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Kanban innovation: stock and flow

What is Kanban?
Kanban is a way to make work in progress visible. By tracking, tracing and visualizing the stock (the in- and outflow) the end 2 end process becomes more predictable. The goal of the method is to give feedback in response to an action. It helps to identify and resolve potential bottlenecks in the process, so that the work can be done right the first time (first-time-right) with optimal speed or throughput (just-in-time).

How does it work?
Kanban (from the Japanese ‘kan’, meaning ‘visual’, and ‘ban’, meaning ‘card or board’) signals when something needs to be done.

Two Bin Kanban
Taiichi Ohno, 1960 The first Kanban system was developed by #Taiichi Ohno (industrial engineer and businessman) for Toyota in Japan.

Digital System Kanban
Satoshi Nakamoto, 2009 On January 9, 2009, Nakamoto released open source software that allows you to share status updates with pseudonymous actors that you don’t have to rely on.

Kanban Innovation
The technology behind this new invention, better known as Blockchain, lends itself well as a collaboration technology to make processes more efficient and effective.

Roles, Resources, Rules, Relationships and Results

Unique identifiers for people (SSI), companies (wallets), for content (CID) and products (DID’s). DID’s rely on cryptography to prove that you are in control of a given identity.

Digital data carriers on physical products (like a QR code, RFC) with look-up mechanism. Legal identity identifier (LEI).

Data processing, data exchange, storage, authentification, integrity, security and privacy protocols

Intellectual property, verifiable credentials,  linked Data links information to a precise uniform Resource identifier (URI). Similar as URL points to a specific website, a computer can automatically understand the information received from a URI.

Digital identities, verifiable Credentials and Linked data are powerful examples of standardization. It makes it easier to analyse and improve the whole. For example: ecodesign for Sustainable Products Regulation, GHG emissions reporting.

Value stream mapping – reinventing value flows

Value stream mapping
Provides a visual representation of the value and non value adding activities. It is used to optimise and understand a process.

  1. Value adding (VA)
    Activities the customer is willing to pay for.
  2. Non value added (NVA-W), waste
    Peer-to-peer transactions eliminate numerous constraints in the flow of value, such as waiting times, overproduction, overprocessing, defects, and the need for intermediaries. By removing these non-value adding activities, blockchain streamlines the value exchange process, making it more efficient and seamless.
  3. Non value added (NVA-R), requirements.
    Smart contracts revolutionize collaborations by enhancing their efficiency, effectiveness, and predictability. These intelligent contracts establish the new rules of the game, providing a reliable and automated framework for conducting business transactions. With smart contracts, parties involved in a transaction can trust that the agreed-upon terms will be executed accurately and without the need for intermediaries.

Quality management

What’s in it for me?

What is a NF Tree?

Lean thinking – Lean system thinking

Lean Blockchain principles

Business process innovation

Procedures (SOP) automated

Start with why?

House of Value

Evolution of accounting

Failure Mode Effect Analysis

Do need a Blockchain?

lean house

What are the 5 key elements that blockchain adds to the lean house?

1. Alignment of Purpose
Processes are a derivative of an organizational strategy and determine the common goals and shared values. It gives “purpose” to the organization and enables alignment with people and processes. BC enables this for business collaborations.

2. Build in trust
BC has solved the double spending problem on the internet. Processes can be redesigned without the need of a (non value adding) trusted third party in the middle.

3. Value Stream
How do you get flow in processes if the value flow is continuously interrupted by an intermediary? BC allows value to pass from hand to hand. Transparency and visual management provides insight and control by design for all participants.

4. Quality and time
Blockchain shares information from the source/expert/oracle. This method not only saves a lot of time (just-in-time) and costs (first-time-right), but also ensures that the input quality comes from the expert.

5. Culture
What if we could design an infrastructure that contributes to the 17 Sustainable Development Goals? We now have the tools (BC, IoT, AI) and knowledge (lean thinking).

Lean system thinking

Lean Blockchain principles digitized

Blockchain goes beyond the elimination of waste. Let’s talk about the lean principles from a Blockchain approach.

  1. Define network value

In traditional supply chains companies pursue their own values ​​and goals. Blockchain is a coordination, cooperation and communication toolkit that aligns value created by the network. It brings clarity to the purpose of the whole chain and brings standardization of value adding activities of the end-to-end processes.

  1. Value stream and flow

Oracles or digital twins are used to determine the input data quality. They play the most important role, because if you can’t trust the input quality, the whole setup is worthless.

The value becomes digitized (digital twin) and stored in a immutable token. Thereby a token is a representation of network value.

  1. Pull system

The token can be transferred peer-to-peer (from wallet to wallet). There is no need for a third party as everyone has access to a copy of the current status.

  1. Perfection

Lean stands for understanding what is important to the customer. With Blockchain there is no one customer. Every stakeholder benefits from bringing improvements to the input quality, the throughput and the end result. It’s a system of lean collaboration with shared interest and goals.

Ishikawa – a lean conversation starter

Lean innovation – Digitize value flows

Medium of exchange

Blockchain: lean principles and tools

Lean Kaizen, Kaikaku en Kakushin


Theory of constraints

Theory of constraints

Hoshin Kanri – Shared mission and Vision

Built in quality

Built in quality is more often part of a product, process and system design.

Product design
An example of a product design is your phones’ SIM card. By cutting a corner of the card it becomes clear how to plug in the card in the mobile phone.

Process design
The google search function is a form of error prevented process design. Based on smart data analysis applications, Google knows what you will be looking for.

System design
Blockchain processes are designed as a single source of truth. There is consensus, alignment and incentives for all stakeholders in the network. With smart contracts and the use of real-time information it is possible to automatically control and improve a desired result. In traditional processes verification and control takes place afterwards, as part of the settlement.

Founders of value flow

Taiichi Ohno lived in the industrial era and is considered to be the founder of the Toyota Production System. He devised the seven wastes (muda) as part of his system thinking. These wastes are:

  1. Delay, waiting
  2. Over production
  3. Over processing
  4. Unnecessary transport (of goods, products)
  5. Unnecessary motion (employees)
  6. Inventory
  7. Defects

Satoshi Nakamoto is the pseudonym of an unknown person or group who designed the cryptocurrency bitcoin and founded the first blockchain database. With this invention Nakamoto was the first to solve the double-spending problem on the internet.

Now, anything of value can be digitized and exchanged on the internet without the need for a trusted third party. Peer-to-peer transactions make processes not only leaner (disintermediair), but also let us rethink what constitutes value for people and planet. The CEO of IBM expressed the possibilities of blockchain as follows: “what the internet did for information will enable blockchain for value streams”.

Lean is a management philosophy aimed at structuring the organization and processes in such a way that optimal value is created for the customer. Thanks to Taiichi, we have learned a method for extracting waste from processes. Satoshi gave us a powerful toolbox for a digital age.

5 Times Why? The lean consultant

Blockchain success factors

With process optimization the focus has mainly been on lower costs, better quality, reliability, lead time and flexibility. In addition to those process optimization, we increasingly notice that other values ​​are also become more and more important from a process optimization point of view. The dictionary of “enhancements” or “values” is slowly expanding. New “success factor metrics” includes: the reliability of the organization, the authenticity of products, origin, circularity, fair share, sustainability, etc.

Pull system

What is a Pull system?
A pull system is a collaborative system in which production is driven by actual demand, based on shared purpose. The product or service is not ‘pushed’ through the ‘chain’, but determined on the actual demand and the need for a product. The product or service is then ‘pulled’ through the process.

What is the problem?
We face global coordination and cooperation failures. Major bottlenecks for a fruitful collaboration are often caused by the revenue models, politics, security, fragmented systems, the incentives, remuneration, power, autonomy and also ignorance.

Lean tools integated
Look at the picture below and see all the lean elements which are integrated in a Blockchain concept. Blockchain will bring new ways of governance that allow people and businesses to connect and protect their common interest. It’s a Lean system with consensus on the strategy and execution.

Lean value flow

Reduce the Bullwhip Effect – Kanban