How Kanban Works (The Only Introduction You’ll Ever Need)

Kanban is a process improvement method that comes from lean production.

Kanban works by visualizing the workflow and the work that passes through it. Using the 9 values, 4 principles, and 6 core practices of Kanban, a team can then make continuous improvements to that process by focusing on customer value and eliminating waste.

Of all lean methods and agile practices, Kanban is arguably my personal favorite because it’s simple, powerful, and flexible. It doesn’t prescribe any roles or events, only a small number of artifacts. Instead, it presumes that you already have some process in place (formalized or not) and helps you to visualize and improve it.

In the rest of this post, I’m going to demonstrate to you why and give you a couple of simple and practical examples for how organizations and teams across sectors can implement Kanban to boost customer satisfaction and improve profitability today.

What Is Kanban?

Search for the meaning on Kanban online, and you’re going to see many—often conflicting—definitions. Wikipedians call it a scheduling system. Collaboration software maker Atlassian refers to it as a popular framework. Others call it a visual system for managing work. What is Kanban, exactly?

In its simplest form, Kanban is a process improvement method. Organizations, teams, and individuals can use Kanban to achieve greater customer satisfaction and higher profitability by visualizing the flow of value and continuously improving it, so that they do more of the activities that deliver value and eliminate the ones that create waste.

Contrary to popular belief, Kanban isn’t really a framework. Unlike the typical agile or lean framework, Kanban doesn’t prescribe a set of roles or events. Nor does it set any rules for how they relate to each other. Kanban is a method that helps you visualize the steps in a process—making the work items required to turn inputs to outputs visible. In doing so, Kanban helps you to:

• Manage the flow of value by visualizing bottlenecks (when many work items start piling up in a step that doesn’t have sufficient throughput);
• Streamline the flow of value, achieving a continuous and sustainable pace of delivery, by making small incremental improvements to the process every single day.

This is why Kanban is so powerful. Unlike a framework, it doesn’t require you to adopt completely different roles or events compared to your ways of working today. Kanban is universally applicable. It’s just a tool that helps you make your ways of working visible, surfacing which aspects of your delivery process work and which ones don’t.

Where Kanban Comes From

Kanban comes from lean production. Lean production is a movement among Japanese manufacturing companies in the 20th century.

Lean production started in the 1930s when Toyota’s management team—with the objective to make the vehicles ordered by customers in the quickest and most efficient way—created the Toyota Production System.

Toyota Production System is based on two Japanese management philosophies: “jidoka,” which means automation with a human touch; and “just-in-time manufacturing,” in which each process produces only what is needed for the next process in a continuous flow of value that aims to eliminate waste.

The Toyota Production System turned into the lean production movement when, in the fall edition of Sloan Management Review in 1988, John Krafcik published an article called “Triumph of the Lean Production System.”

“The research findings reported in this article,” the Editor of the magazine at the time wrote, “will help to overturn a common myth about the auto industry: that productivity and quality levels are determined by an assembly plant’s location. In reality there exists a wide range of performance levels among Japanese, North American, and European plants. Corporate parentage and culture do appear to be correlated with plant performance; the level of technology does not.”

With “Triumph of the Lean Production System,” Krafcik coined the term “lean production” and made it clearly visible to the Western managerial community that the management team within an organization—and the corporate culture that they create—are as important to success of that organization as the people, process, and technology that they manage.

An organization, therefore, is only as competitive and as profitable as its management team enables it to be. “We have found overwhelming evidence,” Krafcik wrote, “that high technology is often not the solution to poor manufacturing performance if the technology is not employed without a suitable production management policy. The messages here are important ones, not just for manufacturing managers, but for all those interested in the future of industry.”

The lean production method requires that companies develop a well-trained and flexible workforce; product designs that are easy to build with high quality; and a supportive and  high-performance network of suppliers.

What Is the Theory Behind Kanban?

Kanban practitioners apply the Kanban process improvement method following the 9 values, 4 principles, and 6 practices of Kanban.

The values of Kanban power the mindset of lean practitioners. The principles are the philosophy that this mindset gives birth to. The practices are the actionable ways in which Kanban practitioners apply the mindset and philosophy in the real world.

When it comes to Kanban, the whole is greater than the sum of its parts. Applying any of the values, principles, or practices sporadically and separately will not yield the same outcome as applying them continuously and holistically.

The 9 Values of Kanban

The Kanban process improvement method has nine values:

1. Transparency. What is hidden cannot be visualized, measured, and improved. To improve a process, you need to make the inputs, workflow, work items, outputs, cycle time, and lead time transparent to everyone involved.

2. Balance. Uneven or interrupted flow caused from waiting times between steps, rework, and an overworked team prevent you from achieving a sustainable pace.

3. Collaboration. The best improvements come from individuals that work together, teams that collaborate with each other, and organizations and/or suppliers that partner with one another. Hierarchism, nepotism, and politics cause waste and noise, not flow and clarity.

4. Customer focus. An organization exists to deliver value to the customer. Value is increased from quality, consistency, and timeliness in all customer interactions; and decreased from issues, waste, and delays.

5. Workflow. Everything that an organization does is part of a workflow. A workflow has a start, and end, inputs, and outputs. Within the workflow there are steps, within each step are work items. Only when you look at the organization as a system of workflows can you become the designer of these workflows.

6. Leadership. Leadership, by every person employed by the organization, whether they have managerial responsibilities or not, is essential for achieving continuous flow of value and a sustained pace of delivery.

7. Understanding. Self-knowledge by the individual, team, and the organization are the start of every change. No change is possible or effective if done without the consciousness about the problem or weakness at hand and the purposefulness to resolve it for the long term.

8. Agreement. All people involved in a system agree to take all actions that they can to visualize and continuously improve the flow of value, even when that requires painful introspections and difficult conversations.

9. Respect. Value, understand, and respect everyone working within the organization. Change that comes from respect and trust lasts longer and yields greater results than change that comes from disregard and doubt.

The 4 Principles of Kanban

The Kanban process improvement method has four principles:

1. Start with what you’re doing today. When you first apply the Kanban method, you start with what your organization is doing today. Visualize all processes in their current state, which will help you surface all causes of bottlenecks, inefficiency, and waste.

2. Agree to pursue incremental improvement through evolutionary change. Kanban is about systems thinking and scientific experimentation. To apply Kanban, everyone involved needs to think and act like a scientist focused on incremental change.

3. Initially, respect all current roles, responsibilities, and job titles. The Kanban way is not about making big changes fast. When you apply Kanban, you start by visualizing and understanding the processes, roles, responsibilities, and job titles that exist in the organization as they do today. Informed change can happen only after a good understanding has been established.

4. Encourage acts of leadership at every level. Leadership and ownership are practiced by everyone in the organization, whether they have a managerial role or not. The more effective (doing the right things) and efficient (doing the things right) the organization, the more satisfying the work and profitable the outcome for everyone working within it.

The 6 Core Practices of Kanban

The Kanban process improvement method has six core practices. As you’re going to see, each of the six practices revolves around breaking down work into small and self-contained work items—and visualizing them on a board.

The six core practices of Kanban are:

1. Make work visible. Kanban practitioners make work visible by breaking work down into work items called “cards” and placing them on a “kanban board.” A kanban board has columns, which represent the stages that cards go through as they move from idea to completion.

2. Limit work in progress. Every column on the board represents a stage that one person, a team, or a supplier needs to do. Naturally, there’s a capacity limit to the amount of work that can be done simultaneously. The Kanban practitioner limits work in progress by setting a limit for the number of items in a single stage at any moment of time. This makes it easy to identify when bottlenecks appear.

3. Manage the flow of work. The Kanban practitioner aims to achieve continuous flow of value from left to right and a sustainable pace of delivery. Their choices and actions are focused on managing and improving the flow of work—and not on “heroic” and one-time attempts to push out as many work items as possible at the expense of product quality or workforce burnout.

4. Make process policies explicit. To achieve flawless delivery of value at every stage of the process, you need to make process policies clear and known to everyone involved in its execution. Process policies are guidelines, at the level of specificity and detail useful to the organization, team, and individual at hand, about how to do the work. Process policies can manifest themselves in the form of Standard Operating Procedures (SOPs), Definitions of Ready (DoR), Definitions of Done (DoD), or any other way that standardizes the requirements for a work item to progress from one stage to another.

5. Implement feedback loops. Your car’s AC works based on feedback loops. Say that it’s winter and you just got in the car. You set the AC to 75°F and the AC begins to heat the air in the cabin. As the temperature gets close to 75°F, the thermostat turns the heating down. After a while, the temperature will drop, and the thermostat will turn the heating back up again. As a Kanban practitioner, you also use feedback loops to inspect your system frequently and introduce changes when it breaks or enhancements when they’re possible.

6. Improve collaboratively, evolve experimentally. A Kanban system is owned by the team that uses it to manage the flow of their work. Which is why improvements and changes are best done by the people in the team. In Kanban, the team owns the flow of value in their process—and members of all seniority and roles are encouraged to improve it.

How Kanban Works

Organizations, teams, and individuals that use Kanban start by visualizing the way they currently work—making incremental and continuous improvements to their process. To do so, they use the tools in the Kanban practitioner’s toolbox, which consists of Kanban’s values, principles, and practices.

Start With What You’re Doing Today

Say that I’m going to use Kanban to manage the editorial process for Get Agile Right. When implementing Kanban for the first time, the Kanban practitioner starts by understanding the process in its as-is state. In the case of this blog, there’s generally eight stages that each article goes through from idea to the screens of our readers:

1. Idea. We follow our own research process to understand what questions agile practitioners are asking online and come up with ideas for topics to write about. When an idea meets our criteria, it ends up as a card here.
2. Assigned to author. Kanban is a pull system. A Kanban team “pulls” tasks from left to right (picking up the tasks on the top first) as the team’s members have capacity to complete them. When an author has the capacity to pick up an article, they pull the card on the top and assign it to themselves.
3. Drafting. When an author starts to research the topic in depth and draft version 1 of an article, they move the card from “Assigned to author” to “Drafting.”
4. Proofreading. When an author is done with version 1 of an article, they move it to drafting. Our editor picks it up and reviews the article, leaving their comments for the author. 
5. Publishing on site. When the final draft is ready, the editor imports it in WordPress, our Content Management System, and follows a specific procedure to select and upload a featured image, assign the post with a category and tags, and publish it.
6. Sharing on social media. When the post is published, our social media person takes the link and follows a specific procedure to schedule social media shares on Buffer, our social media scheduling tool.
7. Done. Once a post is written, proofread, published, and shared, our work on it is done.

Next, I need to create my Kanban board. I could use a whiteboard and sticky notes if I were working in one office with my editorial team. However, we are a remote and distributed team, so we’re going to use an online tool. My personal favorite for most projects is Atlassian’s Jira. However, for the sake of simplicity, we’re going to use their trimmed-down team collaboration tool, Trello.

Here’s version 1.0 of our new Kanban board: https://trello.com/b/C2g9eg39/editorial-kanban. 

Each column on the board represents one of the eight states that an article needs to go through before it’s considered done. Each card on the board represents one article that’s somewhere along Get Agile Right’s editorial process.

Kanban practitioners know what creates value for the customer and how they deliver value to customers stage by stage. This helps them to identify what stages and ways of working work especially well, and where waste is caused by inefficiencies, unevenness, and interruptions.

Pursue Incremental Improvement Through Evolutionary Change

Say that we use version 1.0 of our editorial kanban board for a month. In tune with the fifth core practice of Kanban, the whole team meets up to discuss what on the editorial kanban board is useful for us and what it’s necessarily working. We identify that our current workflow is actually missing some steps that articles go through. One of the most critical challenges of a Kanban team is to keep their kanban board and stages on it as close to how work is actually done as it can. This is the only way to bring in transparency and identify sources of waste.

So we decide to create version 1.1 of the kanban board by adding a number of new columns to it. The board is becoming horizontally long, but highly useful to our team:

1. Idea
2. Assigned to author
3. Creating first draft
4. Ready to proofread
5. Proofreading
6. Ready to edit
7. Creating final draft
8. Final draft ready
9. Publishing on site
10. Sharing on social 
11. Done

Check out version 1.1 of our editorial kanban board on Trello: https://trello.com/b/h8E1Mvei/editorial-kanban-11.

As you can see on our updated editorial kanban board, we’ve now introduced stages for “Ready to proofread” and “Ready to edit” in-between the first draft and final drafts. We made these two changes after observing that:

• An author could be ready with the first draft of an article and be able to move on to writing drafts of other articles on the editorial board. However, the editor could be busy proofreading drafts of articles that had already been pushed through the pipeline;
• An editor could be done proofreading a first draft of an author’s article and move on to others, but that author could already be working on the first drafts of other articles and be temporarily unable to turn it into a final draft.

After we visualized the actual state of an article in-between drafts, it became easier for the authors and editors to achieve flow. Authors could see when editors were busy proofreading too many articles, so they would focus on turning the ones that were already proofread into final drafts. When the pipeline would begin to free up, they would focus on making first drafts again. 

Over time, the editorial team came to a unique rhythm of its own. To sustain the rhythm, we introduced limits on work in progress on the stages where capacity constraints were at hand:

• Idea | No WIP limit 
• Assigned to author | No WIP limit
• Creating first draft | Work in progress (WIP) limit = 5 cards
• Ready to proofread | WIP limit = 5 cards
• Proofreading | WIP limit = 5 cards
• Ready to edit | WIP limit = 5 cards
• Creating final draft | WIP limit = 5 cards
• Final draft ready | WIP limit = 5 cards
• Publishing on site | WIP limit = 10 cards
• Sharing on social | WIP limit = 10 cards
• Done | No WIP limit

Say that a bottleneck happens. For example, each of our authors picked up a topic they’re highly fluent on and an article that they found it really easy to write about. Because of that, it took them 50% less effort and time than usual to push out the cards through the system. 

Increased productivity, albeit temporarily, is always a good thing. But it created a bottleneck of seven cards in the “Ready to proofread” column, making the flow of value (high-quality reading materials for our readers) uneven. Here’s how that bottleneck looks like: https://trello.com/b/83tvbCfr/editorial-kanban-12 

When a bottleneck appears on a Kanban team’s board, all of the team’s members stop sending cards from left to right (to avoid further pileup of cards in the bottlenecked column) and swarm on eliminating the bottleneck with the most practical means possible. In our case, the authors will stop creating first drafts of new articles and help our editors in proofreading the existing ones.

Initially, Respect All Roles, Responsibilities, and Job Titles

Notice that our adoption of Kanban didn’t really create any disruptive change. At least not the change that’s typical in big-bang reorgs or adoptions of agile frameworks like Scrum or Extreme Programming (XP).

The editorial kanban simply started out as a tool to help us visualize our workflow and workload on a Trello board. From the second or third day of using the tool, it felt for everyone like it had always been there. And any changes that we made along the way were after we had surfaced inefficiencies and came up with the best ways to remove them as an editorial team.

Encourage Acts of Leadership at All Levels

Kanban is as much an art as it is a science. 

An art because there is no single and true way to improve the efficiency of a process; it requires a certain set of creativity by the organization, team, and individual. 

A science because the efficiency in its current state can be measured; and any changes can be litmus-tested with the same approach that experimental scientists test out their hypotheses.

In a Kanban system, everyone involved is the artist and the scientist. And everyone is encouraged to perform acts of leadership at all levels. To enable this, we give our editorial team visibility and measurability into the efficiency of our editorial process.

To achieve this, we measure two metrics:

• Lead time, or the total time needed to publish an article from idea to completion;
• Cycle time, or the time the article spent in each stage (column) of our Kanban board.

At the end of the day, lead time is what matters to our readers. If we identify ways to publish as informative articles faster, our readers benefit (and our blog benefits from having more readers). 

But that improvement will only be visible to our community of readers if we work on our editorial process holistically and make sure that improvements in one of the cycles (like creating first drafts) don’t end up causing degradations in one of the subsequent cycles (like editing the first drafts).

Lead time is what customers see. Cycle time is what the team uses to engineer their process. We measure cycle time as the number of hours a card spends in each state, and lead time as the total number of hours for each card since inception to completion.

The Tools of Kanban

Kanban Board

The kanban board is a tool that a Kanban team uses to visualize their process. The kanban board consists of columns and cards. The columns represent the stages that work items go through as they move from idea to done (from left to right). The cards are individual work items.

A kanban board can be as simple as a whiteboard with drawn columns and sticky notes for cards. And it can be as complicated as a fine-tuned implementation of Atlassian Jira that’s integrated to a team’s third-party systems.

If your team is just getting started with Kanban, just pick a starting point and start to visualize your process. The “secret” to making your kanban board work is to make the columns reflect your actual delivery process as close as possible.

Above, I created an example kanban board for a pizza shop in Lucidchart, my favorite diagram tool.

Work In Progress (WIP) Limits

You now have a kanban board and the columns of the board represent the stages that work moves through in your workflow as closely to reality as possible. No matter if these stages are executed by humans and/or machines, it is only natural that most of them have capacity constraints.

In other words, each column has a throughput. You can assume, forecast, or estimate a system’s throughput in many ways, but the most accurate way to calculate it is to let the system run for enough time, so that you have information about the average throughput for each column:

Throughput (TH) = Number of cards produced in a given cycle in a single unit of time

This is the best formula to help you calculate throughput because it is agnostic from the conditions behind the throughout. Let’s see how it helped us determine WIP limits on our pizzeria kanban:

We implemented and observed our pizzeria kanban for a week and our staff identified the following constraints:

1. A pizzaiolo (pizza chef) could only stretch the dough and top 3 pizzas at a time;
2. The pizza oven could only bake 5 pizzas at a time;
3. The delivery person could only carry 10 pizza boxes at a time.

Knowing these WIP limits—and not producing more cards from left to right when a stage in our process came across capacity constraints—helped our team to achieve a smooth flow of pizza making and delivery. When a bottleneck formed, the team stormed on removing it in the most practical way possible.

Cycle Time & Lead Time

Cycle Time (CT) is the total time that it took our team to make one pizza, from the moment the customer ordered it to the moment it’s handed over to them by our delivery person.

Lead Time (LT) is the amount of time that each pizza spends in each of the columns.

Since our team kept coming up with ideas on how to improve the flow and we were measuring Cycle Time and Lead Time, we could adopt a scientific approach to becoming better pizza makers: we could test each idea as a hypothesis and see, in a given period of time, if it made Cycle and/or Lead Time shorter, longer, or not much different.

Cumulative Flow Diagram (CFD)

The Cumulative Flow Diagram (CFD) is a chart that visualizes the total number of work items in progress for a given time period:

The purpose of a CFD is to show your team how even the flow is—and help them identify opportunities for improvements that can smooth out any unevenness.

The key to using CFDs well is to look for patterns that indicate a problem. The kanban board shows you the current state of your process. The CFD lets you look at how the entire process is performing in a given time horizon.

Usually, a CFD represents the number of cards on the vertical axis and the timeline on the horizontal axis. The timeline that makes the most sense depends on the cyclicity of your business. 

Our pizzeria will be looking at a CFD for every 30 or 60 minutes because the turnover of pizzas is big. A corporate sales team may be looking at a CFD every Quarter, Half-Year, or Year since their deals take time to mature and execute.

Where Is Kanban Used?

In my professional experience, I’ve had the opportunity to work in and with companies that operate in a variety of industries; from industrial engineering and defense & aerospace to Software-as-a-Service (SaaS) and consumer tech. Curiously enough, I’ve seen Kanban applications in all of them.

Kanban is a process improvement method used by companies, large and small, across geographies and industries. Though Kanban started in manufacturing and grew popular thanks to the lean production movement, it is just as applicable for improving flow in government, healthcare, technology, and organizations in practically any vertical.

For example, I used to work for a consulting firm that provided IT services to some of the biggest defense & aerospace manufacturers in the world. And I had the privilege to visit their production plants often as we worked on various Industrial Internet of Things (IIoT) software systems for their manufacturing needs.

I’ve seen some of the best Kanban applications at the shop floors of these manufacturing companies. Every minute, visual boards on large screens would visualize production orders and their overall status as the individual work items to deliver them would flow from one machine to another, as the organization measured the cycle times and lead teams of each item in the workflow.

I’ve helped production support teams implement Kanban to streamline their ways of working and become highly responsive to customer tickets—even as they’re wearing their firefighter hats on and battling Priority 1 incidents on business-critical software systems implemented at Fortune 500 companies. Over time, the change in flow and pace that they achieved led to improved employee engagement and greater customer satisfaction.

Kanban University, one of the organizations that actively promote Kanban and lean management, has a good list of case studies for Kanban uses available on their website. That includes online fashion retailer Net-a-Porter, investment advisor Vanguard, the second-largest Spanish bank BBVA, as well as the Land Surveying and Geospatial Agency at Brandenburg, Germany.

Kanban is one of those methods that isn’t limited to a specific geography or industry, which is why it can be so powerful.

The Bottom Line

Kanban is a process improvement method. It doesn’t give you roles or events. Only a small number of artifacts.

It doesn’t tell you how to manage your project like Scrum or build your software like Extreme Programming (XP). 

Instead, Kanban is a set of simple but powerful values, principles, and practices that any practitioner can use to visualize and improve the flow of value of any organization or team.

Kanban originated in lean production and is widely used by manufacturers for managing their shop floors. But case studies by some of the world’s best Kanban consultancies show that it’s just as well used by teams in banking and financial services, sales, marketing, software, and others.

Understand the values, principles, and practices of Kanban, then find a starting point and get started from there. Visualize the flow of value and have your entire team begin to identify opportunities for small and incremental improvements. Added together over time, these improvements will lead to marginal efficiency gains for your team (and the organization that sponsors it).