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ASCM Insights

Kanban for SMBs Step-by-Step

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Lean production systems such as kanban primarily exist in large organizations and are used much more rarely at small and midsize business (SMBs). But inventory accuracy is crucial regardless of size. Moreover, as SMBs grow and more resources become available, they are forced to change how they do business. By implementing kanban now, SMBs can avoid having to adopt lean on the fly, significantly improve their supply chains and reach their true potential.

According to the APICS Dictionary, kanban is a method of just-in-time production that uses standard containers of lot sizes with a single card attached to each. It is a pull system in which work centers signal with a card that they wish to withdraw parts from feeding operations or suppliers. Also, unlike other types of lean production systems, kanban can be applied with almost no upfront or ongoing costs. Implementation can be as simple as creating cards that trigger replenishment.

I’ve personally had the opportunity to implement kanban in two facilities as part of an internship with Husco Automotive. The organization wanted to improve facility utilization, become more efficient, and save time and money. The process was challenging, and there were some setbacks and challenges. However, company executives now say they wish they had taken on the challenge years ago because it eliminated roughly 500 materials hours annually.

The first project at Husco involved implementing a kanban system of replenishment for all production lines. Every company implements kanban differently; it all depends on the particular operation. Here’s how it worked at Husco:

  1. I began by collecting data on all the part numbers and calculating how many kanban cards each part needed, based on the production line.
  2. Next, I calculated when each card would need to be turned in to be replenished. This was the most challenging part of implementation because I had to take into consideration overtime, weekends and so much more.
  3. Now, having that key information, I used a kanban template and printed and laminated each card.
  4. Then, I put the kanban cards on the corresponding parts.
  5. Next came training for the operators so they would know how to pull the parts at the correct time.
  6. Lastly, the material handlers also received training on parts replenishment.

At the second Husco facility, kanban implementation was similar to the first, except for the replenishment portion. The second operation was much bigger, making it difficult for a material handler to manually collect each card every three hours. Therefore, I used the same kanban template, but added barcodes for each part number and production line. I also created a spreadsheet to be accessed by the material handler and all production lines. Once the card hits its replenishment point, the line operator scans the part number and production line bar codes located on the card. They are then added to the spreadsheet, which acts as a trigger for the material handler to replenish the parts.

Even with very little knowledge of kanban, I was able to implement a system of replenishment that totally changed how the company manages production. Anyone can do it — especially SMBs, which must continue to be more efficient and competitive in all markets. With dedication, all SMBs can implement kanban and enjoy a much more successful supply chain.

About the Author

Noah Fischer Associate Buyer, Husco Automotive

Noah Fischer is an associate buyer at Husco Automotive and recent graduate of the University of Wisconsin-Whitewater. He may be contacted at fischernoah@yahoo.com.

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