How does Kanban affect lead time?

How does Kanban affect lead time?

When using Kanban one of the biggest changes that many companies have to make is in terms of what triggers them to create additional products. Without Kanban, most facilities will create a substantial inventory of items that they will then work on selling to their customers. With Kanban, however, the strategy is to wait for customers to make an order and then deliver them the products from the warehoused inventory.

Many companies are concerned that if they wait for clients to ‘pull’ the creation of new products it will dramatically impact the lead time, which could result in upset customers. Lead time is the amount of time it takes from the moment a customer places an order until they have it delivered to them. Keeping in mind that customers typically don’t care whether a product is already made or made upon order, as long as they get it quickly, this is a concern that needs to be addressed for anyone implementing Kanban.

How is Lead Time Impacted?

Many companies are surprised to learn that the lead time typically isn’t going to be negatively impacted very much, if at all, by moving to Kanban workflow management. This is because the system will be streamlined and improved so that the products can be made quickly upon order. Once the products are created, they will be delivered directly to the customer with no need to send them to a warehouse for storage.

If the warehouse is located further away from the customer than the manufacturing facility, it could even reduce the lead time in some cases, and that isn’t even accounting for increased efficiency.

Improved Customization

Even when the lead time is slightly increased, customers tend to be much happier with the results because they will be ordering their products exactly as they need them. They will know that their products aren’t old or outdated since they were sitting in a warehouse until the order came through. The advantages of Kanban can translate to a dramatically improved service for your customers.

 

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Additional Resources

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Kanban Guide
 
Lean Manufacturing Powerpoint
 
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