It’s Not the Formula that Matters
The “Lean Sigma Supply Chain” blog has a post about the multiple variations of kanban formulas, the blogger writes:
“How can something so simple have so many variations. No wonder this tool has had so many failures.”
I doubt many kanban systems have failed because somebody had the wrong formula. I've used different formulas in different settings, based partly on the data that were available (or not available). It's not important if you calculate “I need 14.2 kanban containers” versus 14.32853. Kanban is not about having precise calculations.
If you have exact usage data for a part in the computer system, that's one source of kanban data (but the data might be wrong, so be careful about that). You can also use a survey of different users for a part, asking them “how much do you use on a typical day?” or “what's the most you might use in a given day?”
But having that initial kanban sizing calculation is just the first step. There are many ways that a kanban system can fail, most aren't related to the formula you used. Kanban will fail if:
- There are no visual controls in place to indicate how the kanban system is performing (i.e., are cards being sent at the right time, are we stocking out, are we over-ordering?)
- There is no standard process to make sure kanban cards or containers are being circulated properly, put in the right place, etc. (i.e., has everyone been trained?)
- There is no management oversight to make sure standard work is being followed (i.e., does management formally audit the kanban system?)
- There is no system for periodic review, for continuous improvement (or kaizen) of the kanban system (i.e., does the kanban system degrade due to lost cards or demand changes?)
It's not important that you have the most precise kanban calculation ever. It's important that you have a kanban system that works. Any thoughts? Have you struggled with any of the four points above? Do you use very quantitative data-driven kanban calculations or use estimates of part usage that you tweak over time?
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