Kanban

Kanban is any signaling device that gives authorization for a supplying process to know what to produce, or for a material handler to know what items to replenish. For example: a physical paper card placed in a container of parts. When stored items are actually used, the Kanban card gets “freed” (perhaps it was in the bottom of the container), and gets put back into a Kanban stand where the Kanban “requests” are fulfilled.

Kanban is a way of limiting work in process and the amount of new work that is introduced into the process. As a result, work would be pulled from the previous stage as work is completed and levels demand. It emphasizes throughput rather than numbers. If you have read my previous posts, you would recognize the emphasis I put on throughput and the need for this to be monitored in the sales and marketing process.

Most people think about the marketing process as a function of lead generation and follow-up. They envision the marketing funnel which creates an excellent visual image of collecting prospects and narrowing the field till you produce a customer at the bottom. This image is often times a fair reflection of your marketing budget. You spend most of your money reaching out to the masses. It is an expensive proposition and seldom produces measurable results. However, you can’t just cap the funnel because you never know where your next lead or sale will come from.

The job of marketing is to increase prospects, create better odds in obtaining a customer, and increase the number and dollars per customer. I believe marketing is also responsible for decreasing the dollars in obtaining a customer. I think these five parts can be best served through Lean and more specifically using a Marketing Kanban.

If you introduce Lean into marketing it will not take too long before you are creating a Value Stream Map of the process. Most marketing people do not look at marketing as a process so it may take a seasoned mapper to facilitate. Without drilling down too far in the process you can gather numbers of prospects in each segment and the conversion rates as they proceed through your value stream. Typically to accomplish this you must use only one marketing channel at a time or segment your list by a category. When first mapping the process, use the best defined channel so that you do not fight the process.  The Value Stream Map created will be the outline for your Kanban.

Kanban has recently been used in Lean Software development as a way of limiting work in process and the amount of new work that is introduced into the process. As a result, work would be pulled from the previous stage as work is completed and levels demand. It emphasizes throughput rather than numbers. If you have read my previous posts, you would recognize the emphasis I put on throughput and the need for this to be monitored in the sales and marketing process.

I have established an abbreviated beginning and endpoint for clarity. Someone visits your website, signs up for your e-zine and is channeled to your Auto-responder that induces them to a Webinar. What makes this procedure effective is those numbers in the parenthesizes, your number of prospects that are in that particular segment of your value stream. As tasks are completed either for groups, categories or even individuals they are queued for the next stage.

Adhering to this process limits your work in a given stage. In Lean manufacturing we believe that limiting your Work in Process (WIP) is a good thing. It is also a good thing in Sales and Marketing. If you control the amount of work in your process you will respond to your prospects needs more efficiently and as a result increase throughput. Improving throughput is the quickest way to accelerate sales and as a result increase revenue.

Utilizing the Kanban provides a visual indicator to your WIP and as a result demonstrates exactly what is happening within your marketing cycle. It also allows you to visually see where your constraint is in your process (I used a horizontal hourglass to depict the constraint in the picture).  At that point you can allocate resources, create divergent paths, perform triage in the preceding queue or as we would say in the Theory of Constraint world; elevate the constraint.

Don’t think of Kanban as a planning tool; think about it as an execution tool. Improving your marketing process does not have to constitute wholesale changes nor increased spending. Getting more customers into your Marketing “Kanban” may not solve anything at all. Improving what you do and increasing the speed that you do it may result in an increase in sales and decrease in expenses. That’s marketing!

The Reasons for a Kanban can be summed up in these previous posts:

Improve your Marketing Cycle, Increase your Revenue : Speed is important in the buying process. Your total cycle time can be improved. However, it seldom can be done without more feedback loops in your system. Develop process blitzes to reduce these non-value times. Go to Gemba or the customer’s place of work and find out what happens during this time. See what is stopping them from moving forward. It may be an internal constraint within their company. However, the constraint may be yours. You may not be responding to the customer’s latest needs. Your ability to focus your resources on the customer needs may provide the overall clarity he needs this to make a more rapid decision.

Improve throughput, cut your customers in half!: In a manufacturing system cutting WIP just about always will increase throughput. Why? You end up working only on what is needed and when it is needed. You also will have less waste, less material to handle and fewer mistakes. Good things happen when you are not handling excessive amount of material. In a marketing system cutting the amount of customers in half works very much the same way. You end up working on what a customer truly needs and wants. Your marketing will become more personal, more direct, and fewer mistakes.

Using the Six Sigma Tollgate in your Marketing Funnel: Have you thought of using DMAIC as a way of defining your marketing funnel? We looked at Define, Measure, Analyze, Improve and Control and utilized these basic principles to walk a customer through the marketing funnel. In other posts, I discussed the ability to create a shorter cycle time by decreasing the non-value time in between each of these stages. One of the methods of doing this is to have a strong call to action for a prospect to move from one stage to the next. However, how do you know if a customer is ready to move from one stage to the next?

What kind of questions would you ask at a tollgate?: In a recent post, using the Six Sigma Tollgate in your Marketing Funnel I went through the concept of using a tollgate in your marketing funnel. Below is a list of questions that might help general a few ideas that you may want to consider. (Review Post) The essential points needed in a Kanban system are:

  1. Stock points
  2. Replenishment Signal
  3. Quick Feedback
  4. Frequent Replenishment

If you would consider the typical marketing cycle as a prospect moves from one stage to another, you imagine it as step by step process and certain events taking place within that stage. With a Kanban method or a tollgate you could have certain trigger points for each stage or even a phase within that stage allowing one marketing effort to pull from the previous. The method would also limit the number of prospects within that cycle so that the proper amount could be managed or more importantly satisfied! Or, you could have an unlimited supply of leads flowing into each stage? You probably wish you had the latter. However, which would prove more effective.

I recommend  reading Kanban by David Anderson,for any discipline looking at introducing Kanban. David is truly an expert in Kanban and I highly .

What I enjoyed about the book more than anything else was the delivery of the material. It was not overly analytical nor was it written in story form (so that I could get it). It seems to have just the proper mixture of short case studies and instruction. However, what was apparent was that the author is very comfortable in his subject matter. I am always amazed by people that are truly grounded in their knowledge of a subject. Their ease in raising questions and casual reference to others to stimulate thought is the true mark of an expert. I create the analogy to sports. Many superstars are superior athletes but the true great ones have the ability to make the entire team better. I think they call them champions. David comes across as someone that is truly striving for continuous improvement and I believe that he is a champion of Kanban.

One of my takeaways from the book is the outline David uses for Bootstrapping the Kanban.

  1. Agree on set of goals for introducing Kanban
  2. Map the value stream
  3. Defining the entry point
  4. Define the exit point
  5. Define the work item types
  6. Analyze the demand for each work item type
  7. Meet with the upstream and downstream stakeholders
  8. Create a board/card wall to track the value stream
  9. Optionally, create an electronic system to track and report
  10. Agree with the team to have a standup meeting daily
  11. Agree to a regular operations review meeting
  12. Educate the team on the new board, WIP limits, and pull systems.

As David says in his book: “This guide cover has been developed based on real experience and validated by several early adopters of Kanban, both those who followed the steps and were successful and those who recognized that their partial failure could have been prevented had this guide been available at the time.” David goes on to say, “This guide is provided in part to draw attention to the difference between Kanban and earlier Agile development methods. Kanban requires a collaborative engagement with the wider value chain and the middle(senior) management from the start. The unilateral grassroots adoption of Kanban without first building the consensus of managers external to the immediate team will have only limited success and delivered limited benefits to the business.”

Even though I have read this book, it keeps getting queued up to be read again.

P.S. The Kanban book is a keeper.

Below is a Transcript of a podcast I had with David where we discussed Kanban.


Kanban

Background for this post came from the book Kanban Made Simple


Kanban Lessons from a Software Developer


Personal Kanban