Kanban process

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Kanban process

The KANBAN method for controlling production and material flow is based on the actual stock
quantity in production. Material that is required on a regular basis is continually provided in small
quantities in production. Replenishment or the production of a material is only triggered when a
higher production level actually requires the material. This replenishment is triggered directly in
production using previously maintained master data.

Master data

1. Create production supply area using Tcode PK05

Enter the plant and continue

Select new entries, Enter plant, supply area, storage location and person responsible

Save the production supply area

2. Create finished product using Tcode MM01

Enter planning strategy as 10 (make to stock) and availability check as 02, save the material.
3. Create semi-finished material for which the Kanban process will be in-house, using Tcode
MM01

Enter storage location for EP (where the material will be stored after its procurement), Default
supply area

(From where the material will get utilized for production) and production storage location (Storage
location assigned to supply area) and save the material
4. Create semi-finished material for which the Kanban process will be in-house, using Tcode
MM01

Enter storage location for EP (where the material will be stored after its procurement), Default
supply area (From where the material will get utilized for production) and production storage
location (Storage location assigned to supply area) and save the material
5. Extend both the semi-finished materials for production storage location using Tcode MM01

Here enter the storage location as production storage location and enter, system will extend the
material for production storage location also, save both the materials
6. Create purchase info record for vendor material combination, for semi-finished material with
external procurement using Tcode ME11

Enter vendor, material, plant and purchasing organization.

Here in organization data tab, enter planed delivery time, purchasing group, standard quantity
and net price then save the record.
7. Create status sequence for Kanban

Here select ‘New entries’ tab

Enter the required indicator which specifies the following for the status (e.g. EMPTY) in the
corresponding status sequence:

 whether it is mandatory +
 whether it is recommended *
 Whether it is optional .
 whether it is prohibited –

Save the status sequence.

8. Create replenishment strategy

a. Create in house replenishment strategy

Here enter plant and replenishment strategy.

Select the control type as ‘working with production orders’

Select required order type, in this case PP05

Enter require goods movement for goods receipt, in this case 101

And planed orders as ‘No planed orders’ and save the strategy

b. Create in external procurement replenishment strategy

Enter plant and strategy

Enter control type as ‘working with purchase orders’ and order type as ‘NB’

Enter goods movement for goods receipt as 101 and save the replenishment strategy

9. Create control cycle using Tcode PK01

a. Create control cycle for in- house Kanban process

Enter material plant and supply area and select ‘classic Kanban’
Enter number of Kanban (containers), maximum empty and Kanban quantity.

Enter in-house production replenishment strategy and person responsible

On flow control tab, enter the status sequence and save the control cycle
b. Create control cycle for external procurement Kanban process

Enter number of Kanban (containers), maximum empty and Kanban quantity.

Enter external procurement replenishment strategy, Purchasing org and vendor for external
procurement On
Process steps for Kanban process

1. Set the Kanban to EMPTY and FULL by using Tcode PK13N (Demand source overview) and
PK12N (Supply source overview)
Enter plant, production supply area, person responsible and production storage location and
enter

a. Kanban for In- house production

Select first cycle and the Kanban container, select ‘To EMPTY’ tab

System will change the status of Kanban container from full to empty (color will change from
green to red)
Now double click on the Kanban container, here the system will show the production order that
got generated for in-house production of material

Now go to production order change using Tcode Co02 and release the order.
Now do the goods issue for production order from the issue storage location using Tcode MB1A

Do the confirmations of operation for production order using Tcode CO11N

After saving the confirmation, system will automatically post the goods issue in production
storage location.

Now go to Tcode PK13N n system will automatically change the status of container as FULL

b. Kanban for external procurement

Select the Kanban cycle and container and set status as empty by selecting ‘To Empty’ tab

Once the status is changed to empty (Red color), system will generate the purchase order for
procurement from vendor.
Now go to ‘supply source overview’ using Tcode PK12N, Enter person responsible, plant and
vendor and enter

Select the Kanban cycle and container and select ‘status in transit’ tab.

The status will get changed from ‘EMPTY’ to ‘IN TRANSIT’ (from red color to yellow)

Now again go to demand supply overview using Tcode PK13N

Select the cycle and container and change the status to ‘FULL’ by selecting ‘To full’ tab, this will
trigger the goods receipt of material from vendor (yellow color to green)
By double clicking on Kanban container the material and accounting documents can be checked
if necessary

2. Create PIR of finished product using Tcode MD61

Enter the required quantity on desired date and save the PIR

3. Material requirement planning of finished product using Tcode MD02

Enter material and plant,

Go to stock/requirement list using Tcode MD04 and check the order report.

4. Conversion of planed order to production order (co02) and order confirmation (CO11N) for
finished product

Convert the planed order to production order, release the order and save
Now confirm the order operations using Tcode CO11N
Save the confirmation, system will back flush the components and goods receipt of finished
product will get posted automatically as mentioned in control key.

5. Check the stock overview using Tcode MMBE

Finished material stock will get updated in unrestricted use stock at the given storage location

Second
KANBAN Execution- Step by Step
Approach
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KANBAN is a process by which material can be replenished as per the requirement. KANBAN is
a Japanese technology for material replenishment. KAN- means card and BAN means signal.
Hence understanding is card which will give the signal for replenishment stock.

KANBAN will have plastic bins and cards. The card will hold the material no, storage location,
Bar code, material qty etc and will be kept on the bin once the bin is full. Once the bin is empty,
then the card will be on the board. Like that multiple card will be there for a single material with
proper serial no.

KANBAN is having two master data.

1. Control cycle

2. Supply area

First of all supply area will be created with storage location and responsible person.

T code PK05. Put the plant and create new entry.

Put storage location and responsible person and save the data.
Go to MMSC

Exclude the storage location from planning(as this is not required to plan through MRP). We can
exclude the storage location from customizing also. In this case all the material in the storage
location will be excluded for planning.

Now the control cycle has to be created.

T code PK01
Put material, plant, supply area and select classic KANBAN.

Put no of KANBAN (means no of bins), No of KANBAN quantity and maximum empty allowed.

Select production type also (inhouse/external).

This can be done through control cycle maintenance also. T code PKMC. To create new click
on
Now check MD04 screen

Total stock is 63 and is excluded from MRP. This stock will be consumed in subsequent stage(in
next stage)

Now check the status of the KANBAN bin. T code PK13N

Here three bins are full and two bins are in Wait status. Click to see the legends.

Two important status of KANBAN is.

If Bins are made full- GR will be done

If Bins are made empty-Procurement proposal will be created (NOT GI WILL BE DONE)

GI is being done through backflush.

In actual situation bins are being scanned through RF device and scanning is being done one the
Bins are empty or Full.

But here we will do through this tab.

Let’s select one bin and make it empty by

One KANBAN processed and Bin became RED. This means Bin is empty.

Now check MD04. One Production order created (as empty means one proposal will be created).

Make another Bin empty is same process and see MD04 screen.
Release both the order. The order type of KANBAN is PP05.
Double click on the Bin and you can see the details with order created.

Check the stock in MMBE

Stock is 63. Now select one empty Bin in make it Full

The Bin became green.

Check the stock

Its become 70 unrestricted. Hence 7 nos GR is happened.

Repeat the process and check the qty .More 7 no GR happened

Check MD04. No proposal exist (for all orders GR happened).

Few more useful T codes

PK11: Plant overview.

 PK18: For each material production order, DOC no on which the production order got posted can
be seen. Status of KANBAN container will be displays also.

PK31: Error in KANBAN can be checked. Select any error line and click on Bell. You can change
the error status.

PK09: KANBAN can be locked (when the KANBAN is not is used/Bin is damaged).

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37 Comments

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Aditya S

January 6, 2014 at 11:42 am

Hello Krishnendu,

Thanks for the document and i had given reward points for the same.

1)Can you please confirm do we need to make any configuration settings for the automatic
creation of Production Order(Procurement Proposal) when the bin is empty.

2) Can we use KANBAN instead of MRP. Is KANBAN an alternative to MRP. Please clarify. If no,
in which instances we use KANBAN instead of MRP. thanks.

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Krishnendu Das Post author

January 6, 2014 at 11:56 am

Hi Aditya,

Thanks .

1. Not required. I have not created. though I will check again.

 2. For KANBAN material, MRP is not required. But there is a definition of KANBAN
material. KANBAN material will be handled through BINS. Hence one big finished
product can’t be handled through KANBAN.

Success.

Regards,

Krishnendu

 Like(0)

Aditya S

January 6, 2014 at 1:26 pm

Hi Krishnendu, Thanks for clarifications.

 Like(0)

Former Member

January 6, 2014 at 12:35 pm

Hi Aditya

To my knowledge, Kanban or MRP is your decision of planning strategy. For a product or

a component which is constantly required or consumed with a very stable demand, a
planner doesn’t want to spend more energy on it. So a Kanban control cycle can save a
lot of time for the planner because the shopfloor guys will control the supply. In some
case, if a material has a low value but meanwhile it’s continuously required, the MRP
controller maybe want to use Kanban also.

milk

 Like(0)

Aditya S
 January 6, 2014 at 1:26 pm

Hi Milk,

Thanks a lot for your inputs on KANBAN usage.

 Like(0)

Tin Dinh Trung

January 7, 2014 at 3:21 am

Thanks for your sharing

Regards

Dinh Trung Tin

o Like(0)

Former Member

January 7, 2014 at 5:02 am

Hi Krishnendu,

Thanks a lot for your inputs on KANBAN. Can you please publish any document on kanban using

MRP.

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Krishnendu Das Post author

January 7, 2014 at 6:06 am

Hi Raj,
If KANBAN is there, MRP is not required. Do you have any such scenario where you
have to do both.

Let me know. Then I can have a re look.

Thanks .

Regards,

Krishnendu.

 Like(0)

Former Member

January 8, 2014 at 5:37 am

Thanks Krishnendu for your reply,

I think some where in SCM 350 (KANBAN) book, I have read the Kanban
process using MRP,

Can you please have a look and let us make aware by preparing the business
cycle as you produced right now.

Thanks a lot.

Best regards

 Like(0)

Krishnendu Das Post author

 January 8, 2014 at 5:44 am

Sure Raj,

Will come back to you.

Regards,

Krishnendu.

 Like(0)

Srini Ravindra Kumar

January 30, 2014 at 10:28 am

Raj, The MRP4 view setting on MRP exclusion/inclusion indicator decides

what strategy is actually proposed in the control cycle. In this demo you
can see that the material is excluded and hence it has proposed non-
MRP strategy 0003 (others are 0001/0002). If the MRP4 setting for this
material is changed to be included for MRP, the control cycle for same
material will propose the I/H strategy as 0004/0005/0006 which are ones
to work with MRP. Hope it clarifies your doubt.

Cheers!!!

 Like(0)

Former Member

January 8, 2014 at 4:56 am

Hi,

Very useful document. Full KANBAN cycle has been discussed. Keep posting like this.

Sidhartha.

o Like(0)
 o

Krishnendu Das Post author

January 8, 2014 at 5:01 am

Thanks Sidhartha.

Regards,

Krishnendu.

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Former Member

January 20, 2014 at 11:59 am

Thanks lot

Regards,

sabhapathy R

o Like(0)

Tejas Kantilal Pujara

January 24, 2014 at 7:39 am

Good document for beginners to understand KANBAN!!!!!!!!

o Like(0)

Krishnendu Das Post author

January 24, 2014 at 7:57 am

Thanks Tejas .
 Regards,

Krishnendu.

 Like(0)

Srini Ravindra Kumar

January 30, 2014 at 10:22 am

Good document Krishnendu.

o Like(0)

Dhaval Choksi

February 7, 2014 at 9:24 am

Thanks for sharing.

o Like(0)

Former Member

February 7, 2014 at 10:31 am

Thanks for Sharing .

 Like(0)

Former Member

February 12, 2014 at 9:03 am

Nice Document…Now i get idea of KANBAN… Thanks for sharing it

o Like(0)


 Krishnendu Das Post author

February 13, 2014 at 6:01 am

Thanks Manish.

Krishnendu.

o Like(0)

anurudh rathore

February 13, 2014 at 12:03 pm

hi krishnendu,

Nice document.

plz share SOP document also

o Like(0)

Krishnendu Das Post author

February 14, 2014 at 4:59 am

Thanks Anurudh. Please refer the link.Already created by Kumar.

Standard SOP Process flow…

Flexible Planning in SOP process flow…

Regards,

Krishnendu.

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Former Member

February 23, 2014 at 3:02 pm

 Hi, Krish,

Could you pls share your SOP docs…

when i check XML file is not showing screen shots.

pls send me my mail id – sakthivelhp@gmail.com

Thanks…

Sakthivel

 Like(0)

Former Member

February 13, 2014 at 6:02 pm

Good Document and easy to understand

o Like(0)

Krishnendu Das Post author

February 14, 2014 at 4:56 am

Thanks Kamal.

 Like(0)

Julio Cesar villegas

February 20, 2014 at 4:49 pm

Hi Krishnendu.,
 Very interesting doc… and the applied is clear.

thanks.,

Julio César Villegas

o Like(0)

Former Member

February 1, 2015 at 4:52 am

nice one

o Like(0)

Eric Chen

May 11, 2015 at 4:23 pm

Nice documentation for me to learn KANBAN, very useful.

Many thanks!!

o Like(0)

Former Member

September 10, 2015 at 2:26 pm

VERY NICE

o Like(0)

Former Member

September 13, 2015 at 5:56 pm

 Hello Krishnendu Das

Good Explanation , I have One question in Kanban scheduling agreement control cycle,

When the kanban scheduling agreement validity expired and target quantity are met , system
allowed to add new schedule lines in agreement without any warning and error ,when kanban is
processed ” to empty” and Post GR when processed “To FULL” however In kanban contract
agreement It gives error while validity is expired, Please suggest .

o Like(0)

Former Member

November 20, 2015 at 6:12 am

Hi Krishnendu,

Really nice document.

Helped a lot in understanding kanban

Regards,

Sagar

o Like(0)

MAHENDRAN PARAMASIVAN

December 29, 2015 at 7:22 am

GOOD EXPLANATION BUT IS THERE ANY ADVNCED LEVEL KANBAN. WE ARE IN TO THE
AUTOMOBILE WE ARE YET TO IMPLEMENT THE KANBAN. HERE THE STEPS ARE BASIC
LEVEL

o Like(0)

Former Member

February 26, 2016 at 8:43 am

Dear Experts,
 can we do this PKMC to multiple items same time, like we do the mass changing for materials.

o Like(0)

Former Member

May 4, 2016 at 9:58 am

Nice document..,

can any one share the configuration document of Kan ban process?

o Like(0)

Arpit Kumar Patnaik

June 27, 2017 at 12:14 pm

Excellent Document.

Very Helpful

o Like(0)

Former Member

December 13, 2017 at 8:19 am

Hi Krishnendu,

Hope your are doing well

I need your support that Kanban SAP implementation possibility for below ,

1.we have agreement with the supplier to keep stock on his site based on min/max on his warehouse

2.we have 3 sites in different countries and we are keeping aggregating stock at supplier site

3. once the supplier load any partially Qty we should start production to fill his stock with max

we are using SAP so if Kanban SAP process can cover above point or there is other process on SAP