in the board shown by different colours

• Overview of every Kanban card in the Kanban cycle in board as a supplier, customer or planner of the cycle. The board layout can be individually adapted to the requirements in special cases.
• Batch Kanban for creating lot sizes in production.
• Insertion of additional and one-off Kanban cards to deal with special situations e.g. company closure. In addition to one-off Kanban cards, these additional cards can undergo several circulations.
• Extensive templates are available for Kanban cards and additional layouts can also be designed individually.
• Company settings and a calendar with working days or delivery days can be created.
• Users can be created for everyone involved in the process, and user roles determine who is allowed to do what in the Kanban process.
• Changes to the Kanban card status are recorded.
• Comprehensive report functions for consumption statistics, stock history, FIFO tracking and material movements are available as standard.

Image 7: Report of consumption and exception messages

• Kanban cycles can be recalculated and adapted on the basis of the existing consumption data and the system proposals derived from it.
  A Kanban cycle can be recalculated using the import function to take forecasts into account.
• Linking two Kanban circuits to one trigger.
• With multi-process Kanban, several processes can be controlled centrally.
• Carrying out an inventory for the Kanban cycle
• Storage of technical drawings in the master data.
• Exchange of information about an offer regarding quantity, delivery time and / or price between customer and supplier.
• Simplifications in the internal milk-run process, typically between filling a supermarket in production from a central warehouse.
• Harmonisation of the production flow through Heijunka boards.
• Integration into external software such as ERP, MES or WMS via API or webhooks.

With the e-Kanban presented, there are functions and options relating to the Kanban process, which are difficult or impossible to implement in manual Kanban. If you would like more information about the KanbanBox in German, please feel free to contact us.

If we have aroused your interest in Kanban, but you and/or your team are still undecided as to whether Kanban is suitable for your application, we shall gladly help you with a non-binding simulation game. Stay tuned for Part 3 on Kanban in the next newsletter, where we will present the simulation game in more detail.

Thomas Klein
Senior Consultant I IMIG Germany