Originally published in 2024. This article on Kanban has been completely rewritten to reflect the operational challenges, technologies and business practices shaping SMEs today.

Efficiency Is No Longer Enough

For many years, Kanban has been promoted as one of the simplest and most effective methods for improving operational efficiency. Originally developed within Toyota’s production system, its visual approach to workflow management transformed manufacturing before finding applications across software development, marketing, logistics and professional services.

Its popularity is understandable. Kanban is intuitive, inexpensive to implement and capable of delivering immediate operational improvements. However, today’s business environment is considerably more complex than the one in which Kanban was developed.

Supply chains are increasingly volatile. Consumer behaviour changes rapidly. Labour shortages, inflation, geopolitical uncertainty and evolving customer expectations mean that businesses can no longer rely solely on visual workflow management or historical demand patterns.

For SMEs in particular, operational efficiency is increasingly the ability to build an organisation capable of anticipating change before competitors do.

Kanban remains an excellent operational tool—but only when it forms part of a broader decision-making framework.

What Kanban Actually Does

At its core, Kanban is a workflow management methodology. Rather than focusing on schedules or rigid production plans, Kanban visualises work as it moves through different stages of completion.

Whether managing inventory, customer projects or marketing campaigns, the objective is always the same:

• reduce bottlenecks;
• limit unnecessary work in progress;
• improve flow;
• deliver value consistently.

Originally, this was achieved using physical cards that moved between departments. Today, most organisations rely on digital platforms integrated with inventory systems, CRMs, ERPs and project management software.

The principles remain unchanged: visibility leads to better operational decisions.

Where Traditional Kanban Falls Short

Many organisations assume that implementing Kanban automatically creates an efficient business, and this is not always true.

Kanban tells you what is happening now, but it rarely explains why it is happening, what is likely to happen next, or how external events may affect future operations.

This distinction has become increasingly important over recent years.

The disruption experienced during the COVID-19 pandemic exposed a weakness shared by many inventory systems. Businesses relying exclusively on previous sales data found themselves simultaneously overstocking some products while being unable to source others. This assumption creates costs.

The issue was not Kanban itself. Rather, the problem was that operational decisions were based almost entirely on historical information while ignoring changing market conditions.

Modern SMEs cannot afford to separate operational management from strategic intelligence.

From Workflow Management to Operational Intelligence

Rather than simply displaying stock levels or outstanding tasks, businesses should connect operational information with insights generated across the organisation. This may include data relating to:

• sales performance;
• customer enquiries;
• website traffic;
• digital marketing activity;
• supplier performance;
• purchasing trends;
• public market indicators;
• seasonal demand;
• wider economic conditions.

For most SMEs, achieving this level of integration does not necessarily require significant investment in new technology. More often, it requires departments to communicate effectively, share information and develop a common understanding of business objectives.

Innovation is as much about collaboration as it is about technology. A marketing team may identify changing customer behaviour before it becomes visible in sales figures, while procurement may detect supply issues that could influence future pricing or promotional activity. Bringing these perspectives together allows businesses to identify opportunities and risks earlier, creating faster and more informed decision-making.

The objective is therefore no longer simply to manage workflow or ensure that tasks move efficiently from one stage to the next. It is to understand how operational, commercial and strategic factors interact, allowing the business to anticipate change, respond proactively and create sustainable growth.

Forecasting Should Drive Operations

One of the most common weaknesses we observe in SMEs is that forecasting is treated as a finance exercise rather than an operational one. Inventory decisions are often based on last month’s sales, or the same time the previous two or three years. No exceptions, no variations included. Yet. We know that things change. Marketing campaigns are scheduled to respond to commercial needs even though the budget is ever-decreasing, ad costs are increasing, and people are changing how they use advertising. Or, if marketing functions perfectly, we may incur in purchasing teams negotiating with suppliers without considering demand forecasts generated elsewhere in the business.

All these scenarios are possible; all these scenarios exemplify disconnected decisions that create unnecessary costs.

Forecasting should instead become a continuous process that combines operational, commercial and external information.

Modern forecasting can incorporate:

• historical business performance;
• seasonal demand;
• inventory costs;
• customer behaviour;
• economic indicators;
• industry trends;
• marketing activity;
• supplier lead times;
• emerging risks.

This creates significantly greater resilience than relying on historical sales alone.

Connecting Marketing and Operations

One of the largest missed opportunities within SMEs is the separation between marketing and operational management. In our experience, marketing teams frequently work towards campaign objectives without visibility of operational constraints.

Operations teams, meanwhile, often hold valuable information that never reaches marketing. If it does, it is in the form of a report from which the marketing team is expected to work some magic.

An integrated approach creates benefits across the organisation. If stock begins accumulating unexpectedly, marketing can launch targeted campaigns before products become obsolete. As we have mentioned multiple times, this can be integrated and automated without much manual labour.

If demand accelerates beyond forecasts, promotional activity can be adjusted before inventory shortages damage customer satisfaction. Similarly, campaign planning becomes more effective when marketing understands production capacity, delivery schedules and supplier reliability. Instead of operating as separate departments, marketing and operations become part of the same decision-making system.

AI Is Changing Operational Management

Artificial intelligence or AI is often presented as a replacement for existing management systems.

In practice, its greatest value lies in enhancing them. AI can analyse thousands of operational variables simultaneously, identifying relationships that would otherwise remain hidden.

This creates opportunities to identify unusual demand patterns or forecast inventory. AI can also be used to optimise purchasing decisions, supporting -while also being supported by- the experience of professional figures within the company.

Building Resilience Rather Than Efficiency

Lean methodologies traditionally focus on eliminating waste. While this remains important, resilience has become equally valuable.

Businesses now require systems capable of adapting quickly to unexpected events. This means continually assessing issues such as:

• What happens if a supplier suddenly becomes unavailable or significantly increases prices?
• How quickly can production or service delivery be adjusted?
• Which customers generate the highest operational pressure?
• Which products or services consume disproportionate resources?
• How would a change in demand affect cash flow?

Addressing these challenges requires far more than a Kanban board. It requires operational intelligence: the ability to combine internal information with external signals to support better decision-making.

Importantly, these are no longer questions confined to manufacturing or logistics. Whether operating in a B2B or B2C environment, any organisation that depends on customers, suppliers, partners or external stakeholders must continually evaluate these risks. The objective is not simply to react when disruption occurs, but to anticipate it, understand its potential impact and respond before it becomes a critical issue.

Kanban as Part of a Wider Business Strategy

Kanban remains one of the most effective methods for improving operational visibility. However, visibility alone is no longer sufficient.

The organisations most likely to succeed over the coming years will not necessarily be those with the fastest workflows, but those capable of combining operational data, market intelligence, forecasting and strategic planning into a coherent decision-making framework. This combination can help minimise the hidden costs of growth, operations and internationalisation of a company.

For SMEs, this represents a significant opportunity. Sophisticated operational management is no longer reserved for large enterprises. Modern digital tools, cloud platforms and AI-driven analytics have made advanced operational intelligence increasingly accessible to businesses of every size.

Kanban should therefore be viewed not as the destination, but as the foundation upon which a more intelligent, resilient and strategically aligned organisation can be built.

Final Thoughts

Operational excellence comes from understanding how every part of the business interacts—from inventory and procurement to marketing, customer demand and external market conditions.

Kanban provides visibility.

Forecasting provides direction.

Business intelligence provides context.

Together, they enable SMEs to make faster, better-informed decisions while building the resilience needed to navigate an increasingly uncertain commercial environment.

Kanban is only one of many methodologies that organisations can use to improve performance. The real challenge lies in understanding when, why and how to apply the appropriate framework within a wider business strategy.

These topics will be explored in depth in NorthStar Consulting’s forthcoming Innovation + Strategy executive programme, designed specifically for SME owners, managers and decision-makers seeking practical approaches to sustainable growth