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Enterprise Excellence
November 10, 2015
How Kanban systems are used in different industries
Written by
Gemba®
If you are not familiar with Kanban, read my post Kanban in the easy steps.
Many regard Kanban systems to be highly-efficient tools for service delivery. But just how effective are they?
For HP, the results achieved through implementing Kanban were staggering. In 2006, its Printer Firmware Division, who are based in Boise, Idaho, decided to implement a Kanban system as part of a lean initiative. HP attributed 400 per cent of an 800 per cent productivity improvement to Kanban, and also reported a fall in lead times from 21 months to 3.5 months.[i]
Underpinning Toyota's 'just-in-time' (JIT) production system, Kanban has been used to great effect in the automotive industry. But the real selling point of Kanban systems is that they can be used by any industry - from software houses to clothing manufacturers, as the underlying mechanism for managing the production line can still be applied.
So how do other industries use Kanban to improve their businesses? In this revealing blog, I'll show you how Pixar, Zara, Spotify and the video game industry use Kanban.
Pixar
“I don’t care how you do it, but get that table out of here.” For Ed Catmull, the President of Pixar Animation, replacing a square table with a long, skinny one was the first step on a Lean journey of discovery at Pixar.[ii]
Catmull also changed the office layout by converting the executive suites into story rooms. He then moved his office into the centre of the building, and most importantly, had a new patterned carpet installed, which acted like a road guiding people towards his office.[iii]
His actions were symbolic of a fundamental Pixar belief: Unhindered communication was key, no matter what your rank. [iv]
It was also the first step in opening up the Pixar workforce to Lean thinking and Kanban in particular.
That’s because if you want to Kanban to work in any business, you need to create a culture of working, where every person (no matter what their job title) feels free to offer opinion and constructive criticism at any time.
And though Pixar does not use a traditional assembly line in its creative process, it has been heavily influenced by the Toyota Production System.
Indeed, Pixar may not have conveyor belts connecting each work station, but for Ed Catmull, it is vitally important that a film be made in order. Therefore, each team passes the product, or idea to the next team, who in turn pushes it further down the chain.
High-level Kanban boards were used to ensure that this happened. It meant that staff working on a production knew exactly what everyone else was doing, and most importantly how their work directly affected their colleagues.
However, in his bestselling book, Creativity, Inc., Catmull explains that by instilling Lean Manufacturing techniques, he created a work culture where anyone could ‘pull the cord’ and ‘stop the line.’[v]
But for Catmull, this wasn’t enough. He realised that the highest standards of quality could only be achieved if the workforce understood that while ‘efficiency was a goal, quality was the goal.’
For Catmull, Kanban provided proof that Pixar was putting people first, and not just saying that is did.
Catmull talks about how Kanban solved the issue of the ‘beautiful shaped penny.’ This is the penny that the diligent Pixar artist spends hours creating, only to discover that the cinema-goer only catches a tiny glimpse of it, or does not see it at all.
He recounts how a producer, John Walker, devised a system using popsicle sticks so that his team could see what exactly was possible (given limited resources) on each day of production.
The sticks were stuck to a wall with Velcro. Each stick represented a person-week, which is the amount of work a single animator could achieve in a single week.
As an easy visual cue, sticks would be arranged next to a particular character. If for example, producers had 10 animators, and five popsicle sticks had been assigned to The Incredibles' characters, ‘Elasti-Girl’ and five given to ‘Jack-Jack’, it would make everyone realise the positive creative impact of limits.[vi]
This simple but highly effective process ensured that new tasks could only be taken on unless resources were re-arranged. It also encouraged everyone in the team to think in a more lean way and analyse the total work process.
The kind of questions the exercise elicited are as follows:
1. Why does Elasti-Girl need five popsicle sticks?
2. We need to carry out an urgent task, can we take some of the popsicle sticks assigned to Jack-Jack, and attach them to the new task?
But at Pixar, Kanban is everywhere. So much so that many Lean thinking coaches outside the computer animation studio, use a simple technique known as the Pixar Pitch, to help their students to realise why they need to develop a Kanban system.
The questions the trainer will ask are as follows: [vii]
1. What has happened in the past?
2. Who are the key characters in the story?
3. What was their present situation?
4. What happened to change it?
5. What were the consequences?
By the end of the pitch, the learner should not only realise why a Kanban system needs to be implemented, but be able to understand how flow, value and potential will shape the Kanban task board design.
Spotify
Spotify, the world’s biggest subscription streaming music service, has also embraced Kanban.
It's operation team turned to Kanban after realising that its workload was ‘reactive’ rather than ‘proactive,’ meaning that it struggled to find time to for planned projects.[viii]
The team dealt with problem by sitting down in a relaxed and informal setting to get a clearer idea of what the work it actually did.[ix]
It then asked tasked itself with answering the following questions:
1. What kind of work does it actually do?
2. How much time is spent on the various kinds of work?
3. Is it possible to categorise work into domains in a meaningful way?
4. Where do the jobs come from? Does the Operation team initiate them? If not, who provides it with work?
5. How is it sharing knowledge with other departments?
6. How can it ensure that operations development gets the time it needs?
7. Is it possible to lower the amount of context-switching that it does?
The working group quickly realised that employing a ‘goalkeeper,' who could catch all ad hoc requests, would ensure greater levels of efficiency for the team. Small tasks would be carried out straight away, while larger tasks would be written on a Kanban card and placed on the task board.
As for the Kanban board, Spotify's Operations team decided to make it as simple as possible.
It contains three vertical lanes:
To DoDoing
Its Kanban board also has two horizontal lanes. Any tangible tasks, such as ‘upgrading the capacity of data storage’ go here, while the other lane comprises of intangible work, which includes tasks such as ‘planning a server migration’ or 'designing databases.'
Spotify organises work into three separate categories. Jobs are either small, medium or large. Small tasks take a day, medium sized ones a few days, and large jobs a week.
But what about assignments that take more than week? The Operations team refers to such tasks as projects. It simply splits them into small, medium and large tasks, and then inserts them the tasks back into the backlog.
Finally, Spotify was keen not to set too high a Work In Progress (WIP) on the To Do lane to ensure that all intangible tasks are actually completed.
The video games industry: Why Kanban and not Scrum?
The global video games industry is worth a staggering USD$ 100 billion, and according to leading agile coach, Clinton Keith, Kanban has been central to its rise.[x]
Keith, who spent 15 years in the game development industry and developed the Bourne Conspiracy video game, says that Kanban tools have been used by the industry to slash production costs by over 50%.[xi]
Keith maintains that Kanban provides predictability, transparency and optimisation for complex game production.
Keith, who first introduced Kanban to the gaming industry in 2006, says that the industry realised that while employing Scrum in the pre-production phase made good sense, it was a mistake to do so in the production stage.
Keith says Kanban is the best fit for production content, but that most developers still use Scrum for the pre-production and production stages.
According to Keith, Scrum is best employed when developers are in the iterative phase and are “trying to move towards the origin of certainty.”
Take video game development for example. Scrum, he says, is best employed when programmers are trying to work out what is fun and what is not. It is also the best tool when deciding the right game for the current market. Lastly, it's the perfect filter mechanism to action, and to discard the swarm of ideas that constantly surface in the pre-production stage.
Kanban is best used in the Production phase because developers know that 75 per cent of a video game's budget is spent is in the production phase. Kanban differs from Scrum because it helps us visualise both the process and the people carrying out the work.
Take this simple gaming example. The project manager requests a character walking around in your game. Three stages and three separate skilled technicians are required to complete this process.
The task begins with a programmer doing the modelling. The modeller then hands over to a programmer, who builds the skeleton into the model, so that the character is walking around. Finally, an audio technician adds the sound of footsteps to complete the process.
The project manager dictates that the work be completed in two days. Unfortunately the modeller falls ill on the first day of the sprint, meaning that the lateness gets passed down the line.
It is not immediately obvious or transparent on a Scrum task board. The result is that the Audio technician at the end of the line, either does not have enough time to finish applying the sound effects, or he has to rush the work to ensure that the team meets the deadline.
However, if the project manager has used a Kanban board, the absence would have a drawn a red flag straight away. The Kanban cards on the board immediately highlight a gap. The WIP limits immediately flag that something is wrong that creates a 'bubble of no work' later down the line.
Kanban offers this visual transparency, allowing the project manager to deal with the absence (as and when it happens) and draw up a contingency plan, so that the audio technician has enough time to finish the sound effects without expending high levels of stress.
Zara
Zara, the biggest fashion retailer in the world, has been using Kanban systems for years, using its ‘just-in-time’ inventory approach first implemented by the Toyota Motor Company. It's important to state, however, that 'just-in time' is actually Lean production. The term 'Lean' was coined in 1990. Before that it was called 'just-in-time.'
Most fashion companies update their collections four-times a year. Zara, however, breaks all the fashion supply chain rules by holding low stock and updating its collections continuously.
Through its ‘just-in-time’ method, Zara can get product from initial design phase to shop floor in just 15 days. [xii]
It achieves this by staying local in the manufacturing process. So instead of outsourcing to Asia, Zara uses a network of 14 highly automated factories in Spain and over 300 small finishing factories in Morocco, Portugal and Turkey to constantly create unfinished products.
Kanban systems are operated at store level too. Sales managers are responsible for their individual Kanbans. For it is the store manager who has a big says on what is produced, when it is produced, and how much to produce. Twice a week they will send an order to headquarters, which is based on state-of–the-art sales data, as well as anecdotal evidence as to what loyal customers want to see sold on the shop floor.
The commercial team then processes the order, but will also carry out much more detailed and broader research, allowing them to identify the most popular clothing trends. New styles of clothing are added to the order and the order arrives back in the store in just two days.
Zara’s strategy has led to its parent company, Inditex, establishing itself as the largest clothing retailer in the world. But perhaps the greatest compliment is that other clothes retailers are copying the Zara way, by manufacturing longer-lead time grey goods in Asia, but finishing off the garments in the USA. This ensures that the customer receives the goods much more quickly than was previously possible.[xiii]
This simple but highly effective process ensured that new tasks could only be taken on unless resources were re-arranged. It also encouraged everyone in the team to think in a more lean way and analyse the total work process.
The kind of questions the exercise elicited are as follows:
1. Why does Elasti-Girl need five popsicle sticks?
2. We need to carry out an urgent task, can we take some of the popsicle sticks assigned to Jack-Jack, and attach them to the new task?
But at Pixar, Kanban is everywhere. So much so that many Lean thinking coaches outside the computer animation studio, use a simple technique known as the Pixar Pitch, to help their students to realise why they need to develop a Kanban system.
The questions the trainer will ask are as follows: [vii]
1. What has happened in the past?
2. Who are the key characters in the story?
3. What was their present situation?
4. What happened to change it?
5. What were the consequences?
By the end of the pitch, the learner should not only realise why a Kanban system needs to be implemented, but be able to understand how flow, value and potential will shape the Kanban task board design.
Spotify, the world’s biggest subscription streaming music service, has also embraced Kanban.
It's operation team turned to Kanban after realising that its workload was ‘reactive’ rather than ‘proactive,’ meaning that it struggled to find time to for planned projects.[viii]
The team dealt with problem by sitting down in a relaxed and informal setting to get a clearer idea of what the work it actually did.[ix]
It then asked tasked itself with answering the following questions:
1. What kind of work does it actually do?
2. How much time is spent on the various kinds of work?
3. Is it possible to categorise work into domains in a meaningful way?
4. Where do the jobs come from? Does the Operation team initiate them? If not, who provides it with work?
5. How is it sharing knowledge with other departments?
6. How can it ensure that operations development gets the time it needs?
7. Is it possible to lower the amount of context-switching that it does?
The working group quickly realised that employing a ‘goalkeeper,' who could catch all ad hoc requests, would ensure greater levels of efficiency for the team. Small tasks would be carried out straight away, while larger tasks would be written on a Kanban card and placed on the task board.
As for the Kanban board, Spotify's Operations team decided to make it as simple as possible.
It contains three vertical lanes:
To Do
Doing
Its Kanban board also has two horizontal lanes. Any tangible tasks, such as ‘upgrading the capacity of data storage’ go here, while the other lane comprises of intangible work, which includes tasks such as ‘planning a server migration’ or 'designing databases.'
Spotify organises work into three separate categories. Jobs are either small, medium or large. Small tasks take a day, medium sized ones a few days, and large jobs a week.
But what about assignments that take more than week? The Operations team refers to such tasks as projects. It simply splits them into small, medium and large tasks, and then inserts them the tasks back into the backlog.
Finally, Spotify was keen not to set too high a Work In Progress (WIP) on the To Do lane to ensure that all intangible tasks are actually completed.
Zara, the biggest fashion retailer in the world, has been using Kanban systems for years, using its ‘just-in-time’ inventory approach first implemented by the Toyota Motor Company. It's important to state, however, that 'just-in time' is actually Lean production. The term 'Lean' was coined in 1990. Before that it was called 'just-in-time.'
Most fashion companies update their collections four-times a year. Zara, however, breaks all the fashion supply chain rules by holding low stock and updating its collections continuously.
Through its ‘just-in-time’ method, Zara can get product from initial design phase to shop floor in just 15 days. [xii]
It achieves this by staying local in the manufacturing process. So instead of outsourcing to Asia, Zara uses a network of 14 highly automated factories in Spain and over 300 small finishing factories in Morocco, Portugal and Turkey to constantly create unfinished products.
Kanban systems are operated at store level too. Sales managers are responsible for their individual Kanbans. For it is the store manager who has a big says on what is produced, when it is produced, and how much to produce. Twice a week they will send an order to headquarters, which is based on state-of–the-art sales data, as well as anecdotal evidence as to what loyal customers want to see sold on the shop floor.
The commercial team then processes the order, but will also carry out much more detailed and broader research, allowing them to identify the most popular clothing trends. New styles of clothing are added to the order and the order arrives back in the store in just two days.
Zara’s strategy has led to its parent company, Inditex, establishing itself as the largest clothing retailer in the world. But perhaps the greatest compliment is that other clothes retailers are copying the Zara way, by manufacturing longer-lead time grey goods in Asia, but finishing off the garments in the USA. This ensures that the customer receives the goods much more quickly than was previously possible.[xiii]
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