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KANBAN – Introduction
• With KANBAN, the production process controls itself and manual posting
is reduced as far as possible
•The entries you have to make in the system have been reduced to a
minimum, for example, the scanning of a bar code.
• The effect of this is a reduction in overall process lead time and better
control of inventory
KANBAN process flow
Replenishment
card
Kanban Terminologies
• Supply Area
• Control Cycle
• Kanbans / Containers
• Replenishment Strategy
• Demand Source
• Supply Source
• Kanban signal
• Kanban dashboard
Kanban Control Cycle
Kanban Control Cycle contd..
• Control Cycle:
• The relationship between the demand source and the supply source
is defined in the control cycle
• We can specify the number of kanbans and the quantity per kanban
manually
• A supply area is an interim storage location on the shop floor which is used
to provide material directly to the production line or the work center
• Goods movements are posted to the storage location assigned to the supply
area;
• One storage location can be assigned to several supply areas, however, one
supply area cannot be assigned to several storage locations
• The person responsible is the person who (as the demand source) monitors
the further processing of the materials and the stocks at the supply area.
Process Pre-requisites for KANBAN
implementation
1. Consumption of Kanban parts should be fairly constant over a
period of time
• Actual qty produced depends on the requirement qty as well as the lot
sizing procedure applicable for the material
• Since the materials are “pulled” from the preceding work-centre, Kanban is
said to work on the PULL principle
• For this purpose, a control cycle is created with a fixed number of kanbans
between the supply source and demand source; each kanban represents a
specific material and quantity and usually represents a container
• Production lot size depends on the kanban quantity and this quantity is
produced by supply source in one run; total production quantity depends on the
number of kanbans sent to the supply source during a given time
• Classic KANBAN
• One-Card KANBAN
• Event-driven KANBAN
Classic KANBAN
• Demand source
• Supply source
• Replenishment strategy
• Numbers of kanbans that need to circulate and
• Quantity per kanban
Event-Driven KANBAN
• Control cycle is still required to capture certain rules for Kanban qty
determination or Qty rounding off
• One or more Kanbans are created by the event; the kanban quantity
and the number of kanbans depends on the required quantity and the
specifications in the control cycle
KANBAN Procedures in SAP
One-Card KANBAN
• In this method, there are two KANBANs in the control cycle but there is
only one card ; this is an improvement over the Classic Kanban procedure and
aims to reduce the inventory level in the demand source further
• In this method, the employee in shop-floor does not wait till the kanban
becomes completely empty to flag the status of the container to EMPTY;
Instead, the employee enters the individual withdrawal quantities directly in
the system using an SAP transaction (PK22)
• System thus keeps track of the actual kanban qty and automatically sets
the status to EMPTY when the kanban qty becomes zero
• However, the trade-off is that user has to post multiple entries in system
to account for the material withdrawals from Kanban bin
KANBAN Replenishment: With or Without MRP
Both options are allowed in the Classic kanban and other kanban
procedures
Kanban Statuses
• Usually the two statuses “EMPTY” and “FULL” are sufficient to run a
kanban
• Such status changes are usually done using a barcode and barcode scanner
Kanban Statuses contd..
• WAIT
• Applicable for a newly created kanban OR
• Material is consumed but the replenishment is put on hold temporarily
• IN PROCESS
• Requested material is currently being produced by supply source
• IN TRANSIT
• Material is currently on its way to the demand source
• IN USE
• Demand source is currently withdrawing the material
• ERROR
• Set by system if error occurs during processing of kanban
Kanban Statuses contd..
Replenishment Strategies
Replenishment Strategy
• Controls how replenishment is to take place
• Determines which replenishment elements are created
• Is defined in the control cycle
• In-house production
• External procurement
• Stock Transfer
Replenishment Strategies for External Procurement
• The delivery of a summarized JIT call can be specified to the hour and
minute and can also take place several times a day
• The only difference is that the system reads the source list to determine
the source of supply.
• The source list entry for kanban scheduling agreement cannot be relevant
for MRP
Replenishment Strategies for Stock Transfer
• It is not required to exclude the material from MRP for the kanban
storage location unlike strategies for procurement or production
• You use this function if you want to transfer components without any
previous reservation.
• When the kanban is set to EMPTY, goods issue is posted directly at the
supplying location and goods receipt at the consuming location
Replenishment Strategies for Stock Transfer
• When the delivery has been done, the transfer order needs to be
confirmed through a barcode and this sets the status to FULL
Additional KANBAN functions
Master Data
1. Maintain the “Sloc MRP indicator” in the material master MRP4 view
KANBAN in SAP contd..
Pre-requisites:
2. If required, maintain a valid MRP type in material master MRP1 view;
• This is required for example if the material is replenished using kanban for
some storage locations and MRP for other storage locations of the same plant
KANBAN in SAP contd..
•The supply area is assigned the following objects: Plant, Storage location,
Person responsible
KANBAN in SAP contd.
Control Cycle:
2. When one of the kanbans has been completely consumed, select the Kanban
and click on “To Empty” button - this will change the status to Red (empty)
System will create a new schedule line for the kanban qty in the background
KANBAN in SAP contd..
• The outline agreement item assigned to the control cycle has to be of type
Kanban; For this, the kanban indicator has to be set to “X”
KANBAN Process Steps in SAP
•The process can be explained with the below example involving Plant to Plant
Stock transfer using Scheduling Agreement
Process Steps:
1. Using SAP tcode PK13N, open the demand source kanban board
KANBAN Process Steps in SAP contd..
•When both kanbans are full, you will see two containers in green colour
KANBAN Process Steps in SAP contd..
The same status is reflected in supply source kanban board (tcode PK12N)
KANBAN Process Steps in SAP contd..
3. Once material is available in Supply source, Post the stock removal from
supplying plant using tcode MB1B
• Client can use a custom tcode to process the same.
KANBAN Process Steps in SAP contd..
4. When material is received at the supply area, click on the option “To Full”
from the demand source kanban board - this will trigger goods receipt
using mov.type 101 and make the kanban Green once again