What is Kanban?

The history of Kanban

The Japanese word Kanban consists of the parts kan = signal and ban = card, which together means ‘signal card’.

Inspired by the processes in supermarkets, where customers help themselves and employees ensure sufficient stocks on the shelves, Taiichi Ohno [1], a production manager at Toyota, developed Kanban in the late 1940s as part of the Toyota Production System. The aim was to make the material flow more efficient by only producing what was actually needed. Kanban cards were used as visual signals to indicate when new materials needed to be produced or delivered, thereby avoiding overproduction and unnecessary stockpiling.

Around 2005, computer scientist David H. Anderson [2], who had worked for Motorola and Microsoft, among others, transferred Kanban as a method to knowledge work. He recognised the potential to optimise abstract work processes, for example in software development, through the visualisation and continuous flow of work.

Today, the method is used in many industries and disciplines, whereby a distinction is made between two different types of Kanban:

• Production Kanban, also known as Manufacturing or Operational Kanban, and
• Knowledge Work Kanban, also known as Agile or IT Kanban.

Although both types have different origins and areas of application, they are based on the same principles:

The principles of Kanban

Kanban is based on four basic principles that ensure that processes can be improved efficiently and continuously. These principles are universally applicable, whether in production, software development or other areas of knowledge work.

Principle 1: Start with what you are doing now

The 1st principle is a clear invitation to apply the method in a current work situation and, if possible, without delay. It is not about identifying a perfect project or finding a team that is particularly motivated, it is about getting into the application quickly and starting the implementation with the existing processes and structures.

Example:

When Taiichi Ohno introduced the Kanban system at Toyota, he did not start with a radical reorganisation of the production processes. Instead, he took the existing production process as a starting point and introduced signal cards to control the material flow. The aim was to make the production line more efficient without changing the entire structure.

Ohno looked at the existing processes, identified bottlenecks and inefficiencies and then gradually introduced the new system. The introduction of the cards made it possible to control material replenishment by only producing or delivering new parts when they were actually needed. This resulted in a leaner and more efficient production process without disrupting the original processes and structures.

Principle 2: Pursue incremental, evolutionary change

Instead of making large and potentially disruptive changes, the 2nd principle propagates a culture of continuous, small improvements. A PDCA cycle (Plan, Do, Check, Act) reduces the risk associated with large-scale change and makes the transition smoother.

• It reduces resistance to change as employees do not feel that their previous work is being devalued.
• It enables a smooth transition where best practices can be maintained and gradually optimised.
• It recognises that existing processes and rules often exist for a reason and contain valuable knowledge.

Example:

A production line realises that delivery times for a particular component are repeatedly causing delays. Instead of changing the entire system, the supply chain is first analysed and gradually optimised to eliminate the bottlenecks.

Principle 3: Respect existing processes, roles and responsibilities

The 3rd principle emphasises the value of existing processes and structures, roles [3] and responsibilities. Instead of throwing everything overboard, the existing system is used to make improvements without questioning existing roles or responsibilities as a first step.

Example:

David J. Anderson introduced Kanban to a software development team at Microsoft that was working on a complex, lengthy product line. Instead of radically redesigning the team or immediately introducing new processes, Anderson began by analysing the existing workflow and making small, incremental improvements.

First, the team visualised the existing process on a board. In doing so, they identified bottlenecks and inefficient ways of working. Instead of making immediate, comprehensive changes, the team gradually introduced so-called work-in-progress limits and gradually adjusted the process rules to improve the workflow.

These small, evolutionary changes led to significant improvements in the efficiency and quality of software development over time, without the team being overwhelmed by radical changes. The continuous adaptation and improvement of the process enabled Microsoft to shorten development cycles and increase product quality.

Principle 4: Encourage people at all levels to take the lead

The 4th principle aims to promote a culture of ownership and engagement within the organisation. [4] It is about breaking down traditional hierarchical leadership models and instead encouraging all team members to take responsibility and show initiative in their respective areas.

Example:

At a software development service provider, team members are encouraged to coordinate with each other and make joint decisions and suggestions to optimise work processes. Tasks such as moderating meetings or coordinating sub-projects are rotated among team members and experienced team members support less experienced colleagues in developing their skills.

Ideally, the implementation of the 4th principle leads to greater motivation of all those involved, better problem solving and more efficient teamwork overall.

Remark:
It is important to emphasise that this is not about abolishing formal management positions, but rather about creating a culture in which every employee feels like an important part of the team and actively contributes to improving work processes.

The practices of Kanban

In addition to the four principles, Kanban also recognises six practices:

Practice 1: Visualise your work

One of the central practices of Kanban is the visualisation of work. This is typically achieved by using a Kanban board on which all pending tasks are displayed as cards. These cards go through different columns, each representing a step in the process, such as

• ‘To do’,
• ‘In progress’ and
• ‘Done’.

A simple real-life example could be a team developing features for a piece of software. Each functionality is represented as a card on the board. The team can see at a glance which tasks are pending, which are in progress and which have been completed.

Practice 2: Limit parallel work (WIP limit)

Another important practice is limiting the amount of parallel work in progress, also known as the work in progress limit (WIP limit). This means that only a certain number of tasks may be processed simultaneously in a certain phase. Let’s assume that a team has determined that it can effectively work on a maximum of three tasks at the same time without compromising quality or creating bottlenecks. The team therefore sets a WIP limit of three for the ‘In progress’ column on the Kanban board. This prevents too many tasks from being started but not completed at the same time.

Working with the WIP limit is reinforced by the pull principle applied, according to which tasks are only started if capacity is available for them. In contrast to a push principle, where tasks are pushed into the process regardless of the current workload, the pull principle pulls tasks into the work process when there is space (i.e. an employee with capacity).

Practice 3: Manage the work flow

Managing the flow of work is about regularity, punctuality and economically good results. It is about ensuring that tasks flow smoothly through the system without unnecessary delays. An example would be a marketing team planning and executing a series of campaigns. By monitoring the progress of each campaign on the Kanban board, the team can ensure that all campaigns are completed on time and that there are no unnecessary bottlenecks.

Practice 4: Formulate explicit process rules

For transparent and objective collaboration, it makes sense to define explicit process rules. They help to implicitly develop a common understanding and thus complement the explicit visualisation of the work. Ideally, the process rules do not fill extensive documents, but rather bring agreements down to a common denominator: tasks in the ‘To do’ column should not cause more than 5 working days of effort, tasks are only considered completed when the Definition of Done has been met, etc.

Practice 5: Implement feedback loops

Feedback loops enable the team to continuously improve the work process. Imagine a software development team working on a large project with two-week sprints and using Kanban to visualise and control the flow of work. At the end of each iteration, the team conducts a retrospective, which is a kind of feedback loop. In these meetings, the team members reflect on the past two weeks and discuss what went well, what challenges they encountered and how they can improve the way they work.

Practice 6: Improve the process continuously and collaboratively

Continuous and collaborative improvement is a central practice in Kanban, also known as Kaizen. The aim is to continuously optimise collaboration and processes. Instead of focussing on large, infrequent changes, constant readjustment promotes the working method and, as a consequence, the work result. For example, a product development team might be working on a new kitchen appliance and realise that a certain component is taking too long to produce and the quality is fluctuating. Instead of reworking the entire design, the team makes a small change to the assembly sequence, reducing production time by 10% without compromising quality. This continuous improvement is immediately integrated into the process, and the team continues the cycle of small adjustments and optimisations to make the entire development process more efficient.

The values of Kanban

In addition to the four principles and six practices, Kanban is based on nine values. They are central to the application as they define the framework for how work is organised, carried out and optimised:

Value 1: Transparency

Transparency means that all work steps and problems that arise are made visible, there is an open exchange of information and clear, unambiguous terminology is used. This enables the team to see the current status of tasks at all times, recognise potential obstacles at an early stage and make joint decisions as a team.

Value 2: Balance

Balance aims to harmonise the demands on the team with its performance. The aim is to organise a workload that is as consistent and balanced as possible without becoming (permanently or repeatedly temporarily) overloaded. This is often achieved by setting work-in-progress limits. Similar to Scrum, the aim is to work together calmly and continuously at a constant speed, integrate feedback at an early stage and thus consistently avoid undesirable developments in order to increase the overall speed of development. The balance is reinforced by the pull principle.

Value 3: Collaboration

The value of collaboration addresses close, cooperative collaboration with the aim of getting work done effectively and achieving continuous improvements. In a product development team, for example, designers, engineers and marketing experts could work together regularly to ensure that the product is both functional and marketable. To do this, they hold weekly meetings to synchronise their work, coordinate progress and solve problems together.

Value 4: Customer focus

Some companies often lose sight of their customers. Customer focus emphasises understanding the customer’s needs and aligning work to deliver maximum value to the customer. For example, if the support team notices that customer enquiries on a particular topic are increasing, it prioritises the solution in the next software update in order to quickly increase customer satisfaction and reduce future enquiries.

Value 5: Workflow

Workflow refers to the smooth movement of tasks through the system. A steady flow without blockages and delays is the goal. For example, if a logistics company uses a Kanban board to visualise the shipping process, it ideally recognises immediately when a delivery is stalled so that the team can take action to restore the flow of work – also known as workflow.

Value 6: Leadership

Leadership in the Kanban context means that everyone in the team can take the initiative when opportunities for improvement are recognised. Leadership is not limited to formal leadership roles. For example, if a software developer discovers an opportunity to speed up the code review, they suggest the change and lead the team through the implementation of the new approach.

Valure 7: Understanding

Understanding means that a team needs or has a common picture of the current situation and the challenges. This shared understanding is necessary to implement change effectively. So before a team introduces new tools or processes, it makes sure that all members understand the reasons for the change and agree on how the new methods should be applied.

Value 8: Agreement

Agreement means that those involved need clear agreements, follow defined processes and make commitments in order to make the system effective. For example, if a team agrees in a retrospective to introduce new WIP limits in order to improve quality, all members commit to respecting these new limits in their daily work.

Value 9: Respect

Respect means recognising the contributions and decisions of all team members and trusting that everyone is doing their best. So if a member of a project team makes a mistake, it is ideally not a question of apportioning blame, but of analysing the error and discussing together in the team what can be done in future to avoid this and similar errors. Every contribution is also taken seriously and respected.

These values form the backbone of the Kanban method and help teams not only to organise their work, but also to develop a culture of continuous improvement, learning and collaboration.

Application of Kanban in production

In production, Kanban is traditionally used to efficiently control the flow of materials and optimise stock levels. A typical scenario would be a production line where different components need to be assembled in a specific order.

Imagine a production line for automotive parts. In this environment, Kanban serves as a visual control system. Every time a component is used up in the production line, a Kanban card is sent to the previous step or to the warehouse to replenish the component. This signal means that the exact quantity that has been consumed should be re-produced, avoiding overproduction and minimising stock levels.

An example of this is the use of physical Kanban cards in boxes or containers. As soon as a box of screws is empty, for example, the Kanban card is forwarded to materials management for reordering. This orders or produces the exact quantity required to refill the crate. This process ensures that production runs continuously and without unnecessary interruptions, while at the same time keeping storage costs low.

This method keeps production lean, flexible and adaptable to actual demand. It allows the company to react quickly to changes in production volumes without the risk of over or under production.

Application of Kanban in project management and software development

Kanban is used in project management and software development to visualise the progress of tasks and optimise the workflow within a team. This is less about the physical flow of materials and more about the management of tasks or the realisation of user stories, for example.

For example, a software development team could use a digital Kanban board that is divided into columns such as ‘Backlog’, ‘In progress’, ‘In review’ and ‘Done’. Each task or user story is represented as a card on the board. The team starts with a large backlog of tasks that need to be completed for the next software version. By limiting the number of tasks that can be worked on simultaneously (WIP limits), the team ensures that developers are not overloaded and focus on completing a task before starting a new one. For example, if a developer is working on a task in the ‘In progress’ column, they cannot accept a new task until the current one has been completed and moved to the next column.

The Kanban board provides a clear overview of the status of all tasks at all times, and potential bottlenecks are immediately visible. The team can discuss progress in regular meetings and make adjustments if necessary to improve the workflow.

The continuous visualisation and management of the workflow increases efficiency and the team can adapt better to changing requirements. Kanban helps to complete projects on time and with high quality, while promoting flexibility and satisfaction among team members.

Questions from the field

Here you will find some questions and answers from practice:

Should the initiative to use Kanban come from the team itself, or is it more effective if management introduces this method?

Notes:

[1] Logistics Hello of Fame: Taiichi Ohno

[2] David J. Anderson: Kanban – Successful Evolutionary Change for Your Technology Business

[3] Interestingly, the need can be observed in organisations for employees to want to introduce roles and responsibilities without external pressure. See: Clarifying roles in a team.

[4] Traditional leadership styles are based on hierarchical authority and obedience. Modern leadership styles are based on the principles of teamwork, participation and employee development. What is missing from this view: followership. Followership is the other side of the leadership coin. It looks at the behaviour of employees in the course of leadership. See: Strong together: leadership and followership.

[5] The Magic of WIP Limit 1

[6] Jim Benson, Ronianne DeMaria Barry: Personal Kanban

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