Using Kanban as Production Process

In Kanban, material flow is organized using containers that are kept directly at the appropriate work centers in production. Each container contains the quantity of material required by the personnel at that work center for a certain period of time.

As soon as a container is emptied at the demand source, replenishment is initiated. The supply source for the required material can be another place in production, an external supplier, or a warehouse. The demand source can use material from other containers until the filled container returns.

The aim is that the replenishment process is controlled by production itself, and that the employee has to perform fewer manual postings. This self-management process and the fact that replenishment elements are created close to the time they are actually consumed means that stocks are reduced and lead times are shortened. (Replenishment is only triggered when a material is actually required, and not before.)

In general, the master data for Kanban is the same as with any other delivery-based production integration scenario.

• Storage location

  You can use a separate storage location within the supplying warehouse, a storage location that is MM-IM managed or has its own EWM warehouse, or not use a separate storage location at all.

• Production Supply Area

  The PSA is defined in SAP ERP and must be known in SAP EWM as well.

• Control Cycle

  The Kanban control cycle looks different in SAP ERP than the control cycles for production orders, as in Kanban the source can also be an external vendor or internal production. The control cycle in SAP EWM is similar to the ones for pick parts or release order parts.

For the plant, a replenishment strategy for stock transfer must be defined. SAP supplies a Control Type: 7 Delivery from an EWM-Controlled Storage Location for this purpose.

The progress of production in Kanban is controlled by setting the Kanban to the appropriate status. Usually, only the Empty and Full statuses are used.

When the demand source sets the status to Empty, the system creates a replenishment element, instructing the material supply source to delivery. When the supply source is an EWM-managed storage location, the ERP system creates an outbound delivery. The resulting warehouse request in the EWM system (posting change or outbound delivery) depends on the relationship of the supplying and receiving storage locations. For the warehouse request the warehouse tasks are created and processed. The preceding figure shows the scenario when the receiving storage location is MM-IM managed and a one-step stock transfer is used (the goods issue from EWM triggers automatically the goods receipt in the receiving storage location).

Since the SAP S/4HANA 1909 release, a new replenishment strategy ("8 - Stock Transfer with Warehouse Tasks") is available in SAP S/4HANA embedded EWM. With this replenishment strategy, the warehouse tasks to replenish a kanban container are automatically created when the Kanban is set to empty, without the need for a delivery.

Since the SAP S/4HANA 2023 release another new replenishment strategy ("9 - Stock Transfer with Warehouse Tasks (decentral EWM)") is available for a decentral deployment. This requires that the Kanban control cycle is set up on the decentral EWM system and that also the complete Kanban process is running in this system.

Setting the status of a Kanban to empty, is not the same as a goods issue posting. In Kanban, goods issues are typically backflushed during the confirmation of the production order or the manual goods issue posting for the production order.