The concept of Kanban (Japanese for visual sign or card) originally came from supermarkets. In the late 1940s, Toyota studied the supermarkets and adapted the same Kanban principles for their production facilities. Ever since then, Kanban has been used as part of LEAN processes in manufacturing facilities throughout the world.
How the Kanban System Works
Here’s a quick definition of how Kanban works:
Kanban aligns inventory levels with actual consumption; a signal is sent to produce and/or deliver a new shipment when material is consumed. These signals are tracked through the replenishment cycle, bringing visibility to the supplier, the consumer and the buyer.
Bringing Kanban from Material Handling to Healthcare
What’s happening now is that Kanban is not only being used in material handling…it’s being used in healthcare facilities. But why? It’s simple really – managing materials is just like managing medical products.
In both instances, you supply exactly what’s needed, when it’s needed, and in the amount needed. For manufacturing and material handling this refers to parts; whereas, for healthcare this refers to medical supplies and products.
Why You Should Use Kanban for Managing Medical Products
If you’re healthcare facility is still using a PAR system to manage medical products, here are some reasons you should switch to Kanban.
1. No Daily Counting Saves Labor Costs
Using a fixed quantity and a dedicated location (ex. bins) eliminates the need for daily counting. Once the bin is emptied the same quantity is replenished. No counting saves on labor costs because staff can be more productive in other areas.
2. Reduces Re-Supply Trips
Each bin only needs to be replenished when it runs out. By filling the bins with enough supplies for a whole day, you can reduce the number of re-supply trips.
3. Medical Products are Always On-Hand
Because Kanban uses a two-bin system for stocking supplies, there are always going to be medical products on-hand. Nurses will no longer have to deal with stock-outs that cause them to make special requests to materials management or grabs supplies from a different room.
4. First-In, First-Out Reduces Expired Medical Products
Kanban promotes the first-in, first-out system, in effect, rotating medical products so that no item is left on the shelf too long. Not only does this save time, it reduces the costs associated with expired medical products.
5. Shows Patterns & Adjusts to Changes
Over time, the Kanban system will show patterns such as which medical products are used most often. This allows you to better manage your stock levels. Quantities can be easily refined and adjusted based on their usage patterns.
6. Promotes Good Inventory Management
Most PAR level inventory management is actually done by eyeballing the quantity of items needed; counting is almost impossible and very labor intensive. With Kanban, you automate this process to promote better inventory management and take out any guess work.
How to Set Up a Kanban System in Your Healthcare Facility
Once you’ve decided to switch to Kanban system, the next step is getting set up. Come back later this week, to read about 2 different ways you can set up a Kanban system. UPDATE! You can find the second part of this series on Kanban here.
Until then, if you have any questions about Kanban or want to learn more, give us a call at 1-800-803-1083 or send us a message.