Kanban (a Lean Principle) Explained

If you are not a student or practitioner of Lean Management, you might find the term "Kanban" to be quite unfamiliar within the context of business.

What is Kanban?

Kanban is a Lean Management term which comes from Japanese, meaning “visual card” or “signboard.” It was originally developed by Toyota as part of their Lean manufacturing methodology to improve efficiency. Today it’s used extensively across several industries.

At its core, Kanban is a visual workflow management system designed to help teams see what needs to be done, what’s in progress, and what has been completed. Think of it as a “big picture dashboard” that keeps everyone on the same page or a signal system that communicates needs between processes.

3 Practical Examples

Example 1 - Picture a whiteboard with the following three columns:

• To Do

• Doing

• Done

Under the “To Do” column, sticky notes are placed with all the tasks to be done. Once a task has been started, it is moved from “To Do” to “Doing.” Once finished, it moves to “Done.”

Everyone on a team can glance at the board and immediately know what’s happening. No confusion, no wasted effort, and fewer forgotten tasks.

That’s Kanban in action as a system making work visible, limiting overload, and helping teams flow smoothly.

Example 2 – Imagine a factory assembling cars. Each car needs 4 tires.

• The assembly line is the downstream process that pulls tires as cars are being built.

• Next to the tire rack is a Kanban card. When the rack is almost empty, the card is sent back to the tire supply team (upstream process).

• That card is the signal indicating “We need another batch of tires now.”

• The supply team delivers just enough tires to refill the rack; not too many (avoiding excess inventory), and not too late (avoiding production stoppages).

If no Kanban card is returned, no new tires are delivered. This ensures production is always pulled by actual demand, not by guessing or overproducing.

Example 3 – For this example, imagine a restaurant at a peak dinner hour.

• Dinner guests arrive and place orders with the server.

• The server writes the orders on a ticket (Kanban card) and passes it to the kitchen.

• That ticket is the signal: it tells the kitchen exactly what to prepare, when to prepare it, and in what quantity.

• Once the dish is ready, the kitchen signals back by plating the meal and sending it forward.

• No meals are made unless there’s an order ticket.

As a visual workflow management system, it serves as a communication system, where every signal ensures smooth, just-in-time delivery of products or services.

• The ticket = Kanban card.

• The kitchen = upstream process.

• The diners = downstream demand.

• The server = flow manager.

As a process and resource management excellence methodology, it also keeps the restaurant from overcooking food that may not be ordered, avoids wasted ingredients, and ensures each customer gets exactly what they need, when they need it. Thus, work and resources are pulled when needed, rather than being pushed blindly.

Why Kanban is Important in Business

1. Visibility - Kanban makes all tasks, processes, and stages visible. Instead of work being “in someone’s head” or lost in email chains, teams can see exactly what’s being worked on, what’s waiting, and what’s done. In effect, bottlenecks, delays, or overloads are immediately obvious.

2. Enables Just-in-Time Workflow - Kanban is a pull system, meaning work or materials are produced only when needed. This serves as is a key driver of resource efficiency and inventory cost management, by ensuring resources are focused on actual demand, not speculation.

3. Increases Team Focus and Productivity - By limiting the number of tasks in progress, Kanban helps teams avoid multitasking overload, encourages the completion of work before starting a new task, and reduces mistakes caused by context switching.

4. Improves Customer Satisfaction - With Kanban, deliverables are completed faster and more predictably, ensuring customers receive products or services without unnecessary delays.

5. Flexibility - Mindful that priorities can shift quickly, Kanban as a visual work process shows the impact right away and signals to all team members the need to shift priorities to engage in demand-driven processes seamlessly.

6. Continuous Improvement - It highlights where work gets stuck and serves as a visible learning board for areas of improvement.

In summary, Kanban makes work visible, flows predictable, and improvements continuous, thereby turning chaos into clarity. It is a simple yet powerful way to keep track of what needs to be done, what’s being worked on, and what has been completed, ensuring that nothing gets lost, wasted, or forgotten in the process.