6 Kanban Rules that will lead you to Sustainability and Profitability

Kanban is definitely a must-want tool for every single company. It helps you organize the workflow and show you the next steps to improve the performance of your team.

Perhaps you find a way to keep progression work and update your staff with new tasks and demands in an organized board, just like kanban. But only Kanban will point out your organization and support your team all the time.

In this article, you will learn the six rules of Kanban and how you can implement them in your workforce. Before you scroll down, let’s take a closer look at some Kanban hot topics that we’ve already been through:

How to eliminate bottlenecks with Kanban?
How to diversify tasks with Kanban?
Kanban: 7 tips to take over this board

What is Kanban?

In the competitive environment of the modern business world, companies constantly have to battle for survival – often by decreasing costs and increasing productivity.

At the core of Kanban is the concept of Flow. This means that the cards should flow through the system as evenly as possible, without long waiting times or blockages.

The Kanban Method is a means to design, manage, and improve flow systems for knowledge work. The method also allows organizations to start with their existing workflow and drive evolutionary change. They can do this by visualizing their flow of work, limit work in progress (WIP), and stop starting and start finishing.

Once the product is consumed, for example, purchased by a customer or used in the assembly line, the card is removed and sent back to the production center, signaling that a new product has to be produced.

The idea of Kanban originates from a supermarket, where a limited number of products are stored on the shelves. A new item is placed on a shelf only when older products are purchased, and free space becomes available.

Such systems, where one stage of a process is dependent on the previous stage, is known as a pull system. Production that is triggered by a customer order is known as just-in-time manufacturing.

This approach allows minimizing the stock of materials, work-in-progress, and completed products. In modern companies, physical cards are often replaced by electronic notifications or e-mail.

The Six Rules of Kanban

Let’s find out the six rules of Kanban and how they apply to traditional production and knowledge work.

1. Never Deliver Defective Products

Upstream processes shouldn’t pass products that do not meet the standards and level of quality expected. Defective products should be removed from the production line and be dealt with outside of it.

This ensures that only quality products go to your customers, lessens waste, and decreases customer complaints.

Policies help ensure that the desired level of quality is maintained at every step. This is fairly straightforward for tangible goods production. But the same applies to knowledge work.

If the team agrees that all features and enhancements need to pass these levels of testing, then that’s the only time they can release them to market.

The later you find a defect, the more expensive it is. Hence, the goal is to catch defects early.

This avoids costly subsequent mistakes, and also allows earlier detection of systematic errors. Ideally, every machine at every step should be able to detect defects.

2. Supplier produces items in the precise amounts and sequences

A successful Kanban implementation requires that downstream processes only pull what they need. This prevents overproduction, lowers costs, and makes operations more reflective of the demands of the market.

Applying this rule as one of the six rules of Kanban is fairly straightforward for manufacturing processes.

The subsequent process knows best when it needs more material. Hence, it makes sense for the subsequent process to come and pick up the items as needed so that they can be reproduced by the kanban system.

For knowledge work, we can see this as only working on customer requests or orders when needed. This also means following the priority in your backlog.

3. Produce the Exact Quantity Required

Taking only what you need would lead to only producing the exact quantity of products that are required. If you overproduce, what are you going to do with that excess inventory?

How does this apply to knowledge work? Having a Minimum Viable Product (MVP) mindset helps in this area.

If a customer wants to have the facility to download a report from your app, you don’t need to throw in a print feature as well.

Focus on the minimum requirements. You can build on the product as the market demands or as your product direction leads you to it.

4. Reduce Fluctuations

To achieve a steady flow of work, all units within the Kanban system should only produce the number of items based on the capacity of its limiting contributor.

Large fluctuations mean either an occasional lack of material or much larger inventory levels to cover these fluctuations.

Both are not good. The first causes stoppages and subsequent lack of material downstream. The second increases the negative effects of inventory.

In knowledge work, we can see leveling by measuring the capacity of every step in your Kanban. When you spot a bottleneck, you can alleviate the burden by augmenting your resources or setting your work-in-progress limit (WIP) based on your limiting contributor.

5. Tune In the Production or Process Optimization

Once the team has initialized its Kanban implementation, the next aim should be to utilize their Kanban system to surface pain points and improve opportunities. This would require a closer look at how work is flowing and measuring their performance.

Over time, the demands on your system will change, as will the system itself. Therefore, you have to adapt the system. Adjusting the number of kanbans is an approach to fine-tune your production.

If your demand or your replenishment time increases, you need more kanban to cover this demand (assuming that you do have the capacity to satisfy this increased demand). If your demand or your replenishment time decreases, you may get away with less kanban.

Kanban metrics such as lead time, cycle time, and throughput will help teams get a quantitative and objective assessment of their work. A cumulative flow diagram will help teams spot bottlenecks.

Teams must use the tools available for them to make informed decisions on how to optimize their process. They must look for activities that produce waste. This can be in the form of delays, defects, rework, and unnecessary handoffs to name a few.

Regular team retrospectives where teams discuss their experiences, pain points, and improvement suggestions and then formulate solutions to address them are key to fine-tuning production.

As inefficiencies decrease, work-in-progress items also decrease because the process is leaner.

6. Stabilize and Rationalize the Production Process

The last rule aims to stabilize the system. When you establish your kanban loop, you must put forth the effort to debug the newly implemented kanban system, create the standards for the new system, make sure the new standards are actually good, and find problems and resolve them.

When you ensure quality, level production, and optimize your process, your process gains stability.

A stable process enables standardization. You should document your process so that there is a common shared understanding of how your team should operate. Any deviations to the process standards should be managed by policies.

Having your standards explicit provides a strong foundation for your team to operate with predictability and consistency.

Your policies and standards can evolve through time as you continue to fine-tune your process. Have regular team reviews to update your process and make your Kanban system more robust.

Process all Kanban rules using GitScrum!

GitScrum has special features to help you to produce more and get efficient results with your team. Use our Kanban Boards to put what is in theory into practice!

Sign up now and work with Agile and Scrum methodologies!

Reference:
Kanban Zone