LEAN Tools: Kanban

imageKanban is the Japanese word for billboard and describes a system that controls scheduling. Most people think of kanban as an inventory control system that supplies inventory when it is needed in the quantities needed with minimal or no inventory. In terms of materials management, an effective kanban system can drastically reduce inventory levels, resulting in reduced muda in the form of lower inventory holding costs.

Kanban inventory management is sometimes called a two-bin system. One bin is the bin we are currently emptying; the second bin is an order cycle supply. When our current bin is empty, it triggers an order; the second bin becomes the current supply. When the order is received in inventory, it goes into the order cycle supply.

  • Many organizations have inventory management systems in place. The question that needs to be asked is: Is your system efficient? Efficiency can be measured in terms of the amount of muda generated by determining for each specific item:
  • What is the turnover rate for the item (cycle quantity)?
  • What is the order cycle time from order placed to received?
  • How much surplus inventory (on hand less cycle quantity) is on hand?
  • How many rush orders were placed in the last year?
  • What was the extra cost of those orders?
  • How much inventory do you really need?
  • When you have determined what you need, reset the trigger that initiates an order. This may mean readjusting a value in your computer system. It may be as simple as placing a card just before a cycle quantity that says “Reorder now to maintain adequate supplies.”


The two-bin kanban system has many applications outside of inventory management. It can be applied to many areas in the hospital. Kanban is a push-pull system. A push system gives the customer what it has on hand with limited or no choice to the customer, while a pull system gives the customer what they want when they want it. The key difference is that pull strategies respond to customer demand. These are a few examples of push systems that could be converted to pull systems:

  • Outpatient surgery scheduling
  • Medical records retrieval
  • Patient billing
  • OR supply management

The challenge is to convert push into pull systems.

The shift to a LEAN culture must include integrating kanban into the new culture. Initially, introduce kanban slowly, looking for some easy wins that will engage everyone. These are the recommended steps:

  1. Familiarize everyone with the kanban concept.
  2. Look for an opportunity to put it into place (materials management?).
  3. Plan your project carefully.
  4. Gather present state data before you begin.
  5. Set goals for the kaizen event, and follow the process.
  6. Begin implementation of kanban.
  7. Track and celebrate success.

Once you have accumulated several wins, celebrate as an organization and challenge others departments to implement kanban.

What Others Have Said…

Michael developed a LEAN program for our hospital. This involved training both managers and front line staff in LEAN and its application in every department. Two LEAN projects were conducted in an effort to reduce inventory. There was a reduction of $135,000 in pharmacy inventory and $200,000 reduction in OR inventory."
Richard E. D’Alberto, FACHE
President & Chief Executive Officer
Laurens County Hospital

"Michael is a great speaker. He is inspirational and knows his trade."
Lynn Yarbrough

"Great quality- appreciate his openness to field question on the spot"
Rita Jones
CEO, Dundy County Hospital

"Michael is an outstanding, knowledgable speaker, keeps the flow going an involve the audience well."
Stephen Stewart
CEO, Artesian Valley Health System

"I like the process in implementation"
Brad Langdorf
VP Clinical Services, Community Hospital

“Michael is an excellent speaker. Content is exciting and educational.”
Mollie Heisel
Human Resource Coordinator
Brown County Regional Health Care
“Very good; usable; informative; real; encouraging”
Valerie Gigolyk
Loewen Windows

“Without your personality, coaching and spirit, we wouldn’t have made it so far.”
Ann Corrigan, RN
VP of Patient Services
Henry County Health Center

“We are utilizing the information on a regular basis. It has been exciting to see this growth.”
Pat Hales , Director of Quality and Educational Services Misericordia Health Center

“Excellent speaker- funny yet seriously important to improve our daily lives.”
Rebecca Ricartti, HR Director
Pacific Alliance Medical Center

“Michael is fantastic. Keeps the learning Entertaining and interesting.”
Stephen Stewart CEO
Artesian Valley Health System

“Great. Enjoyed the session.”
Curtis Hawkinson CEO
Community Memorial Healthcare

“Very clear and concise presentation. Always includes stories that make you think.”
Heather Greenwood, Med Tech
CHI St. Alexius Health

“Michael is a great presenter and presented he content in a manner that made it interesting and useful.”
Lynne Yarbrough, OR Director
Johnson Regional Medical Center

“Knowledgeable and energetic.”
Valerie Hangman, QI Coordinator
Providence Medical Center

I was impressed by the content and the clarity of the speaker.”
Jennifer Russell
Government of Manitoba

“Excellent quality, excellent information & keeps his agenda enthusiastic and timely.”
Terri Davis, RN
Providence Medical Center

“Dynamic speaker who leads the group to discover the answers for themselves.”
Jeff Dolan
Canada Cases Ltd.

“Mike is inspirational. A Great Motivator.”
Glen W. Buckler
Two Small Men with Big Hearts

“You have to see Michael Bayer’s presentation.”
Lois French

Investors Group

“Excellent speaker with an important message”
Rob Vineberg
Regional Director General
Citizenship & Immigration Canada

“Excellent speaker- funny yet seriously important to improve our daily lives.”
Rebecca Ricartti,
HR Director
Pacific Alliance Medical Center

“Fantastic! My cheeks hurt from laughing so much, yet I also gained so much knowledge too! Thanks!”
Daiva Griese
One Legacy

“Excellent, worthwhile. It was as good as it gets.”
Stephanie Bloodworth
Case Manager, New Directions

“Fantastic speaker. Great for any industry.”
Ron Farmer
Personal Banker, CIBC

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