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Kanban – How we radically improved our Inventory System

Written by Rebecca McComas, DVM - Owner

Before Kanban

In our home euthanasia practice, MN Pets, I struggled to manage inventory in the way I thought it should be done.  In truth, I enjoy inventory management!  It appeals to that same part of me that stocks my home pantry with everything I need to whip up a tasty weeknight dinner at a moment’s notice without a trip to the grocery store.  In short, I didn’t mind working to improve it, I just didn’t know how.

Here’s what I wanted from our system:

  • Efficient – not take too much of my time or any employees’ time
  • Organized – items can be easily found when you need something
  • Avoid expired items – be sure we didn’t let items sit around long enough to expire
  • Avoid overstock – we have never had enough office space to allow storage of overstock

I had been tweaking our current system (if you could call it that) for years.  I had delegated small parts of it to various employees and often remained frustrated when they didn’t achieve all my inventory goals. 

The catalyst for change was that our employee responsible for most of our inventory management was moving out of town and I would need to train someone new on this important task.  It seemed daunting and I happened to mention it to some business colleagues.  One of them, whose business involves manufacturing, mentioned something called Kanban.  I had never heard of it… I had to ask him to spell it for me!  He told me a bit about how Kanban works, and though the system was designed for manufacturing, I was immediately intrigued.

After brief research, I knew this was the system for us.  Kanban was simple to understand, easy to maintain after set-up, and achieved all the goals I had for inventory.  I did a brief training with our inventory manager and set her on the road to Kanban-ing our entire office.

We learned that Kanban is a Japanese system of inventory management which relies on visual cues to determine when items are running low.  ‘Kan’ refers to ‘card’, and ‘Ban” refers to ‘signal’.

Here’s how Kanban works:

  • The system is based on the use of bins for each inventory item and rotating between a “working” and “reserve” stock of each item.
  • We created a small laminated card for every item in our inventory (approximately 180 items in our practice).
  • The practice uses items from the “working” stock as needed.
  • When the working bin is empty, the Kanban card is removed from the bin and placed in a specially designated area of our supply room to alert the inventory manager that it needs to be reordered.
  • The bin of “reserve” stock is moved forward and promoted to “working” stock.
  • When replacement items arrive, they are put in the appropriate bin, labelled “reserve”, and placed behind the “working” stock of the same item.
  • The quantity of items in each bin is sufficient that the “reserve” stock doesn’t run out before replacement items arrive.

We’ve been using the Kanban system for several months and have converted >90% of our inventory items to this system.  Our successes are that we haven’t run out of anything and we have pared down our excess inventory.  We have a much more organized space to store items in our office.  Our employee moved and we have retrained a new inventory manager in a much shorter time than before with fewer mistakes. 

Overall, Kanban has been a great success!  I’d recommend the use of Kanban for any veterinary practice.  If you are interested in learning more, here are some web resources:

Rebecca has learned a lot from other mobile end-of-life providers through her involvement with IAAHPC Business Circles and helping DVMcenter member practices go through growing pains.  It’s her greatest joy to hear from a member that DVMcenter has helped them reach that next stage of business growth successfully.