Kanban is the concept of using visual signals to manage levels of work in process. Its goal is to ensure just the right amount of inventory between operations. Too much inventory is wasteful resulting in excess carrying costs, obsolescence issues and even storage problems on the production floor. Too little inventory can result in an operation being starved if there is a disruption in upstream production.
Work in process isn’t the only resource that can be provided in too much or too little quantity at an operation. Too much or too little labor at an operation also results in waste. Too much labor results in excess cost added to the product or overhead costs. Too little labor starves an operation resulting in delays or expediting costs just as a shortage of materials does.
With the success many manufacturers (and retailers) have had using kan-ban techniques in setting the right levels of material in production, can that concept be used to also set the right level of labor at an operation?
There are two steps to consider in workforce kanban. First is identifying the right level of direct and indirect labor. Direct labor is the people actually performing the operation. Indirect labor supporting the line might consist of material handlers, clean-up crews or maintenance mechanics for changeovers or machine breakdown. The second step is understanding what to do when there is an excess or a shortage of labor.
With inventory, the material is often separated into red, yellow and green zones. Over time if the inventory never leaves the green zone, it’s an indication that there might be too much. If the operator is regularly in the red zone or running out, it’s an indication there might be a need for more inventory. Operators also know to signal for more material when they reach the yellow zone.
The first step for the workforce kanban is determining the size of the red yellow and green zones. Comparing workload (converted to labor demand in hours) to scheduled hours is one method. Below is an example of a real time report that provides workforce kanban for a distribution center. Supervisors can easily see where there is too much or too little labor at a particular location based on the workload.
The second step requires supervisors to make a decision. Should the people currently working at the site be re-balanced (are they flexible enough in terms of skills, certifications and work rules?). Is more capacity required…call or transfer someone in? Or if there’s too much capacity is it possible to send someone home or have them begin working somewhere else where they are needed?
By providing visible indications of staffing levels, the same benefits of reduced inventory can be realized with labor: Improved resource utilization resulting in higher productivity.