Sick of identifying gaps in your inventory management processes? What if you had a visual map for your workflows? Sounds perfect, right? Kanban inventory to the rescue.

The world of supply chain management can be complicated, but having a system in place that optimizes workflows and reduces inventory costs can be beneficial. One such system worth looking at is Kanban inventory management.

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What This Guide Covers:

• What Is Kanban Inventory?
• Elements
• Core Principles
• Fundamental Practices
• Primary Benefits
• Final Thoughts

What Is Kanban Inventory?

The Kanban inventory system is a lean inventory tool used to optimize inventory, maximize efficiency, improve transparency and limit work in progress (WIP). Kanban is a Japanese term that means “billboard.” But what exactly does it signify?

When working in tech, most of our work is often intangible or invisible. This is where Kanban steps in and helps us build visual workflows for our projects and present them to others.

The Kanban method, as defined by David J. Anderson, is an effective process to improve workflow efficiency in any industry. Operating on a pull system, one of the main components of Kanban inventory is the Kanban board.

Kanban boards are of two types: physical and digital. The most basic and simplest kind of Kanban board is the physical one. It allocates work into vertical work phase columns and uses a whiteboard and sticky notes to represent these tasks.

The digital transformation of a kanban board allows teams to collaborate and work remotely. Digital Kanban boards are highly flexible and grant asynchronous tracking of workflows with complete visibility.

Kanban boards like Shortcut help you visualize workflows and give a complete insight into the production process. Source

Now that we have covered the basics, let us take a look at the different elements of a Kanban board.

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Elements

Integrating Kanban software with your daily workflow helps streamline processes. Kanban inventory uses the Kanban board to improve predictability and productivity and helps enhance visibility. Discussed below are the six features or elements of a Kanban board:

1. Cards: Kanban cards visually represent tasks. Based on the task type, Kanban cards assign colors to each card as it contains detailed information about task deadlines, file attachments and statuses.
2. Columns: Representing the different stages in your workflow, from the “In Progress” queue to “Final Completion,” Kanban columns are these queues where the cards reside.
3. Work-in-Progress Limits: Apply WIP limits and set a maximum number of tasks per stage to avoid workflow bottlenecks and help your team focus on the work at hand.
4. Swimlanes: These are the top horizontal rows on your Kanban board with tags like “WIP,” “Resolve Changes” and “Done” that help define and split tasks.
5. Commitment Point: After the initial project planning stage, the commitment point is when a project finally begins as its associated details get pulled on the Kanban board.
6. Delivery Point: As the name suggests, this is the point where your work gets delivered. It can be by making it to the last column on your Kanban board or reaching your customer.

Note: The workflow period between the commitment and delivery points is the lead time. Organizations strategize their workflow and aim to reduce the time to implementation.

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Core Principles

Used in just-in-time inventory and production, the Kanban system of inventory management helps monitor and optimize inventory levels. From improving flow and manufacturing efficiency to reducing cycle time, Kanban inventory helps refine your business processes.

But what makes Kanban inventory so successful? Its four core principles! Let’s take a detailed look at them:

1. Start With What You’re Doing Now: The non-disruptive flexibility of Kanban inventory allows it to lay over any existing process. It assesses and highlights inefficiencies within your current workflow and implements change gradually.
2. Implement Incremental Over Radical Change: Making sweeping changes to your existing process might lead to employee dissatisfaction and resistance. The Kanban method urges small incremental changes over time.
3. Respect Current Organizational Structures: Implementing Kanban inventory does not require any kind of adjustment to the existing job roles/titles. Once everyone gets accustomed to the process, tweaks are made accordingly over time.
4. Encourage Leadership Across All Levels: Acts of leadership aren’t limited to senior officials. They can originate from anywhere in the organization. The Kanban method emphasizes company-wide improvement by coming up with ideas that help transform the production cycle.

Fundamental Practices

Now that we have a fair idea about the core Kanban principles, why don’t we dig a little deeper? Let’s dive into the six fundamental practices associated with Kanban inventory.

1. Visualize Workflows: Whether on a physical or digital Kanban board, first, you need to visualize and divide your tasks based on complexity. Color code tasks and move around cards between swimlanes for different activities.
2. Limit WIP: As we mentioned previously, Kanban is a pull system. It encourages setting limits in each workflow stage to maximize focus and efficiency. This causes you to complete the work at hand before you can pull the card to the next stage.
3. Manage Workflows: To reduce cycle time, you need to ensure improvement in production levels. With Kanban inventory, you can effectively observe your workflows to identify bottlenecks and eliminate them.
4. Create Structured Process Policies: Use Kanban inventory to create a framework that clearly defines and publishes tasks using checklists and detailed task descriptions.
5. Implement Feedback Loops: Feedback loops are integral to implementing Kanban software. Setting up tracking metrics and scheduling review meetings are some ways to achieve this.
6. Improve and Evolve Processes: Kanban inventory lets you improve things at a gradual pace. It uses scientific methods to execute changes based on metrics, analytics and feedback.

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Primary Benefits

From enhanced workflow visibility to optimized operations, let us go through some of the other primary benefits of Kanban inventory:

• Reduce Inventory Cost: Use Kanban inventory to optimize inventory levels. It is a cost-effective process that prevents overstocking by enabling you to only buy products and materials when required, thus maintaining a cleaner warehouse.
• Leverage Demand-based Supply: Analyzing customer demands and individual stock replenishment rates, you can infer which items are in higher demand. This way, you can identify the unpopular stocks and even opt for a product line revamp.
• Prevent Overstocking: Kanban inventory allows complete control over stock movement. Inventory gets replenished when stocks hit a particular threshold, thus preventing damage to goods or overstock.
• Improve Status Reports: Leverage real data based on analytics and reports to improve workflows and make informed decisions.

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Final Thoughts

Whether in any industry — manufacturing, retail, marketing, health care or sales— Kanban inventory helps manage and track workflows.

Don’t you want to visualize your workflow and optimize your processes? Then embrace the Kanban philosophy and invest in Kanban inventory. Eliminate the risk of selecting the wrong software by reaching out to our team of experts.

How do you use Kanban inventory management to enhance your workflows? Let us know in the comments below!