How to Use Kanban in Your Start-Up Business
When you are involved in a start-up business there is a lot to take into consideration around ensuring that key performance indicators are identified and that there are good plans in place in order to achieve these. There is a high proportion of business that fail in the first few years therefore really thinking through the enablers to be successful is crucial to ensure that your business is not one of these.
What is Kanban?
Kanban is a project that may be relevant to your business depending on how it operates. This concept was created in the 1940s in Japan and was initially used in the automotive industry. Companies such as Toyota still use this concept religiously globally across many of their operations. It is only in the past rwo decades that this concept has really begun to become more and more popular and is used in many different business types including the aerospace industry but other manufacturing environments.
Kanban is a system that relies on pulling product through the process steps rather than the conventional push system. This really does put the voice of the customer at the forefront and will make exactly the quantity that is requested by them.
Advantages of Kanban
If you are making exactly what your customer needs, when they need it then this is a winning situation for everyone. Ultimately by operating in this way, you would not require to create things such as buffer stocks and there would be minimum waste of product.
Kanban may also help identify any bottlenecks in your process. Clearly there are other tools to do this which include value stream mapping however Kanban will also help with this. The key thing here is that no matter what process you use to identify bottlenecks, the corrective action is taken immediately in order to remove it. If you have a bottleneck in your process then clearly this will affect lead-time of product going to your customer therefore directly affecting how successful your Kanban project would be.
What is needed in your business before implementation?
There are a number of things you need to consider before you implement Kanban. These include:
- Engaged teams – You need to ensure that this has been sold to the workforce in the right way. If the teams are not bought into this process then it will fail immediately as it requires people at all operations and in different functions to be part of the project. In a start-up business this should be a lot easier to implement as people will not be set in their ways of working already therefore any resistance to change should be minimum.
- Visual Management System – A key part of the Kanban process is the actual Kanban Boards. These can be purchased from many different people for a very low cost. Generally these would be placed at a central area in the business where the people involved can access and update. There are different types of Kanban boards available however the most common one is the paper card system where these are moved along the board underneath the operations which gives clear immediate visibility to everyone of the current work in progress. You can however go even more basic and use things such as post-it notes or you could go the other way and use a IT system to give traceability and immediate visibility of the WIP.
- High Yield Rates – The quality of product you are producing is important to ensure that the product continues to flow smoothly through the operations. This can be measured in different ways which include things such as Right First Time or Cpk. Ultimately if you have parts coming out of an operation that are not to specification and need things such as rework or disposition, this will slow things up and directly affect the success of the Kanban system. If this is a problem, then you should look to take corrective actions before even looking to implement a Kanban system. You can use things such as Define Measure Analysis Implement Control (DMAIC) projects to do this. If you do not have the skillset internally to do this, you can hire someone externally to support.
Disadvantages of Kanban
There are a few disadvantages of Kanban that you should also be aware of:
- Inventory – By implementing Kanban then your inventory will immediately reduce. Effectively you would not have a buffer stock therefore if for example you have a quality problem and you need components immediately, you may not have any in stock.
- Team involvement – This is one system that just won’t work unless everyone that is a stakeholder to producing and delivering the part has bought into it.
Do you have any innovative business idea you would like to make come true? Use STARTUPS.CH experts to become self-employed.
