Inventory Management: Gaining Control with Kanban

June 15, 2021

Updated February 10, 2023

People-first processes designed with simplicity in mind drive compliance. Implementing improvements and gaining control of your inventory doesn’t need to be overly complicated. In fact, the simpler, the better. With fit-for-purpose systems and workflows, a little work goes a long way.

Languishing inventory that sits in a stock room rather than being used causes waste. Implementing Just-in-Time inventory systems helps to reduce this waste, improve productivity and increase efficiencies.

Read on to find out if Kanban is a good fit for your business and your supplies and for guidance on how to implement it effectively.

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Kanban, What it is and Where it Came From

If you’ve been to a grocery store and have seen the cards (also referred to as tags) at the end of a row of cans, then you’ve seen a Kanban system and have likely garnered some idea of how it works. In Japanese, the word kanban means billboard or signboard. A valuable Lean tool in achieving just-in-time (JIT) inventory, Kanban is a visual method for managing inventory flow by physically establishing a reorder or restock point. 

Since its inception, Kanban has been adopted for many different applications by many different industries. Although industrial engineer Taiichi Ohno originally developed it at Toyota, today, the method is recognized by businesses across industries. 

Its derivative, Personal Kanban, is essentially a “live,” interactive to-do list made out of sticky notes. Although it may sound unimpressive, like Kanban, its genius is in its simplicity. Personal Kanban is an extremely effective way to manage and prioritize workflow or team projects, helping to keep people focused on the most imperative tasks.

The Kanban Inventory Management Method, How it Works

Much like using Reorder Point (ROP) and Reorder Quantity (ROQ), the kanban inventory management method is designed to allow you to hold the minimum amount of inventory on hand that is necessary while avoiding stockouts and production disruptions. 

Kanban works on the same principle, ordering a pre-established quantity when you get to a set inventory level. The main difference being Kanban is a physical system, and ROP/ROQ is systems-based. 

Kanban is a pull (demand-driven) system, meaning the purchasing signal isn’t reliant on estimated or forecasted usage but rather on the actual physical movement of the product. Those cards you see on the store shelves? Those are Kanban cards that trigger an order to be placed once a certain quantity is left in stock. 

Is Kanban a Good Fit?

Implementing an inventory control system that monitors the status of your supply stock in real-time with preset ROP and ROQ to trigger replenishment orders is a great way to implement JIT and, indeed, a great goal. However, it may take some time to achieve. In the meantime, Kanban may offer a faster alternative that may not offer all the benefits of a digital system but does allow you to implement at least some improvements more quickly.

As we’ve alluded to, carrying high inventory on your dental supplies is costly, running between 20 and 30% of the total cost of inventory while also tying up your cash, so it’s something you want to avoid.

Using Kanban can help you do just that, ensuring you don’t over or under-purchase. But the system isn’t bulletproof. As the trigger point is based on average usage, any large spikes in requirements are not accounted for and may cause a shortage. Kanban is, therefore, best suited for items that have a relatively level and stable demand, making staple items that are regularly consumed and replenished the perfect fit.

Intro to Using Kanban for Your Dental Practice

Setting up Kanban is a reasonably straightforward process. First, you’ll want to calculate your ROP and ROQ points for the items where you want to use Kanban. For more help and some handy formulas, see How to Know When to Buy Dental Supplies for Your Practice.

Then, grab some tags, and follow a few relatively easy-to-follow rules:

Rule #1: Never pass on defective dental products. Upon receiving, and preferably before signing the packing slip, deliveries should be looked over and confirmed to be accurate (what you ordered) and fit for use. Pushing damaged or incorrect product upstream puts you at risk of a shortage, as well as risking having to pay for unusable items. 

Rule #2: Only take what you need. Do not hoard or keep your dental items in various locations. Remember the toilet paper scare of 2020? Kanban is not built to withstand spikes in demand. Falsifying demand by pulling supply to hold in secondary areas rather than use causes over-buying and creates waste, hurting your bottom line. 

Your Kanban tags should be placed at the reorder point and contain the following information:

  • The item identifier (supplier SKU or manufacturer number)
  • The reorder quantity
  • Who or where the card should go to
  • Any additional information you feel the buyer will need to place the order for more dental products

For Ultimate Efficiencies, Pair Kanban with Method

To achieve sustainable results and ease your dental supply ordering, implementing new systems and processes must be done with a “real-world” mindset. More mature inventory control and dental procurement procedures, such as Method’s system-based ordering processes that utilize reorder points come with added benefits. And ultimately, we believe that should be your goal. 

In the meantime, however, keeping it simple with tools like Kanban is one step in calming the chaos in your dental office and jetting you off in the right direction toward better dental procurement and improved dental supplies management.

Whether you choose to implement Kanban or move right into a digital inventory management system complete with barcode scanning, Method can help you determine and implement what is right for your business. And most importantly, we’re there for you in the long haul, offering scaleable, efficient processes, pro-active order approval processes, a user-friendly marketplace that makes smart buying (and cost-saving) easy, and much more.

For more information, contact Method to discuss how our tools can help you achieve Kanban principles and streamline your dental procurement process!

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Learn how Method Procurement's spend management solutions can improve your bottom line. Get in touch with our team today or request a demo to see it for yourself.